Meanwhile, Canadian investors favoured foreign bonds in latest stats
Foreign investors put $26.7 billion into Canadian securities in July, the strongest inflow since September 2024, according to new data from Statistics Canada.
At the same time, Canadian investors purchased $17.4 billion in foreign securities, resulting in a net inflow of $9.3 billion into the Canadian market to provide the first positive monthly balance of international securities transactions so far in 2025, signalling a possible turnaround after a sluggish first half of the year.
By contrast, Canadian investors had acquired $9 billion in foreign securities in June while foreign investors were only cautiously investing in Canada with a net $709 million following divestments in earlier months of 2025.
Foreign demand for Canadian government debt was notable in July with non-residents snapping up significant amounts of federal and provincial bonds which continue to be viewed as safe and liquid investments. However, they reduced their holdings of private corporate paper, suggesting a cautious approach toward riskier debt instruments.
Equities also saw renewed interest with foreign investors purchasing $11.8 billion in Canadian shares in July, a reversal from earlier months when there had been heavy selling. The rebound was most pronounced in banking, energy and mining, and trade and transportation sectors, areas seen as central to Canada’s economic strength. The S&P/TSX Composite Index had gained 1.5% in July compared to the end of June.
Canadian investors continued to show a strong appetite for foreign securities, though their focus remained on bonds. A record $16.6 billion was invested in foreign debt, much of it in US government bonds, reflecting a shift in preference toward fixed-income products that offer stability in uncertain markets.
They reduced holdings of foreign equities with a net $987 million divestment (their first since January), with a significant pull-back from non-US shares (of $3.5 billion), partially offset by a strong preference for US shares with purchases of $2.5 billion. The S&P 500 had increased 2.2% month-over-month by the end of July.
The coming months will show whether this momentum can be sustained as interest rates, inflation, and global market volatility continue to shape investment decisions.
