Most of the decline came in corporate bond holdings, which dropped by $17.3 billion in the month. Investors also sold $7.1 billion worth of provincial government bonds and $2.5 billion in federal government bonds.
The decline in foreign holdings of Canadian bonds in April followed a first quarter that saw a $52.3-billion reduction in bond positions, also led by corporate bonds.
Some of the bond divestment was offset by offshore investors adding $11.6 billion worth of Canadian equities in April — partly reversing the $40.6-billion equity selloff seen in the first three months of the year.
“On a sector basis, acquisitions in April were widespread, led by shares from the energy and mining, credit intermediation and related activities as well as management of companies and enterprises industries,” Statistics Canada reported.
Foreign investors also added $4.1 billion worth of Canadian money market instruments in April, as acquisitions of federal government paper ($10.3 billion) offset a $5.3-billion decline in corporate paper holdings.
While foreign investors trimmed Canadian exposure, Canadian investors added $4.1 billion worth of foreign securities to their portfolios — a slowdown from March ($15.6 billion) and February ($23.9 billion).
“In April, investors targeted U.S. government instruments, while reducing their exposure to U.S. shares,” Statistics Canada said.
Specifically, Canadian investors bought $9.2 billion worth of U.S. government bonds and $1.1 billion in U.S. Treasury bills.
This activity was partly offset by reductions in holdings of U.S. corporate bonds, other non-U.S. foreign bonds, and $0.3 billion in U.S. equities.
“Global markets were very volatile in April in the context of rising tariff tensions,” Statistics Canada said — noting that both U.S. and Canadian equity prices declined in the month, while the Canadian dollar appreciated by 3.9% against the U.S. dollar.
The combination of foreign investor selling and modest domestic buying resulted in cross-border securities activity generating a net outflow of $13.5 billion from the Canadian economy in April.
“This marked the third consecutive month of net outflows, bringing the total to $67.6 billion,” Statistics Canada said.