that during the spring months of 2021 a record $57.2 billion was acquired by Canadian investors acquired in foreign securities, as people were confined to their homes amid the surge in infections. According to the agency, the funds originated not only from Canadian businesses and big institutional investors but also from individual retail investors either directly or through mutual funds, pensions and exchange-traded funds (ETFs).
Last year, a total of $91.3 billion was invested in US equities and therefore it comes as no surprise that of the $57.2 billion funds which flowed overseas, nearly $34 billion went to the same destination. According to experts, with the loonie near 80 cents to the US dollar, the relatively strong currency is strengthening the buying power of Canadian investors on international markets.
Usually, there are a few ways in which Canadian investors could directly access overseas markets, particularly through mutual fund providers which offer unhedged US dollar versions of foreign equity funds. They provide access to all countries, through a broad global fund, or all countries except Canada and the US, through an international fund, or funds which are limited to certain regions, countries or industries.
However, it can often be difficult and expensive for an average investor to directly invest in directly in markets outside of Canada and the US, especially when considering the massive fees that are involved in these transactions. This is why most investors use trading accounts which offer easy access to buying US-listed stocks directly. Since the US dollar is the global standard, these accounts can provide exposure to the rest of the world.
