Canadian pension funds have boosted their foreign equity investments to 26% from 22% over the past five years, according to a recent Greenwich Associates study. Meanwhile, Canadian investments dropped to 61% from 68% during the same period. Investments in Canadian stocks dropped nearly C$17 billion (US$10.8 billion) in the last year, while U.S. equity investments slipped by just over C$1 billion. Holdings in stocks in major developed markets in Europe, Asia and the Far East rose by nearly C$2 billion, Greenwich found.
The increase in international stock investment is good news for foreign stock managers. Two-thirds of Canadian plans use a specialist for EAFE equities, 61% for U.S. equities, and 12% for emerging markets, Greenwich found. The average number of managers used is expected to rise to 6.3 from 5.9 during the next three years, John Webster, Greenwich consultant, said in a release.