Prime Minister Mark Carney staged a VIP investor gathering in Toronto last week that turned the Four Seasons into a rotating door of black SUVs with tinted windows and heavy security. Plenty of senior money managers did not make the invite list and instead filled overflow events around town, including the Milken Institute's first big Canadian forum. With the Toronto International Film Festival in full swing, hotel rooms and cocktails got painfully expensive. A gala at the Art Gallery of Ontario included a set by Quebec singer Charlotte Cardin.
"Prime Minister Carney said, 'high standards don't require slow decisions,' and that's really the mindset that he's in," said Mathieu Chabran, co-founder of Tikehau Capital SCA. He called the guest list "the Champions League" of global investing.
The pitch is landing because the math looks tempting. The S&P/TSX Composite is priced at under 16x projected earnings over the coming 12 months, compared with 17.4x in February and 19x for the S&P 500. Market breadth has narrowed too, with about 45% of TSX members above their 50 day moving average, down from roughly 85% at the start of the year.
Foreign investors have been sending capital to Canada this year, mostly into bonds. Equity buying is starting to follow, with net foreign purchases of Canadian stocks reaching C$7.2 billion (US$5.1 billion) in July, the fastest pace so far this year, according to data released Thursday. Across all asset classes, total inflows over the past 12 months were roughly C$211 billion, or 8.7% of Canada's GDP, Bank of Montreal economists estimate.
Demand for Canadian government bonds hit a half-year record of C$118.6 billion, the highest since 1988, based on cumulative six month periods. The largest ETF tracking Canadian stocks has also notched its longest inflow streak since 2018.
Carney is courting C$1 trillion (US$715 billion) of investment in the country, and an unexpectedly long catalog of 167 large industrial and infrastructure undertakings is offering investors fresh avenues to explore.
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Money managers say they are upping their Canada bets on the back of cheaper prices, an improving growth backdrop and Carney's push for tax cuts, fiscal-policy certainty and regulatory rollbacks. "Canada is an attractive market for investment," said Peter Stensgaard Mørch, CEO of PensionDanmark, which manages more than 412 billion Danish kroner (US$63 billion). The firm had C$1 billion invested in Canada before the event, and while most of its North American capital will still go to the US, Mørch said it may "very well be the case" that Canadian stock allocations rise.
Speaking at the summit, Blackstone Inc. President Jonathan Gray described Canada as "a sleeping giant, economically" and noted better than expected growth. At CIBC Capital Markets, Christopher Harvey, who leads equity and portfolio strategy, said, "It does appear to be a sea change."
"It's a wake up call for a lot of people to start doing their work and start paying attention to what is happening in Canada," said Irene Fernando, who co-leads North American equities at RBC Global Asset Management; the firm oversees C$834 billion. She is looking to raise Canada weights after Carney's tax breaks, streamlined rules and project list. Sadiq Adatia, CIO at BMO Global Asset Management, which runs C$296 billion, said spillover events were standing room only. After being underweight Canada earlier this month, he moved to neutral and is watching for chances to go overweight.
Some North America focused managers say they are taking profits in the US to buy Toronto. In July, Canadian investors unloaded over C$31 billion (US$22 billion) of US equities - a monthly record - after buying nearly C$78.1 billion (US$56 billion) during the first half of the year. Since 2017, Canada's market has been priced below the US, and the S&P/TSX topped out soon after Ottawa and Washington's trade talks collapsed in late August, which led to escalating tariffs.
Carney is leaning into that backdrop, pitching growth and diversification projects born out of trade tensions. "The tide is turning," said Greg Taylor, CIO at PenderFund Capital Management in Vancouver. "It could be that Trump has galvanized us, and Canada is going to put money to work."
If you are tracking where your dollars might stretch further, the setup is clear enough: bond yields pulled in global buyers this year, and now equities are getting a look. Watch whether more money rotates from US heavy portfolios toward Canada, because that is where the valuation gap and the policy push are right now.
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