Direct stock ownership continues to increase while the ownership in mutual funds has not returned to 2000 levels. In 2004, 57 percent of shareowners held stocks, an increase from 54 percent in 2002 and 51 percent in 2000. For mutual funds, the current number is 81 percent of total shareowners a drop from 87 percent in 2000.
Shareowners are also diversifying and trying new investment vehicles. According to the study, one in ten shareowners own derivatives and an almost similar number have invested in income trusts.
“We have a strong equity culture in Canada,” said Barbara Stymiest, CEO, TSX Group. “Canadians are informed investors who provide a strong base for our capital markets. Our exchanges aim to provide strong, fair and efficient marketplaces to fuel growth for Canadian issuers and provide the offerings for investors. The information in this study confirms that Canadian investors gravitate towards high return, low cost financial products."
“The recovery of share ownership in Canada is remarkable,” said Renee Colyer-Andres, Director of Research Services with TSX Group. “Investors have seen a gradual stock market recovery after one of the most dramatic downturns in history fuelled by 9/11 and the war in Iraq. These improvements have come despite a slow recovery in the high tech and telecom sectors and continued high profile scandals associated with accounting practices, insider trading and corporate governance.” Ms. Colyer-Andres added, “it is interesting that while shareholder levels have increased, investors do remain sceptical over the quality of corporate disclosure.” The study also found there was a shift in the type of investment vehicles used by Canadian investors. According to Ms. Colyer-Andres, “We measured Exchange Traded Funds and, for the first time ever, Income Trusts and Derivatives. Surprisingly, we found ETFs had 7 percent and Income Trusts captured 9 percent of overall shareowner holdings.” This shift in holdings seems to come largely at the expense of Mutual Funds whose proportion of shareowner holdings has dropped from 64 percent in 2002 to 56 percent in 2004 despite increases in the number of funds held.
The TSX Group study, conducted by DINE & Associates, surveyed 2000 shareowners and an additional 500 non-shareowners between April 8 and May 18, 2004.
The complete study is available for purchase by contacting researchservices@tsx.com.
