U.S. President Donald Trump

’s tariffs, threats of annexation and assorted insults have infuriated Canadians, leading them to sell off American

real estate

and boycott products. The nation’s investors seemingly never got the memo.

Canadian investors have injected $124 billion into

U.S. stocks

in 2025, even as Trump’s trade war disrupted the two countries’ longstanding, largely tariff-free relationship, according to data compiled by Warren Lovely at

National Bank of Canada

Financial Markets. That’s on track for the largest yearly inflow since at least the 1990s.

Canadian investors can’t seem to resist the lure of the U.S. market, which has outperformed the domestic benchmark in each of the past two years. Pinpointing the exact reason for this year’s enthusiasm — when the relations between the two countries have grown more tense — is a tricky proposition. But optimism over an artificial intelligence frenzy that’s pushed U.S. tech titans to multiple records looms large.

“It’s a lot of performance chasing,” said Greg Taylor, chief investment officer at Vancouver-based PenderFund Capital Management Ltd. He pointed to years of U.S. market outperformance, thanks to the rise of AI and inflows into mega-cap

tech stocks.

This year, Canadian shares have proven the better bet. Canada’s benchmark index has outperformed its US peer, with the

S&P/TSX Composite Index

climbing almost 15 per cent, compared with a 10 per cent gain in the S&P 500 Index.

Still, locals have “seemingly failed to employ a ‘buy Canadian’ (or ‘sell American’) philosophy in their own portfolio dealings,” Lovely, managing director at the firm, wrote in a note to clients last week. He was describing the trend he has tracked over the course of 2025, a time when U.S. liquor has been pulled off Canadian store shelves and cross-border tourism has dwindled. Lovely called the figures “rather stunning.”

The buying spree contradicts a poll from July showing that Canadians want their pension fund managers to reduce holdings of U.S. assets.

Sun Life Financial Inc.

, one of the largest workplace pension plan providers in Canada, said that Trump’s tariff war earlier this year did push some local investors to rotate their portfolios away from U.S. assets.

The Canadian benchmark hit its 30th record high for the year on Friday on signs of de-escalation in the trade war with the U.S.

Prime Minister Mark Carney

said Friday the country would remove its retaliatory tariffs on the U.S. in an olive branch to Trump.

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Taylor, who helps oversee $3 billion for PenderFund Capital Management, said he’s got a preference for Canadian and European equities right now. He said they look more attractive than U.S. stocks after a multi-year run of outperformance.

“The U.S. market is looking really crowded and stretched right now,” Taylor said. The S&P/TSX Composite Index “is looking like a nice setup for the next 12 months.”

Bloomberg.com