‘Sell America’ Trade Seen Giving Canadian Stocks an Edge in 2026

Canadian stocks just notched their best year relative to US shares in two decades, and money managers are betting the outperformance has further to run as investors concerned with volatility in American equities seek calmer markets.

The S&P/TSX Composite Index jumped 28% last year, far outpacing the S&P 500’s 16% gain. The trend has carried into January, with the Canadian benchmark up 3.7%, compared with a 1.7% advance for US stocks. Just two weeks into the new year, a string of shock developments — including the abrupt ouster of Venezuelan President Nicolas Maduro, a criminal probe targeting the Federal Reserve and major banking policy announcements delivered via social media — have unsettled US markets and pushed investors toward less volatile alternatives.