Investors find safe haven in Canadian mortgage-backed bonds

Toronto

GLOBAL investors fleeing volatility are taking refuge in an unlikely place: a Canadian housing market that some speculators are still betting is a bubble ready to pop.

Investors, mainly in Europe and the US, have already bought a record amount of Canadian mortgage-backed covered bonds this year, according to Fitch Ratings. The demand comes amid near record household debt and lofty home valuations, which have made the stocks of Canada's largest private mortgage insurer and biggest non-bank lender the two most shorted in the country.