February fund sales rocket higher

(March 2, 2005) The last full month of the RSP season appears to have been particularly kind to mutual fund sales, according to preliminary data from IFIC.

Based on early reporting from fund companies, the industry group is predicting net new sales of between $4.7 billion to $5.3 billion for February — welcome news after January’s revised sales total of $660.7 million, which came in well under IFIC’s estimated range of between $1.3 and $1.7 billion. That discrepancy was attributed to a one-time anomaly, involving AGF, which does not report preliminary numbers to IFIC.

“We are encouraged that Canadian investors continue to recognize the value mutual funds can contribute to a diversified portfolio,” said John Murray, IFIC’s vice president, regulation and corporate affairs. “Over the next couple of months, we expect investors who were unsure of where to put their RRSP contributions initially, now consider mutual funds.”

IFIC estimates net industry assets of between $514 billion and $519 billion at the end of February, up approximately 3.3% from January’s total of $500.4 billion.

Some of the larger fund manufacturers have started to report promising sales data for the month.

On Tuesday, CI Fund Management announced “strong net sales” totaling $448 million for February, including $346 million at CI Funds, $37 million in its Assante Wealth Management division and $65 million through Skylon Advisors. Assets under the CI corporate banner climbed $1.8 billion to a record $69.9 billion.

“We are quite pleased with this level of sales, which was well diversified among many of CI’s funds,” said Stephen A. MacPhail, executive vice-president, COO and CFO of the parent company. “The strong performance of a wide range of our funds is attracting increasing attention from advisors and investors and has left CI well positioned for the future.”

RBC announced net long-term fund sales of $1.16 billion, while money market redemptions totaled $153 million. In the past twelve months, RBC total fund net sales total $3 billion, even after money market redemption of $1.3 billion.

“We couldn’t have asked for a better month. This February represents only the second time in our history where we have had net sales of more than $1 billion in long-term funds in one month,” said Brenda Vince, president, RBC Asset Management.

But not all of the manufacturers can be in the billion dollar club. Scotia Securities reported total net sales of $254 million for the month, with long term fund sales totaling $274.4 million.

IGM, parent of Investors Group, Mackenzie and Investment Planning Counsel announced total net sales of $526.3 million. Broken down among divisions, IG took in $299.3 million; Mackenzie, $189.6 million; and Investment Planning Counsel, $37.4 million. IGM Financial reported total fund assets under management of $85.8 billion.

AGF Management has reported another month of net redemptions totaling $215.4 million for February, compared to net redemptions of $72.3 million in February, 2004.

Filed by Steven Lamb, Advisor.ca, steven.lamb@advisor.rogers.com