Fund sales expected to weather May correction

Despite a poor month on the markets, mutual fund sales are expected to come in at a respectable $350 million in May, according to preliminary estimates from IFIC.

Based on sample data, May net new sales will be in the range of $100 to $600 million, IFIC reported Friday. Still, that’s down sharply from May 2005’s total of $1.1 billion.

“May has traditionally been a slow month and this year, we’re coming off a really strong RRSP season,” noted IFIC president Joanne De Laurentiis. “Long-term fund sales are strong and that’s an indication that investors are confident in the industry for the long haul.”

Total assets for May are expected to be between $588 billion and $593 billion, down nearly 3% from last month.

Among fund companies, RBC Asset Management again led the way, with $267 million in net sales, followed closely by CI Investments, at $238 million.

“Our sales continued to show strength, despite the uncertain market conditions in May,” said Stephen A. MacPhail, CI’s president and chief operating officer.

May laggards included CIBC Asset Management and AIM Trimark Investments, both with nearly $300 million in net redemptions. AIC was off $171 million.

AGF, which does not report to IFIC, reported net redemptions of $11 million in May, a dramatic improvement from last May when redemptions stood at $205 million.

AGF’s gross sales last month were $366 million, an increase of 110% from the May 2005.

“Our client-centric service approach has resulted in us doing more business with advisors,” said AGF president Blake Goldring. “We view the doubling of our sales as feedback that our chosen strategy is working.”

Filed by Doug Watt, Advisor.ca, doug.watt@advisor.rogers.com