Fund sales hit by market jitters

Wild swings in the equity markets, fuelled by fears of a recession in the U.S. and the spectre of collapsing American financial institutions, made mutual funds a tough sell in March.

Net sales of mutual funds for the month are estimated to be between $2.3 billion and $2.8 billion, according to preliminary data from the Investment Funds Institute of Canada.

“Investors continue to focus on money market funds though we expect that they will move this money into long-term funds in the coming months as the volatility subsides,” said Pat Dunwoody, vice-president of member services and communications with IFIC.

Net assets under management by the industry are estimated at between $681.8 billion and $686.8 billion, up about 0.83% from the total at the end of February.

Mackenzie Financial announced $42.6 million in net redemptions among its long term mutual funds, on $495.6 million in gross sales. Money market funds saw positive net inflows of $156.4 million on gross sales of $307.5 million. Total assets under management slumped to $60.9 billion, down from $63.7 billion at the end of March 2007.

AGF Management reported $20.4 million in net redemptions of long term funds, on gross sales of $322.5 million. Total assets under management rose 1.3% from the end of February, however.

“Market appreciation has resulted in our mutual fund AUM increasing to $28.4 billion at the close of business on April 1, 2008,” said Blake Goldring, chairman and CEO, AGF Management Limited. “While investors in our funds remained cautious in March, we anticipate that future reduced market volatility will result in renewed investor confidence.”

RBC Asset Management announced net sales of $1.2 billion, with $1.1 billion of that being in money market funds. Long term funds sales totaled just $164 million. Assets under management increased by $1.5 billion, or 1.7%, over the month.

CI Financial released its sales data on Tuesday, reporting net sales of $397 million in long-term funds and $55 million in money market funds, spanning its CI Investments and United Financial operations.

“March ended on a very good note for CI, with retail managed assets up 1.3% over the month and net sales for February and March combined approaching $1 billion,” said Stephen A. MacPhail, CI President. “After the incredible turmoil during the quarter, our retail managed assets are now within 2% of where they were at December 31, 2007.”

At the end of March, CI managed $65.8 billion in assets. MacPhail also revealed that the firm’s new Cambridge funds, headed up by Alan Radlo, have gathered $160 million in assets since their launch in January.

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