Fund sales in January provide poor start to RRSP season

The unofficial kickoff to RRSP season is off to a poor start in terms of sales, with both mutual funds and ETFs in net redemptions in January despite assets rising in the month, based on new data from the Investment Funds Institute of Canada (IFIC).

The industry trade group reported that mutual funds recorded $477 million in net redemptions last month, while ETFs had $491 million in monthly redemptions.

On the mutual fund side, the net redemptions were down from $8.7 billion in December 2022, as sales trends in the equity and bond categories both improved, while the balanced category remained in hefty net redemptions last month.

Bond funds recorded $3.5 billion in positive net sales in January, reversing $2.25 billion in net redemptions in December.

Equity fund redemptions also dropped, from $3.1 billion in December to $668 million in January.

Balanced mutual funds had $4.4 billion in monthly net redemptions to start the year, down slightly from just under $5.0 billion in December.

For ETFs, strong net sales in the bond and equity fund categories in December swung to net redemptions in January, IFIC reported.

After recording over $3.5 billion in monthly net sales to end the year, bond ETFs suffered $940-million worth of redemptions in January.

Equity ETFs had $383 million in net redemptions last month, down from $1.95 billion in net sales in December.

Balanced ETF sales also dropped, from $125 million in December to $65 million in January.

The specialty category was the lone bright spot for ETF sales, with $492 million in positive net sales last month, following $94 million in monthly net redemptions in December.

While net sales were in negative territory to start the year, IFIC reported that assets under management surged for both sides of the industry.

Mutual fund assets rose by 4.3% in January to $1.9 trillion — a $77.0-billion increase.

ETF assets were up by $15.2 billion, or 4.8%, to $328.9 billion, the trade group reported.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.