Fund sales rebound slightly in May

The mutual fund industry managed to post modest net sales in the month of May, according to the Investment Funds Institute of Canada, with net new money estimated at between $2.2 billion and $2.71 billion.

Fortunately, strong market performance helped boost industry assets under management. Net assets of the mutual fund industry at the end of May were estimated to be between $717 billion and $722 billion.

“Industry assets under management grew a robust 2.03% to end the month at close to $719.5 billion,” said Pat Dunwoody, IFIC’s vice-president of member services and communications. “Sales were also solid this month coming in at between $2.2 billion and $2.7 billion and are in line with total sales at this time last year.”

Even at the low end of IFIC’s estimate, net new sales were well higher than the April’s total of just over $560 million. But May’s sales were highly concentrated among a handful of firms.

RBC Asset Management announced net new sales of $1.3 billion — roughly half of all net sales in the industry — with $1 billion of that coming from its money market offerings.

“It was encouraging to see a noticeable pick up in flows into long-term funds in the second half of May,” said Brenda Vince, president, RBC Asset Management.

The bank did suffer a set-back, as its recent acquisition, Phillips, Hager & North, was hit by $108 million in net redemptions.

CI Financial, which does not report sales to IFIC, announced net sales of $265 million in May, on gross retail sales of $988 million. Long-term funds accounted for $219 million of net sales, with another $46 million heading into money market funds.

“It was an excellent month for sales and asset growth,” said Stephen MacPhail, president of CI. “The sales momentum of the RSP season has continued into the slower spring months, a tribute to the strength and depth of our product lineup.”

Mackenzie Financial reported net redemptions of $120.2 million, with gross sales of $607.8 million. Assets under management are estimated at $63.4 billion, as of the close of business, May 31.

AGF Management Limited also reported net redemptions in May, with $103 million coming out of long-term funds. Gross sales totalled $297.6 million.

“Overall AUM levels have remained relatively strong even though investors continue to remain cautious. However, with markets stabilizing, we anticipate renewed investor confidence in the later part of fiscal 2008,” said Blake C. Goldring, chairman and CEO, AGF.

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