Fund sales rise, total assets fall

Mutual fund sales came in on the high side of preliminary estimates, with overall net sales totaling $693.5 million in January. Now for the bad news: total industry assets sank $10.6 billion or 1.8% from December, to $584.6 billion, due to market affect.

Long-term funds accounted for $532.5 billion of that total, down $8.3 billion or 1.5% from December.

Investors placed $3.14 billion in net flows to long-term funds, up from $2.47 billion in December. In January 2009, long-term funds saw net redemptions of $194.5 million.

Money market funds were hit by $2.44 billion in net redemptions.

“With $3.1 billion in long-term fund net sales last month, we’ve started the year on a very positive note and we’ve got a good start to the 2010 RRSP season,” said Pat Dunwoody, vice-president, member services and communications.

Balanced funds remained the most popular option, with net sales of $2.27 billion, up from $1.71 billion in December. Over the past 12 months balanced fund have seen sales of $13.6 billion, a far cry from the $322.1 million in net redemptions they suffered in the preceding 12 month period.

Bond funds attracted $806.5 million in net new money, down from December’s $1.35 billion, but up from $319.3 million in January 2009. Fixed Income funds have been almost as popular as balanced funds over the past 12 months, with $13.1 billion in net sales.

“Balanced fund sales were the largest contributor to overall sales last month and were driven by strengthening fund-of-fund sales,” says Dunwoody. “We also saw Equity fund sales move into positive territory for the first time since May 2009 which was another encouraging development.”

Equity fund sales recieved scant $29.7 million in new money. But the weakness of the broad category masked pockets of strength. Natural resources equity funds posted net sales of $321.5 million, while strong Canadian dividend and income equity funds pulled in $197 million.

Sales of fund-of-fund products were $1.63 billion, up from $1.31 billion in December and $145 million in January 2009. In the past 12 months, these products have enjoyed $10.29 billion in sales, compared to $3.69 billion over the previous 12 month period.

(02/16/10)