Fund sales slip into negative territory

Mutual fund sales declined in April, as the last vestiges of RRSP season subsided. The industry tends to see a blip in March, as last minute contributions are invested, but by April, most capital is deployed and sales sag.

Last month the industry was hit by net redemptions of between $1.25 billion and $1.75 billion, according to preliminary sales data from the Investment Funds Institute of Canada (IFIC).

“Year-over-year asset growth remained strong at close to 20% in April though events in Europe led to asset growth being essentially flat from March,” said Pat Dunwoody, vice-president of member services and communications with IFIC. “The industry saw a slight month-over-month slowdown in Money Market fund redemptions in April which, coupled with the larger slowdown in long term fund sales that we tend to see after RRSP season, resulted in overall net redemptions for the month.”

Net assets of the industry were between $616.4 billion and $621.4 billion, compared to March’s month-end total of $618 billion.

Fidelity posted net redemptions of $425 million, with $401 million pulled out of long-term funds and $24 million out of money markets. This decline was due largely to one of its institutional clients taking its assets in-house.

Mackenzie Financial posted $209.4 million in net mutual fund redemptions, including $175.1 million from long-term funds and $34.3 million from money market funds. At month-end, total AUM was $65.1 billion at April 30, 2010.

AGF Management reported total net redemptions of $172.3 million, consisting of $158.3 million in long-term funds, and $14 million in money market funds. Total AUM at month-end was $44.9 billion.

RBC Asset Management was hit by $142 million in net redemptions, despite positive long-term sales of $483 million – that total was swamped by the $625 million in money market redemptions. The bank says money market funds were cannibalized by its high-interest savings accounts.

Investors Group reported $46.7 million in total net redemptions, with $33.1 million coming out of long-term funds, and 13.6 million from money market funds. Assets under management at the end of April stood at $59.1 billion.

But not all firms were in net redemptions.

DundeeWealth reported healthy net sales of $250 million, consisting of $266 million in long-term fund sales, slightly offset by $16 million in short-term fund redemptions. Mutual fund AUM at the end of the month was $29.5 billion.

Desjardins was not far behind with $222 million in net sales, with $192 million flowing into long-term funds and $30 million into money markets. Assets under management rose to $11.4 billion.

IA Clarington took in $93 million in net new money, including $99 million in long-term funds. The firm’s AUM at month-end was $8.2 billion.

CI Financial reported net sales of $43 million, with $20 million coming from long-term funds and $23 million from money market fund sales. Assets under management at April 30, 2010 were $68.5 billion.

Counsel Portfolio Services, a division of Investment Planning Counsel, reported $700,000 in net sales, with $500,000 coming from money markets and $200,000 coming from long-term funds. Mutual fund assets under management were $2.28 billion at April 30, 2010.

(05/04/10)