Fund sales sluggish in hot market

The Canadian mutual fund industry saw assets under management grow by a healthy $20 billion in April, but almost all of that was due to market affect, rather than new inflows, according to preliminary sales data from the Investment Funds Institute of Canada (IFIC).

Net sales totaled between $257.9 million and $757.9 million for the month, compared to net sales of $519.7 million in March.

“Investors appeared much more confident last month moving assets from money market funds back into long-term fund categories,” said Pat Dunwoody, vice-president of member services and communications with IFIC.

Net industry assets are estimated to have been between $514.6 billion and $519.6 billion by the end of April, up approximately 3.96% from $497.4 billion in March.

Across the industry, asset managers benefited far more from market affect than from sales.

RBC Asset Management announced April net sales totaling $818 million, with $665 million landing in money markets and $153 million in long-term funds. Assets under management grew even faster, however, by $3.3 billion.

CI Financial reported net mutual fund sales of just $59 million, on gross sales of $575 million. And yet the firm’s retail assets under management grew by $2.9 billion to $56.1 billion, as of April 30, 2009.

“This is the second straight month where assets have grown by more than 5%, resulting in CI’s assets under management increasing by about $6 billion since February 28,” said Stephen A. MacPhail, CI President. “This is very positive news for investors in our funds as the gains reflect significantly improved equity values since early March.”

TD Asset Management reported net long-term fund sales of $141 million for the month, while investors pulled a net $180 million out of money market funds. Assets under management totaled $47.6 billion at month-end.

“We saw investors return to long-term funds during April as yields on money market funds generally hit historic lows,” said Tim Pinnington, president, TD Mutual Funds. “As the corporate bond market continues to recover, we are seeing renewed interest in our industry-leading fixed income products.”

Investors were not taking on too much risk with those long-term funds. The top sellers were TD’s Short Term Bond, Dividend Growth, Canadian Bond, Dividend Income funds and the TD Comfort Balanced Portfolio.

Investors Group reported net redemptions in both long-term funds ($66.7 million) and money markets ($19.9 million), for total net redemptions of $86.6 million. Assets under management were $49.2 billion at the end of the month.

Mackenzie Financial reported net outflows of $155.8 million, on gross sales of $314.5 million. Assets under management totaled $55 billion.

AGF Management reported a 4.7% increase in mutual fund AUM over the month, rising to $20 billion. At the same time, the company was hit by $36.2 million in net long-term fund redemptions.

(05/04/09)