Fund sales suffer July slump

Mutual funds sales slipped into negative territory in July, according to preliminary data released from the Investment Funds Institute of Canada. Investors sold off between $1.4 billion and $1.9 billion.

While net sales were negative, there was one ray of sunshine on the industry. Investors appear to be moving back into riskier assets, which are more lucrative for asset managers.

“Last month we saw the continuation of the trend we have seen since April — the movement of assets out of money market funds and into long-term funds accompanied by strong growth in assets under management overall,” said Pat Dunwoody, vice-president of member services and communications with IFIC.

“In addition to the trend back into long-term funds, we continue to see short-term investment money move out of money market funds and into other interest-bearing investments managed, in many cases, by the same financial institution.”

Investors who have remained invested have seen a substantial recovery in the markets, and mutual fund assets under management have increased by nearly $80 billion since February.

IFIC estimates that net assets in the industry were between $554.4 billion and $559.4 billion, up approximately 1.90% from June’s total of $547.1 billion.

Of course, not all firms were caught in the slump.

TD Asset Management reported $295 million in net sales for long-term funds, with money market net redemptions of $167 million. Total assets held in TD Mutual Funds totaled $51.5 billion.

“We experienced one of our strongest Julys on record for long-term fund net sales as investors and advisors maintained their confidence in the value and management of our fund lineup,” said Tim Pinnington, president of TD Mutual Funds. “Gross redemptions also continued to decline, down 50% from last year.”

TD reported sales were best among its fixed income and equity-based income funds.

CI Financial reported net sales of $159 million in July on gross sales of $624 million. Net long-term fund sales totalled $149 million, with an additional $10 million flowing into money market funds.

Assets under management climbed $1.6 billion to $61.6 billion. Retail assets (mutual funds and structured notes) accounted for $57.6 billion, while institutional assets totaled $3.9 billion.

Among its distribution channels, CI reported $27.1 billion in assets under administration, including $19.9 billion at Assante Wealth Management and $7.2 billion at Blackmont Capital.

Investors Group reported $21 million in net new money flowed into long-term funds, while investors sold off $16.1 million in money market funds. At month end, mutual fund assets under management were $54.2 billion, marking a year-to-date increase of $6.7 billion, or just over 14%.

Mackenzie Financial, also part of the IGM Financial family, announced $112.2 million in net long-term fund redemptions, with an additional $31 million in money market redemptions.

The firm finished the month with $58.8 billion in total assets under management, up $4.1 billion (7.5%) year to date.

DundeeWealth reported $276 million in net sales, on $505 million in gross sales. Mutual fund assets under management totalled just under $22 billion at the end of July.

AGF Management reported net long-term fund redemptions of $48.4 million, on gross sales of $179.9 million. Another $12 million (net) exited money market funds. At month end, the company’s mutual fund assets under management stood at $21.6 billion, an increase of 1.5% month-over-month.

(08/05/09)