Fund sales topped $3 billion in March

(April 15, 2005) The mutual fund industry attracted net new sales of $3.4 billion in March. That’s nearly $2 billion less than February, when sales hit $5.3 billion, a five-year high.

Net sales for the first three months of the year totalled $9.4 billion as RSP season wound down, said IFIC president Tom Hockin, down from $10.9 billion over the first quarter of 2004.

“The general trend was down from a year earlier, about 15%,” says Morningstar Canada investment funds editor Rudy Luukko. “But if you exclude money market funds, net new sales are down year-over-year by 7.7%.”

Long-term funds accounted for $3.3 billion in new sales while money market funds generated just $97 million. Gross sales for March, including money market funds, were $14.8 billion. Industry assets stood at $513.9 billion, off slightly from February’s record high.

“This reflected generally poor performance for the month,” says Luukko. “All but four of Morningstar’s 32 fund indexes had negative returns in March so that would explain why assets declined.”

Among fund companies, CI was the overall leader in March, with $641 million in net sales, followed by RBC, TD, Aim Trimark, Mackenzie and Dynamic. The best-selling fund was CI’s Signature High Income.

“There was an impression that the independents were hurting, but some of them did quite well last month,” says Luukko.

At the bottom of the sales chart was AIC, with $310 million in net redemptions, followed by AGF, off $174 million and Altamira, down $73 million.

Balanced funds produced $1.2 billion in net new sales in March, followed by Canadian dividend ($849 million), Canadian bond ($603 million) and income trusts ($539 million).

Canadian equity funds had the most redemptions in March. “The largest single source of that was a trio of AIC funds,” Lukko notes. AIC’s assets are down 20% compared to last year.

Filed by Doug Watt, Advisor.ca, doug.watt@advisor.rogers.com