Fund sales turn positive in January

Investors dipped their toe back into the mutual fund market, but maintained their risk-averse stance in January, according to IFIC’s final tally of fund sales.

The industry as a whole reported net sales of $1.17 billion in January, compared to industry-wide net redemptions of $792 million in December, and $977.2 million in November. Net sales in January 2008 were $844.5 million.

Total mutual fund assets reported to IFIC were $491.1 billion at the end of January, down $15.9 billion (or 3.1%) from December. Market volatility was the culprit, wiping out about $17 billion in asset value in the first month of 2009.

“January fund sales strengthened from December and outpaced what we saw last year at this time due to both increased investor interest in bond funds and a substantial drop in net redemptions in other fund categories such as global equity,” said Pat Dunwoody, vice-president, member services and communications, IFIC. “Overall, it was a respectable start to the RRSP season.”

Investors once again focused on capital preservation, pouring their cash into money market funds, which gathered $1.01 billion in assets. A closer look reveals that RBC alone sold nearly $1.4 billion in money market investments.

High-yield fixed income funds attracted $297 million in net new assets, while Canadian short-term fixed income funds took in $146.6 million and U.S. money market funds saw inflows of $106.5 million.

The more profitable long-term mutual funds had net redemptions of $194.5 million, which is a massive improvement on the $2.58 billion in net redemptions posted in December.

Counsel Group of Funds, the smallest member of the IGM Financial family, posted $164.8 million, making it the overall leader in long-term fund sales.

MD Management, which is exclusive to doctors, posted net long-term sales of $117.4 million, followed by Dynamic, which collected $107 million in net new assets.

CIBC Asset Management sold $73.4 million in long-term funds, followed by Fidelity with $43.5 million.

Invesco Trimark posted the highest long-term fund redemptions, at $207.4 million, followed by Brandes, with $134.7 million. RBC rounded out the top three with net long-term fund redemptions of $115.6 million.

Packaged solutions were back in favour, with fund-of-funds taking in $144.6 million in net new money, compared to December’s redemptions of $55.6 million.

CIBC led this category, with $66.4 million in net sales, all of which went into proprietary products. RBC reported the second-highest net wrap sales, with $60 million, after $6.7 million in redemptions from non-proprietary products. Investors Group rounded out the top three, with $21.9 million in total net wrap sales, including $7 million pulled out of non-proprietary products.

(02/17/09)