Fund sales turn positive in January

The mutual fund industry staged a comeback in January, posting net sales of between $600 million and $1.16 billion, according to preliminary data released by the Investments Funds Institute of Canada.

That’s a vast improvement from November and December of 2008, when IFIC reported industry wide net redemptions of $977.2 million and $792 million, respectively.

“We saw a significant deceleration in long-term fund net redemptions coupled with strong Money Market fund sales last month”, said Pat Dunwoody, vice-president of member services and communications with IFIC. “We will know more when we report the final data at mid-month whether or not investors were moving back into certain long-term fund categories as we saw in December.”

IFIC estimates that net assets of the mutual fund industry for the month of January will be between $488.1 billion and $493.1 billion, down about 3.22% from $507 billion reported in December.

The reports come ahead of the preliminary sales estimate compiled by the Investment Funds Institute of Canada, which is due out at the end of today.

CI Financial slipped into net redemptions in January, with a net outflow of $97 million on gross sales of $638 million. Assets under management stood at $52.2 billion by month end, down from $54.6 billion at the end of 2008.

Across the company’s operating units, money market funds saw net inflows of $2 million, while $99 million flowed out of long-term funds. The company attributed its net redemptions to a $219-million redemption by a single institutional investor.

“CI posted net sales of $1.8 billion in 2008 and the factors driving those sales remain in place,” said Stephen MacPhail, CI president. “We continue to have strong sales from products such as the SunWise Elite Plus segregated funds, Harbour Funds, Cambridge Funds and Portfolio Series, as shown by January net sales of $122 million when the one institutional redemption is netted out.”

Mackenzie Financial reported net redemptions of $103.8 million on gross sales of $382.3 million. Long-term funds saw $51 million in net outflows, while another $52.8 million exited the firm’s money market funds.

Total assets under management ended the month at $52.5 billion, down from $54.7 billion at the end of December.

Mackenzie’s corporate cousin, Investors Group, reported that $25 million in net new money flowed into its long-term funds, while money market funds saw positive net sales worth $14.3 million.

Investment Planning Counsel reported that its Counsel Group of Funds had net redemptions of $1.3 million in its long-term funds, while $3 million in new money flowed into money markets.

Mavrix Fund Management reported net redemptions of $2.1 million on gross sales of $1.9 million. Total AUM decreased 0.3% over the month to $256.8 million; year over year, the company’s assets have fallen by 55%.

“Improving valuations in the small cap and junior natural resources markets helped our total AUM remain virtually unchanged for the month,” said David Balsdon, CCO and secretary-treasurer. “Gross redemptions for Mavrix in January have been the lowest reported in over five years, and we continue to see sales strength in our conservative income-oriented mutual funds.”

(02/03/09)