Investors return to mutual funds in July

(August 6, 2003) July was a good month for the mutual fund industry, as investors piled back in to the tune of $300 million, according to estimates from IFIC.

“This is the first time that net sales have been positive since last RRSP season. The majority of the sales are likely from long-term funds which have been posting modest net sales for the past few months,” revealed Tom Hockin, IFIC president and CEO.

July marks the fourth consecutive month of growth in net sales and IFIC estimates that net assets under fund management came in between $400 and $405 billion by the end of the month. That would mark an increase of 3% over the June total of $390.8 billion and a gain of $33 billion over the past four months.

Investors appear to prefer bank-run funds, as the sales leader in July was CIBC Asset Management, whose estimated $178 million in net sales blew away the competition. The next highest sales were posted by BMO Funds at $95 million and National Bank Mutual Funds at $80 million.

“July was a breakthrough month,” said Brenda Vince, president of RBC Asset Management. “With overall positive net sales and the third consecutive month of positive net sales in long-term funds, it’s a clear indication that investors are feeling more confident about the markets.”

The IFIC estimate for RBC’s July sales is $43 million although a release from RBC indicates it could be higher. RBC says sales improved by almost $200 million over July 2002, which saw redemptions of $151 million.

Mackenzie formally announced its net sales for July, posting positive sales of $10.2 million, with money market and short duration equity funds leading the way with sales of $8 million. Mackenzie’s long-term equity and balanced funds saw sales growth of $2.2 million.

IFIC’s highest estimates for July 2003 net redemptions were with AGF Management Limited, with redemptions of $152 million, Investors Group with $114 million and Scotia Securities with $93 million.

Filed by Steven Lamb, Advisor.ca, slamb@advisor.ca