Mutual fund redemptions climb, ETF sales slow

Mutual fund net redemptions edged higher in July and ETF sales eased a bit, according to new data from the Investment Funds Institute of Canada (IFIC).

The industry trade group reported that total mutual fund net redemptions rose to $4.8 billion last month, from $4.2 billion in June.

Long-term fund net redemptions were essentially unchanged at $5.7 billion, but money market fund sales declined from over $1.5 billion in June to under $900 million in July, IFIC reported.

Balanced funds continued to lead the redemption activity, with $4.6 billion in monthly net redemptions, which was up a bit from the previous month.

Redemptions from equity funds eased slightly in July, coming in at $1.85 billion for the month, down from $2.4 billion in June.

At the same time, bond fund net sales declined from just over $900 million in June to just under $400 million in July. Specialty fund net sales climbed from $127 million in June to $292 million last month.

Despite the net redemptions, mutual fund assets were up by 1.0% in July to $1.91 trillion — an increase of $19.5 billion in the month. Since the start of the year, assets are up by $100 billion.

IFIC also reported that ETFs continued to turn in positive net sales in July, with $2.8 billion in monthly net sales, which was down from $3.5 billion in June.

The decline in ETF net sales came as long-term net sales eased from $2.84 billion in June to $2.04 billion in July, while money market sales edged up from $646 million in June to $754 million in July.

This drop in long-term sales came across all the major asset categories, IFIC noted.

Bond ETF sales eased from $1.17 billion in June to $986 million in July, and equity ETF sales slipped from $1.07 billion to $887 million.

Specialty ETF sales were down from $443 million in June to just $37 million in July, and balanced fund sales declined from $151 million in June to $133 million in July.

Powered in part by the positive net sales activity, ETF assets grew at more than double the rate of mutual fund assets in July, rising by 2.4% month over month to $356.8 billion at the end of July.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.