Mutual fund sales take April hit as investors ditch money market funds

Road to recovery?: Mutual fund performance turns positive (May 15, 2003) Canadian investors bailed out of mutual funds in a big way in April despite signs of a stock rally. Net redemptions reached $1.6 billion last month, the highest since October 1992, according to data released today by IFIC. The bulk of the outflows, around […]

By Doug Watt | May 15, 2003 | Last updated on May 15, 2003
2 min read
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  • Mutual funds falling out of favour, survey suggests
  • Combatting uncertainty: Five essential tools to ease client anxiety now
  • Bear necessities: Preserving your clients’ wealth in down markets

    So where is the money going? CIBC World Markets economist Benjamin Tal has been tracking the estimated $6 billion that has flowed out of money market funds over the past year. He notes that while investment in GICs is up 7% year-to-date, cash is still king.

    “Cash in chequing and savings accounts is rising by close to 5% on a year-over-year basis while cash positions in brokerage accounts are still at elevated levels,” Tal said in a commentary released earlier this week.

    Tal estimates the current value of personal liquid assets in Canada stands at $45 billion, a record high. And he says that liquidity bubble won’t be bursting anytime soon. “The most likely scenario is that this cash will remain on the sidelines for the remainder of the year, with 2004 seeing a gradual and hesitant move from cash into equities.”

    Filed by Doug Watt, Advisor.ca, dwatt@advisor.ca

    (05/15/03)

    Doug Watt

  • Road to recovery?: Mutual fund performance turns positive
  • Seeing red: March fund sales drop again after brief recovery in February
  • Mutual funds falling out of favour, survey suggests
  • Combatting uncertainty: Five essential tools to ease client anxiety now
  • Bear necessities: Preserving your clients’ wealth in down markets

    So where is the money going? CIBC World Markets economist Benjamin Tal has been tracking the estimated $6 billion that has flowed out of money market funds over the past year. He notes that while investment in GICs is up 7% year-to-date, cash is still king.

    “Cash in chequing and savings accounts is rising by close to 5% on a year-over-year basis while cash positions in brokerage accounts are still at elevated levels,” Tal said in a commentary released earlier this week.

    Tal estimates the current value of personal liquid assets in Canada stands at $45 billion, a record high. And he says that liquidity bubble won’t be bursting anytime soon. “The most likely scenario is that this cash will remain on the sidelines for the remainder of the year, with 2004 seeing a gradual and hesitant move from cash into equities.”

    Filed by Doug Watt, Advisor.ca, dwatt@advisor.ca

    (05/15/03)