Mutual funds sales lukewarm

The sale of mutual funds was tepid in January, a month traditionally seen as the start of “RRSP Season” for many investors. Industry net sales were somewhere between $314 million and $814 million, according to a preliminary report from the Investment Funds Institute of Canada.

“This January we were seeing very strong portfolio rebalancing activity out of money market funds and back into the long-term fund categories,” said Pat Dunwoody, vice-president of member services and communications with IFIC. “This contrasts the results for the past two years and, as January tends to be the month when advisors sit down with their clients to review their portfolios, likely highlights increasing comfort among both investors and their advisors regarding the risk/return tradeoff in markets generally.”

IFIC estimates net assets of the mutual fund industry at the end of the month were between $581 billion and $586 billion, down 1.97% from December’s total of $595.2 billion.

RBC Asset Management and Phillips, Hager & North posted net redemptions of $486 million, due to a massive $1.3 billion in net outflows from money market funds which overwhelmed $793 million in net long-term fund sales. Assets under management decreased by $2.2 billion, or 2.1%, in January.

“We saw the strongest net sales for our long-term funds since prior to the economic downturn,” said Doug Coulter, president of RBC AM. “Advisors and investors continue to reallocate money market assets into investment opportunities with long-term strategies that will help in rebuilding their portfolios.”

DundeeWealth reported net additions of $407 million, with long-term mutual fund net sales totalling $645.5 million. That total includes $300 million in rollovers from flow-through LPs into mutual funds. Mutual fund assets under management totaled $26 billion.

Fidelity Investments reported $279 million in net new money flowed into long-term funds.

CI Financial reported net mutual fund sales of $100 million for the month of January, with $116 million in net long-term fund sales and $16 million pulled out of money market funds. Total mutual fund assets under management at the end of the month were $61.2 billion.

Investors Group reported $58.2 million in net new sales, with $69.6 million in net long-term fund sales, and $11.4 million in money market redemptions. Mutual fund assets under management were $56.3 billion at the end of January, up from $57.7 billion at the end of December.

Counsel Portfolio Services reported $12.5 million in net new mutual fund sales, with $11.5 million flowing into long term funds, and another $1 million into money markets. Assets under management were $2.11 billion at month-end, down from $2.14 billion at December 31, 2009.

Mackenzie Financial reported net redemptions of $186.4 million for the month, with $132.2 million in long-term fund redemptions, and $54.2 million in money market redemptions. Assets under management were $62.5 billion at January 31, 2010.

AGF Management reported net redemptions of $120.7 million, with investors pulling a net $113.8 out of long-term funds and $6.9 million from money market funds. Total mutual fund assets under management were $21.9 billion.

The net redemptions in long-term funds marks an 22% increase in redemptions over December’s sales. Investors could be reacting to the departure of popular balanced fund manager Christine Hughes.

(02/03/10)