Shift to long-term funds continued in August

Investors sold off their mutual fund holdings in the month of August, with the industry being hit with net redemptions of between $185.4 million and $685.4 million, according to preliminary estimates by the Investment Funds Institute of Canada (IFIC).

IFIC estimates net industry assets for the month of August were between $563 billion and $568 billion, up about 1.6% from the July total of $556.7 billion. Those gains were due to strong returns on the equity markets.

“August looks to be shaping up as another good month for mutual fund investors. Collectively, they have seen their mutual fund account balances increase by close to $58 billion or 11.4% since the start of 2009,” said Pat Dunwoody, vice-president of member services and communications with IFIC. “As has been the case since April, long-term fund sales were strong in August with sales higher than they have been over the last three years at this time.”

Investors continued to pull assets out of money market funds in August, while long-term funds saw modest sales success.

RBC Asset Management, and its Phillips, Hager & North division, announced net redemptions of $1.1 billion, although long-term funds saw positive net sales totaling $470 million.

TD Asset Management reported $353 million in net sales of long-term funds for the month, and $250 million in money market fund redemptions.

CI Financial announced net sales of $65 million for August, on gross sales of $534 million. Assets under management surged $1.3 billion thanks to market effect, to $62.9 billion at the end of August.

Fidelity Investments Canada reported total net inflows of $240 million, with long-term funds seeing net inflows of $287 million.

DundeeWealth reported long-term mutual fund net sales of $233 million, slightly offset by $17 million in money market fund redemptions. Assets under management grew by 2.3% to $31.8 billion, thanks to $464 million in market appreciation.

Mackenzie Financial announced on $125.9 million in net redemptions on gross sales of $289.2 million.

Investors Group fared better, attracting $29.7 million in net new money to its long-term funds, while money market funds saw $9.4 million in net redemptions.

Counsel Group of Funds announced $5.7 million in net new sales of long-term funds, with an additional $200,000 in net new money landing in money market funds.

AGF Management reported net redemptions of long-term mutual funds were $32.9 million for the month, on gross total sales of $180.2 million.

(09/02/09)