Fund sales remain strong in March

Canadian mutual funds continued a strong sales streak in March, despite the closing of the 2010 RRSP contribution window, according to data collected by the Investment Funds Institute of Canada.

Total net fund sales tallied $3.72 billion, marking the third consecutive month of sales above $3 billion. Net sales were down from $5.87 billion in February, but sales traditionally fall off in March after a flurry of last-minute RRSP contributions.

“In the first quarter of 2011, net sales were just over $12.6 billion, almost double that of the first quarter of last year,” said Jon Cockerline, director, policy and research, IFIC. “The driving force behind these strong numbers continues to be long-term fund sales, which were almost $2 billion more than last year.”

Total industry assets under management ended the month at $661.8 billion, an increase of $3.44 billion as market declines eroded some of the net inflows. Year over year, industry assets are up $72.1 billion, with net sales of $18.1 billion.

Investors continued to favour long-term funds, with net sales of $4.31 billion, down from $6.82 billion in February, but roughly inline with last March’s $4.35 billion.

Balanced funds were by far the most popular, with net sales of $4 billion, up from $3.57 billion in March 2010. Over the past 12 months, balanced funds have attracted $29.2 billion in net sales, up from $22 billion in the previous 12 month period.

Global balanced funds edged out domestic balanced funds, with $2.1 billion in net sales, versus $1.9 billion. Global balanced has been the most popular fund class for five consecutive months, and eight of the last 12 months. In fact, domestic balanced fund sales have topped global balanced only once in the past year, in June 2010.

Investors returned to fixed income funds, adding $390.3 million in net new sales, after $189 million in net redemptions of in February. So far this year fixed income funds have attracted just $417.2 million in net sales, as investors ramp up their risk appetite. This stands in stark contrast to the first quarter of 2010, when fixed income funds brought in $3.23 billion.

Global and high yield funds attracted more than double their domestic counterparts, with net sales of $280.3 million, versus $108 million.

Equity fund sales slipped back the red, with net redemptions of $86.8 million. While that’s better than last March’s $267.9 million in net redemptions, it marks a massive turnaround from last month’s net sales of $1.53 billion.

Within the equity fund space there were pockets of positive flows. U.S. Equity funds attracted modest net sales of $177.6 million, while sector funds brought in $64.4 million. Canadian equity redemptions totaled $95.5 million, while global and international mandates saw $233.5 million in net redemptions.

Money market funds were hit with net redemptions of $589.7 million, down from $949.7 million in February and $2.3 billion in March 2010.

Fund-of-funds attracted $2.41 billion in net sales, down from $3.45 billion in February and up slightly from $2.24 billion in March 2010. In the past year, fund-of-fund net sales totaled $19.4 billion, up from $14.5 billion in the 12 months ending March 2010.

Meanwhile, standalone funds posted net sales of $1.32 billion, down from $2.42 billion in February.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.