Fund sales slip in March, but assets rise: IFIC

Mutual fund net sales were weak in March, and ETF sales slipped too, according to new data from the Investment Funds Institute of Canada (IFIC).

However, first quarter net sales still came in stronger than last year, and assets continued to rise.

The fund industry trade group reported that net sales of mutual funds were $202 million in March, down from $3.2 billion in February.

Yet, first quarter net sales were still much stronger than last year.

Overall mutual fund net sales totalled $2.6 billion in the first three months of 2024, compared with $175 million in net redemptions for the same period last year — when markets were grappling with rising interest rates and intensifying stress in the banking sector.

In the first quarter of 2023, long-term funds recorded $4.3 billion in net redemptions, while money market funds had positive net sales of $4.1 billion.

This year, both long-term funds and money market funds were in the black for the first quarter, recording net sales of $2.3 billion and $340 million, respectively.

In March, long-term mutual fund net sales came in at $309 million, as balanced fund redemptions jumped from $871 million to $2.7 billion in the month, and equity fund net sales dropped from $1.55 billion in February to $722 million.

Bond fund net sales held up relatively well in March, with monthly net sales slipping slightly from $1.77 billion in February to $1.69 billion last month.

Despite the weakness in net sales, IFIC reported that mutual fund assets under management (AUM) rose by $43.1 billion in March (up 2.1% from February) to $2.06 trillion.

ETFs outperformed mutual funds in March, as assets rose by 3.3%, gaining $13.4 billion to $417.1 billion.

ETFs held up better than mutual funds in terms of sales too, even as sales slipped a bit in March.

Overall monthly ETF net sales came in just shy of $4 billion, down from $5.5 billion in February.

Equity ETFs continued to lead the way, with $2.9 billion in monthly net sales, although net sales were down from $4 billion in February.

Bond fund sales also dropped from $1.2 billion to $701 million in March, while balanced ETF sales edged down to $427 million (from $450 million the previous month).

For the first quarter, ETF net sales totalled $12.6 billion, up from $10.45 billion in the first quarter last year.

Equity funds accounted for the lion’s share of first quarter net sales, with $9.4 billion worth.

Bond ETFs added $2.23 billion in net sales and balanced funds recorded $1.28 billion in net sales.