As assets rebound, ETF sales revive — mutual funds don’t

Mutual funds remained in net redemptions in October and ETF sales bounced back, as industry assets rebounded too.

According to new data from the Investment Funds Institute of Canada (IFIC), mutual funds recorded $8.0 billion in net redemptions last month, and long-term funds had $9.2 billion in redemptions — which was down slightly from $9.8 billion in long-term net redemptions in September.

In October, redemptions from balanced funds increased, rising from just under $5 billion in September to $5.7 billion.

However, equity fund redemptions improved, dropping to $1.9 billion last month from $2.9 billion.

Bond fund redemptions eased a bit too, declining from $1.9 billion to almost $1.7 billion.

Year to date, long-term net redemptions are now at about $31.5 billion. By contrast, at the same point last year, the industry had booked $111.8 billion in positive net sales.

IFIC also reported that, while mutual funds remained in negative net sales territory in October, ETF sales jumped from $1.85 billion in September to $3.35 billion in October.

The rebound came entirely in long-term funds.

In October, long-term ETFs recorded $1.85 billion in net sales, up from just $136 million in the previous month.

In particular, equity ETFs enjoyed $896 million in monthly net sales, compared with $390 million in negative net sales for September.

Bond ETF sales also rose, climbing from $540 million to $746 million, month over month.

The rebound in ETF net sales came as assets surged by 4.5% in October to $300.5 billion.

Mutual fund assets also increased, albeit at a slower pace — rising 2.3% in the month to $1.796 trillion, which represented a gain of over $40 billion.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.