Equity ETF sales surge in July, equity mutual funds sink

Investors poured money into Canadian equity ETFs in July, while shunning equity mutual funds, according to data released Friday from the Investment Funds Institute of Canada (IFIC).

Equity ETFs posted net sales of $3.1 billion in July, up from net sales of $2.7 billion in June. In contrast, equity mutual funds saw net redemptions of $87 million, down from net sales of $245 million in June.

Net sales for ETFs overall more than doubled net sales for Canadian mutual funds in July.

Canadian ETFs posted net sales of $7.3 billion in July, up from $4.1 billion in June 2020, and up from $1.6 billion in July 2019. Meanwhile, Canadian mutual funds recorded net sales of $3.4 billion in July 2020, down from $3.9 billion in the previous month, but up from $2.5 billion in July 2019.

ETF investors put $3.3 billion into bond ETFs in July, up from $1.1 billion in bond ETFs in June. Meanwhile, mutual fund investors put $2.6 billion in bond mutual funds in July, down from $3.1 billion in June.

Balanced ETFs posted net sales of $140 million in July, up from $131 million in June. Balanced mutual funds posted net sales of $203 million, down from $550 million in June.

While both ETF and mutual fund assets increased in July, ETF assets grew at a rate roughly 2.5 times greater in the month.

ETF assets totalled $231.7 billion at the end of July 2020, an increase of $13.9 billion or 6.4% compared to June 2020. Mutual fund assets totalled $1.64 trillion at the end of July 2020, an increase of $42.1 billion or 2.6% compared to June 2020.

IFIC’s data is adjusted to remove double-counting mutual funds that invest in other mutual funds, but the same adjustment is not made for ETFs.

Staff

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