Fund sales, assets battered in September: IFIC

Mutual fund redemptions accelerated in September and industry assets dropped as markets weakened, according to new data from the Investment Funds Institute of Canada (IFIC).

The industry trade group reported that mutual fund redemptions almost tripled in September, surging from $3.1 billion in August to just under $9.0 billion last month.

Long-term fund redemptions were even higher at $9.8 billion, up from $3.0 billion in August.

The monthly redemption activity in September was led by the balanced category, which saw redemptions climb to just under $5.0 billion from $2.4 billion in the previous month.

At the same time, the other major asset categories — equity and bond funds — which recorded modest net redemptions in August, both saw redemptions spike in September.

Equity fund net redemptions jumped from $333 million to $2.9 billion in the month, and bond fund redemptions were up from $382 million to $1.9 billion.

While mutual fund redemptions surged, this paled in comparison to the weakness in markets, which drove a 3.9% drop in total assets under management (AUM) in September. Mutual fund AUM finished the month down by $71.9 billion at $1.76 trillion.

IFIC reported that ETF assets were down a similar amount, dropping 3.7% in September for a decline of $11.1 billion, leaving total AUM at $287.6 billion.

Despite the negative market action, ETF net sales climbed during the month. However, the positive net sales were led by money market funds ($1.7 billion), whereas long-term funds eked out a modest $136 million in net sales.

Overall, monthly ETF net sales came in at $1.8 billion, up from just under $1.5 billion in August but down from $2.9 billion in September 2021. Long-term net sales were down sharply from $2.6 billion in September 2021.

Equity ETFs were in negative sales territory in September, with $390 million in net redemptions, down from $1.2 billion in positive net sales for August.

Conversely, bond ETFs swung to positive territory, with $540 million in net sales, up from $347 million in net redemptions.

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.