March goes out like a lion for mutual funds

Mutual fund sales finished the first quarter in net redemptions, but ETF sales held up better, according to the latest data from the Investment Funds Institute of Canada (IFIC).

The industry trade group reported that mutual funds recorded $3.4 billion in net redemptions for March, which left the industry with $6 million in redemptions for the first quarter.

The modest total in overall redemptions belied the fact that long-term funds recorded $4.2 billion in net redemptions in the first quarter, which was almost fully offset by positive net sales for money market funds.

In March alone, long-term funds had $5.2 billion in net redemptions.

The balanced category led the way with over $9.5 billion in first-quarter net redemptions, followed by $2.2 billion in redemptions from equity funds.

These trends were partly offset by $6.3 billion in net sales for bond funds in the first quarter and almost $1.2 billion in sales for specialty funds.

Despite the net redemption activity, IFIC also reported that mutual fund assets rose by $15.3 billion in March, or by 0.8%, to finish at $1.88 trillion by the end of the first quarter.

While mutual funds faced hefty net redemptions in March, ETFs recorded $6.84 billion in monthly net sales, which pushed first-quarter net sales to $10.45 billion.

Compared with last year, ETF net sales were up in March but down for the first quarter overall. Net sales in March 2022 totalled $4.58 billion, and first-quarter net sales came in at $13.2 billion.

Equity ETFs led in March and for the quarter, with almost $3.8 billion in monthly net sales and $4.4 billion in the first quarter.

Bond ETFs generated $2.3 billion in net sales for March, which pushed the first-quarter total to $2.58 billion.

Alongside the positive net sales, ETF assets rose 2.8% ($9.2 billion) in March to $337.1 billion, IFIC said.

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.