RRSP season got off to a solid start with almost $700 million in net sales for January, led by $3.1 billion in net sales of long-term funds, the Investment Funds Institute of Canada said Tuesday.

Total net sales were $693.5 million in January, down from $1.17 billion in January 2009.

Last month’s sales were made up of $3.14 billion in long-term fund sales and $2.44 billion in money market fund net redemptions, IFIC said.

Long-term fund net sales were up from $2.5 billion in December 2009, and net redemptions of $195 million in the January 2009.

Money market sales were down sharply from net sales of almost $1.4 billion in January 2009.

Balanced funds led the sales charts this January, with net sales of $2.27 billion, up from $1.7 billion last month.

Fixed income fund sales totalled $806.5 million, down from $1.35 billion in December 2009.

Equity fund sales were also positive for the first time since May 2009 at $297 million due to strong sales in the natural resources equity fund and Canadian dividend and income equity fund categories.

“With $3.1 billion in long-term fund net sales last month, we’ve started the year on a very positive note and we’ve got a good start to the 2010 RRSP season,” said Pat Dunwoody, IFIC’s vice president, member services and communications.

“Balanced fund sales were the largest contributor to overall sales last month and were driven by strengthening fund-of-fund sales. We also saw equity fund sales move into positive territory for the first time since May 2009 which was another encouraging development.”

RBC led the long-term sales, with almost $800 million worth, but it also continued to see notable redemptions from its money market funds, leaving it with overall net redemptions of almost $500 million.

The overall sales leader in January was Dynamic Funds with $620.6 million in monthly net sales. Fidelity Investments Canada ULC was second at $263 million, followed by Scotia Securities. On the long-term side, RBC led the way, followed by Dynamic and TD Asset Management.

Additionally, IFIC reported that total assets were $584.6 billion in January, down by $10.6 billion or 1.8% from December. Long-term fund assets totalled $532.5 billion, down 1.5% from the previous month, but up 27.1% from January 2009.

IE