Investors showed their first signs of running away from long-term funds in July, according to statistics compiled by the Investment Funds Institute of Canada.

Net sales, excluding re-invested distributions of $221.1 million, totalled minus $1.1 billion for the month. The big redemptions did not come from money market funds for a change. While short-term funds saw about $296 million in net redemptions, the lion’s share — $816.7 million — came from long-term funds.

Foreign equity funds took the hardest hit, with $441.8 million in net redemptions. Another $260.3 million came out of Canadian equity funds. Bond funds lost $123 million, and balanced funds dropped $111.1 million. Mortgage funds and foreign bond funds had more than $81.7 million in combined net redemptions.

Only three categories saw positive net sales in the month. Dividend funds recorded $116 million in net sales for the month. U.S. equity funds racked up $76.4 million in positive net sales. Real estate funds also saw small positive net sales.

“Net redemptions of $1.1 billion in July remain consistent with the previous month,” said Tom Hockin, IFIC’s president and CEO, in a statement. “Despite poor equity markets, sales of long-term funds for the first seven months of 2002 still remain up 5.8% compared to the same period in 2001.”

Assets are down 2.6% from last July’s figure of $411.1 billion, and down 3.9% from the prior month. On an asset basis, some of the weakest performances came in big independent firms such as AGF, Fidelity, and Franklin Templeton. None of the top 30 firms reported asset gains in the month. Smaller than average losses were enjoyed by firms such as CIBC, PH&N, National Bank and Elliott & Page.