Investment funds were in net redemptions once again in September, as money market funds continue to see redemptions, while long-term funds are picking up solid sales.

The Investment Funds Institute of Canada reports that total net redemptions for the month were $733.9 million, comprised of $2.7 billion in money market redemptions, and $1.97 billion in long-term fund sales. Total net redemptions were up from August ($462.6 million) but were well below the total witnessed last September ($4.23 billion).

Moreover, long-term fund net sales increased from August ($1.8 billion) and from last September (-$1.72 billion). But money market net redemptions also increased, from $2.26 billion in August, and from $2.51 billion last September.

IFIC reports that domestic fixed income funds led the way in net sales in September with total sales of $1.42 billion, up from $838.7 million in August and -$42.7 million in September 2008. The category also boasts the highest net sales in the year-to-date at $5.62 billion compared with net sales of $305 million at this point last year.

Domestic balanced and global balanced funds also had net sales of $683.5 million and $634.5 million, respectively, in September. While global & international equity funds had the highest net redemptions in September among the long-term fund asset classes at $544.7 million.

Total assets increased by 2.7% or $ 15.1 billion in September to end the month at $582.7 billion, IFIC also reports. Long-term fund assets increased by 3.6% or $17.9 billion to $520.9 billion. Long-term fund assets are up by 29.3% since hitting their low point in February .

“September marks the first month since May 2008 that we have seen a year-over-year increase in assets under management, although assets still remain $74 billion below their peak which was also in May,” said Pat Dunwoody, IFIC’s vice president, member services and communications.

“Bond fund sales were also notably stronger in September increasing by almost $600 million from August. Bond funds have captured an average of 12% of market share since 1995 with market share rising higher than 20% at some points. With bond fund market share currently closer to 11%, we are likely to see more inflows into this asset class over the next few months at least,” she said.

By company, RBC continues to dominate the sales trends. It contributed $1.75 billion in money market net redemptions and$542.8 million in long-term net sales. TD Asset Management was the top long-term seller in the month, with $564.2 million in net sales.

But Dynamic Funds was the overall sales leader, with $314 million in monthly net sales, comprised of $220.5 million in long-term net sales and $93.5 million in money market sales. It was closely followed by Fidelity Investments Canada ULC and BMO Financial Group.

IE