Mutual funds suffered $1.5 billion in net redemptions for July according to the latest data from the Investment Funds Institute of Canada.

IFIC reported that the industry had total net redemptions of $1.52 billion in July, compared with $834.7 million in net redemptions in June, and $550.2 million in net sales for July 2008. However, the negative result was entirely due to flows out of short-term funds ($3.3 billion worth).

Long-term funds managed almost $1.8 billion in positive net sales, down slightly from the previous month, but up from $747 million in net redemptions for the same month last year. Also, fund-of-fund sales were up to $747 million in July, from $622 million in June, and $413 million last July.

IFIC said that the domestic fixed income fund asset class led the way in sales in July at $793.3 million, followed by the domestic balanced class ($616.1 million), global balanced ($504.1 million), and the global & high yield fixed income category ($310.7 million).

Moreover, total assets rose to $556.7 billion at the end of July, up $9.6 billion or 1.8% from June. IFIC noted that long-term fund assets have increased by a total of $86.9 billion or 21.6% since the end of February.

“We continued to see investors moving back into long-term funds in July. Since the end of February, Canadians have purchased a total of $5.9 billion in long-term funds and at the same time, an estimated $81 billion has been created due to improved market performance,” said Pat Dunwoody, vice president of member services and communications with IFIC.

“This serves as a reminder that although the focus is often on net sales, it is asset growth due to market appreciation or lack of it that determines the strength of the industry and aligns our interest with the investors we serve.” she said.

Looking at the sales by company, RBC drove much of the action in July, both leading the long-term sales charts ($516 million) and the short-term redemptions ($2.26 billion). TD Asset Management, CIBC Asset Management and Dynamic Funds all had more than $200 million in long-term sales for July. The overall sales leader for the month was Scotia Securities, which had $195 million in long-term net sales and $143 million in short-term net sales.

IE