February was its best month for net sales in the mutual fund industry in four years according to the Investment Funds Institute of Canada.

IFIC says investors poured $5 billion in net new money into funds last month, matching a preliminary estimate released March 2.

“Sales for the first two months of 2004 totalled $6.9 billion, compared with only $16 million in the same period, one year ago,” IFIC chief executive Tom Hockin said in a news release.

“Over 99% of February’s sales were into long-term funds, with balanced, bond, and dividend and income categories posting the highest sales.” he said.

Investors continue to show a strong preference for income-flavoured asset classes, putting more than $1.2 billion into dividend and income funds, and another $1 billion into bond funds. Almost $1.2 billion went into balanced funds.

The pure equity funds had a tougher time garnering sales. But they still saw positive net sales, led by $554 million in Canadian equity funds, followed closely by $518 million in foreign equity funds, and $292 million in U.S. equity funds.

Total fund assets reported by IFIC members reached an all-time high of $466.2 billion by the end of February. Assets are up 24.3% from $375.2 billion in February 2003.

Nine of the 10 biggest fund companies reported positive net sales last month.

In a separate release RBC Asset Management said that February was its best month for sales of long-term funds in six years. RBC had net fund sales of $969 million last month, with much of that strength coming from its dividend and income funds.

Other outsized asset gains were evident at BMO Investments, Dynamic, Guardian, Fiducie Desjardins and Manulife Investments. Brandes continued to enjoy outstanding performance, gaining 22% in the month.

Subpar asset growth was most evident at AIC, which gained just 0.8% in assets during the month. Altamira was also on the weak side. And, many of the big firms marginally lagged the industry average.