Canadian mutual fund operators got the new year off to a solid start with net sales of almost $1.6 billion in January, nearly 2 1/2 times the year-ago total.

The Investment Funds Institute of Canada said today that net sales excluding reinvested distributions were $1.59 billion, up from $660.7 million in January 2005.

“Interestingly, January foreign equity sales rose to $133 million following 21 straight months of net redemptions,” said Joanne De Laurentiis, IFIC president, in a release.

“It’s taken a bit of time, but Canadians are apparently now taking advantage of the removal of the foreign content limit.”

The mutual fund industry’s total assets under management increased three per cent during January to $587.31 billion, an increase of 17.4% from a year ago.

IFIC said balanced funds remained the biggest-selling segment in January, with net sales of $964.9 million.

WBalanced funds led the way ion January, recording $965 million in net sales.

Dividend & income ranked second, with $766.7 million in sales. Bond funds were third, with $704.8 million in net sales. The foreign equity category was the only other notable category, generating $133.4 million in net sales.

The US equity and Canadian equity funds remain in net redemptions, recording about $55 million and $54.4 million in redemptions, respectively.

Among the larger firms, larger than average asset gains were evident at RBC Asset Management and CI Investments, with assets up 4% and 3.9%, respectively. Fidelity Investments Canada and AGF Management also recorded 3.9% in monthly asset growth. Dynamic Mutual Funds was the real winner, gaining 7.5% for the month.

Among the smaller players, Acuity Funds, Standard Life Mutual Funds and Saxon Funds Management all had strong asset gains.

AIC was the only firm to see assets decline, albeit just 0.3%. Growth was lower than average for AIM Trimark Investments, Mackenzie Financial Corp., PH&N, Scotia Securities and National Bank Mutual Funds.