Investment fund sales started the fourth quarter strong, with both mutual fund and ETF sales rising in October. The two asset categories accounted for the bulk of the industry’s asset gains, according to new data from the Investment Funds Institute of Canada (IFIC).
Overall mutual fund sales came in at $3.6 billion in October, up from just $789 million in the previous month, led by stronger sales in the bond and specialty fund categories, and slowing redemptions in the other major categories.
Monthly net sales of bond funds rose to $3.1 billion, up from $2.3 billion in September. And, specialty funds recorded $679 million in monthly net sales, up from $396 million the previous month.
IFIC reported that the bulk of the bond fund net sales came in global and high-yield fixed income funds.
“In Canadian fixed income investments, approximately half were short-term bond funds,” it added.
While the equity and balanced categories were both still in net redemptions in October, the negative flows eased during the month.
Equity mutual funds posted just $29 million worth of net redemptions, down from $631 million in September. Balanced funds recorded $224 million in net redemptions for October, down significantly from $1.2 billion in September.
October’s stronger sales pushed year-to-date mutual fund net sales further into positive territory too. IFIC reported that net sales through the first 10 months of the year reached $8.2 billion, compared with $42.4 billion in net redemptions for the same period last year.
The stronger monthly net sales also drove industry assets higher, as total assets under management rose $3.3 billion in October to $2.19 trillion.
At the same time, ETF net sales continued to outpace mutual funds. Indeed, total net sales for ETFs last month came in at $8.2 billion, up from $5.5 billion in September. October’s total alone matched the year-to-date total net sales for mutual funds.
Equity ETFs led the way, with $4.4 billion worth of monthly net sales in that category, up from $2.7 billion in the previous month.
Bond funds also reported stronger net sales, with the monthly tally jumping from $1.5 billion in September to $2.7 billion in October.
For the year-to-date, ETF net sales now sit at $55.3 billion, up from $28.6 billion in the same period a year ago.
ETF assets also increased in October, rising $8.3 billion in the month to $486.8 billion.
“As with mutual funds, ETF asset growth was driven primarily by new sales,” IFIC said.