Mutual funds recorded $462.6 million in net redemptions for August, as investors abandoned money market funds, but continued buying long-term funds.
The Investment Funds Institute of Canada reported that funds were in overall net redemptions during the month, with $2.3 billion in money market redemptions and $1.8 billion in long-term fund sales. In the year-to-date, long-term sales are now $7.8 billion, up from $1.6 billion in redemptions at this point last year, IFIC noted.
While money market funds recorded more than $2 billion in net redemptions, this represents an improvement from July when the industry had $3.3 billion in redemptions. IFIC said that the flows out of money market funds are still being driven primarily by investor movement back into long-term fund categories as well as movement into alternative fixed-income investments.
On the long-term side, balanced funds led the way in net sales in August at $1.24 billion, IFIC reported. Bond funds ranked second with sales of $1.1 billion in August. Equity funds were in net redemptions with $531.6 million worth in August, which was up from the previous month (when the industry saw $395.8 million in redemptions).
Pat Dunwoody, vice president of member services and communications with IFIC, says, “Investors continued to diversify in August investing $1.2 billion in balanced funds, $1.1 billion in bond funds and $852 million in fund-of-fund products.”
RBC drove the sales trends, as it recorded almost $1.6 billion in net redemptions from its money market funds, but also led the way in long-term net sales, with $470.4 million worth.
Scotia Securities was the leader in overall net sales, with $338.3 million in overall sales, including $211.3 million in long-term net sales.
Looking solely at long-term sales, RBC was followed by TD Asset Management’s $353.1 million, and Fidelity Investments Canada ULC with $286.8 million. Dynamic Funds was the only other firm with at least $200 million in long-term net sales.
Industry assets finished the month at $567.6 billion, up from $556.7 billion in July, but down from $634.8 billion at this point last year. Long-term fund assets totaled $503 billion, up from $489.9 billion in July. Over the last six months, long-term fund assets have increased by $100 million or 25%, IFIC said.
IE
Flows out of money market funds ease in August: IFIC
Long-term funds gather almost $2 billion in net sales
- By: James Langton
- September 15, 2009 September 15, 2009
- 13:14