Mutual fund net sales reached just under $4 billion for January, up substantially from just $1.5 billion in the same month last year, the Investment Funds Institute of Canada reported today.

Long-term net sales exceeded $4 billion, but modest redemptions from the money market funds kept the overall total from beating the $4 billion mark. Money market redemptions were much heavier last year however, at almost $1.2 billion.

Balanced funds led the way in January, generating $2.8 billion in net sales, split almost evenly between domestic and foreign funds. Equity funds added another $1.2 billion in sales, with almost all of the flows going into foreign funds. Almost $1.4 billion was redeemed from Canadian equity funds, but $2 billion went into international funds, and $462 million flowed into US funds.

The banks continue to dominate net sales, with RBC Asset Management recording $807 million in sales, along with TD Asset Management with $549 million in sales, BMO Funds had more than $300 million in net sales, and Scotia and CIBC both generated significant positive net sales too.

Dynamic Mutual Funds took second place in the month with net sales of almost $600 million, leading the independents. AGF was a distant second among the independents, recording $320 million in sales, and Brandes had $240 million in sales. Along with IGM Financial and Desjardins, these were the only firms with more than $100 million in sales.

AIM Trimark returned to positive net sales in the month, but Fidelity had $91 million in redemptions, and AIC, Guardian, Altamira and Acuity all had net redemptions too.

IFIC said that the strong January sales showing by mutual fund-of-funds and fund wrap programs highlights an ongoing industry trend — a shift towards investment solutions that combine the benefits of organized and monitored asset class diversification, client risk-profiling and regular rebalancing activity.

Joanne De Laurentiis, president & CEO of IFIC, said, “The mutual fund industry built on the sales momentum set in November and December, with an increasing number of investors purchasing fund-of-fund and fund wrap products.”

“In total, about $93 billion of mutual funds are in these investment solutions, representing 14% of all industry assets,” she added.

Long-term mutual fund assets stood at $627 billion in January, increasing more than 15% on a year-over-year basis. In January alone, long-term assets expanded by 2%. Global and International Equity funds grew 3.9% and more than 29% year-over-year, making them the fastest growing asset class in the past 12 months, IFIC noted.