Mutual fund net sales were weak in January according to preliminary estimates from the Investment Funds Institute of Canada.

IFIC reported today that, based on a sample of preliminary data from some of its members, net sales of mutual funds for the month of January are estimated to be between net redemptions of $28 million and positive net sales of $472 million.

Along with the weak sales, IFIC also estimates that net assets of the mutual fund industry at the end of January will be in the range of $668.5 billion to $673.5 billion, down approximately 3.6% from last month’s total of $697.3 billion.

“Strong volatility in capital markets across the world have lead assets in the mutual industry to decline by 3.6% for the month of January,” said Pat Dunwoody, vice president of Member Services and Communications with IFIC.

The sales the industry did see in January were concentrated in the money market funds, mostly by the banks. RBC Asset Management led the way with $1.7 billion in monthly net sales, although all of this came in money market funds. RBC had $199 million in long-term redemptions.

Desjardins was a distant second place, with $605 million in monthly net sales. TD Asset Management ranked third with $394 million in net sales. Dynamic Mutual Funds and CIBC Asset Management were the only firms with more than $100 million in net sales.

Most of the top firms were in net redemptions on the long-term side. Desjardins led the way with $599 million in net sales, far ahead of second place Dynamic, which had $81 million in long-term sales.

The heaviest redemptions were at AIM Trimark, which had $744 million worth overall, and $818 million in long-term redemptions. IGM Financial, Fidelity Investments and Franklin Templeton were also in overall net redemptions.

“An estimated $4.5 billion went into money market funds in January, consistent with the trend that was seen in the December 2007 figures,” Dunwoody noted. “There is clear indication that investors are waiting on the sidelines, looking for some positive signs that capital markets will turn around before they place new investments into long-term funds.”