Mutual funds had modest net redemptions overall in August, as money market redemptions edged long-term sales.

According to data released Wednesday from the Investment Funds Institute of Canada, overall net redemptions for the month were $83.3 million, which was down from net sales of $152.6 million in July.

Long-term funds enjoyed $606.8 million in net sales during the month, but money market funds had $690 million in net redemptions, putting the overall sales total into the red for the month.

Both long-term net sales and money market net redemptions were down from the prior month. Long-term sales reached $1 billion in July, and money market fund net redemptions were $852.1 million.

IFIC reports that over the past 12 months, long-term fund net sales total $25.6 billion, up from net redemptions of $4.64 billion over the previous 12-month period. This has also been bolstered by a $40.8 billion market gain for long-term funds over the same time frame (which also marks a reversal from the previous 12-month period, when long-term funds suffered a market-driven drop of $56.2 billion).

Fixed income funds led the sales in August, IFIC said, with $1.1 billion in net sales, up from $850.9 million in the prior month. Balanced fund net sales were $868.5 million, down from $1.24 billion in July. The weakness on the long-term side was in equity funds, which had net redemptions of $1.37 billion in August, up from $1.04 billion last month.

Mutual fund assets totalled $611.5 billion at the end of August, up $3.7 billion, or 0.6%, from July, IFIC also reported. Assets are up by $16.3 billion, or 2.7%, since the beginning of the year, it added.

“Collectively, investors have seen their account balances increase by $12.7 billion or 2.1% since the start of the year due to market appreciation. During this same period, there have been some sizeable market fluctuations,” said Pat Dunwoody, vice president of member services and communications with IFIC.

“We continue to see new investment primarily in balanced funds and fund-of-funds with investors preferring to access equity funds indirectly through these products. Investors purchased close to $3 billion in equity funds through their fund-of-fund holdings during the first eight months of 2010 alone,” she said.

Scotia Asset Management was the top-selling firm in the month, followed by Dynamic Mutual Funds. RBC led the long-term sales, but its total was more than offset by money market redemptions. Dynamic was also second in long-term sales, and TD Asset Management ranked third.

IE