Mutual funds recorded another month of net redemptions in October, as money market funds saw slightly more outflows than the inflows managed by long-term funds.

The Investment Funds Institute of Canada reported that monthly net redemptions were $291.4 million in October, comprised of $2.24 billion in long-term sales and $2.54 billion in money market redemptions.

IFIC points out that long-term sales have been steadily increasing each month since July and long-term fund sales year-to-date are $12 billion this year, compared to $9.26 billion in net redemptions at the same point last year.

Balanced funds led the net sales in October at $1.62 billion, up from $1.32 billion in September, and $2.57 billion in net redemptions in the same month last year. Bond funds saw net sales of $1.14 billion in the month, down from $1.66 billion in the previous month. IFIC notes that equity fund net redemptions also slowed substantially, coming in at $512.2 million in October, versus $2.4 billion in October 2008.

RBC continues to dominate the sales trends, generating almost $1.4 billion in money market net redemptions in October, against $477 million in long-term net sales. Overall, the firm had $884 million in net redemptions.

Fidelity Investments Canada ULC was the overall sales leader at $352.5 million, with $406.9 million in long-term sales and just $54.4 million in money market redemptions.

TD Asset Management was the top selling long-term firm in the month with $623.7 million in net sales (followed by RBC and Fidelity).

Total assets were $573 billion at the end of October, down 1.7% from the previous month. “Several equity markets, including the major North American exchanges were down in October which led to a month-over-month decline in total assets under management,” IFIC said. Nevertheless, assets are still up 13% from the start of the year and 9.7% from the previous year.

“Year-to-date, mutual fund investors have gained exposure to this recovery predominantly through balanced fund rather than equity fund purchases and we continue to see the bulk of long-term fund purchases going to the fixed income side of the business. To the extent that this reflects a determination among investors to better diversify their portfolios, then this is a good thing,” said Pat Dunwoody, IFIC’s vice president, member services and communications.

IE