Mutual funds recorded just $411 million in net sales during May, the Investment Funds Institute of Canada said today.

That’s down 62% compared to the $1.09 billion in net new money that flowed into funds in the same month a year earlier.

Stock markets in Canada and around the world were hit by sell-offs last month.

Net sales were exceeded by reinvested distributions of $574.3 million. Net sales for all funds, including reinvested distributions, stood at $985 million.

Foreign equity funds were one of the leading sellers with $338 million in May net sales. IFIC noted that foreign equity sales for the first five months of this year now stand at $2.3 billion, representing 20.4% of total sales in the industry.

“Investors are making use of one of the major benefit of mutual funds – the ability to diversify – in this case geographically,” said Joanne De Laurentiis, president & CEO of IFIC.

Canadian income balanced funds were also very strong, with $342 million in net sales. Canadian dividend funds recorded almost $265 million in net sales. Canadian balanced funds also stepped up with $210 million in sales.

There were heavy redemptions however in the Canadian equity category, $365.5 million worth. Money market funds also saw heavy redemptions in the month.

Assets dropped about 2.7%, or $16.3 billion, in May as markets went south. All of the leading fund firms fell victim to the carnage. Among the top 25 firms, Acuity Funds was the only one to record an asset gain in the month, up just 0.4%.

Some of the bank-owned firms held up better than most, with RBC Asset Management seeing assets decline just 1.8%, TD Asset Management slid 2.1%, and BMO Investments was down just 2.0%.

Larger than average asset dips were felt by AIM Trimark, 4.8%, Fidelity Investments dropped 3.7%, AGF was down 4.0% and Franklin Templeton lost 3.8%. AIC saw a 6.0% drop and Altamira saw a 4.5% decline.