As expected, June was a very tough month for mutual fund sales. According to the latest numbers from the Investment Funds Institute of Canada, net redemption’s totaled $1.1 billion for the month.

Most of the money flowed out of money market funds, as investors sought higher yields elsewhere. More than $1.2 billion in net redemptions came from money market funds. Long-term funds posted a modest $108 million in positive net sales for the month. Net redemptions for all funds including re-invested distributions were $570 million.

“Year-to-date sales of long-term funds are up 21.5% from the same time one-year ago,” says Tom Hockin, IFIC’s president and CEO. “Clearly the majority of the net redemptions are due to interest rate factors and not the equity markets.”

The source of strength in the long-term funds is the dividend funds, which saw $176 million in net sales in the month. U.S. equities also enjoyed $156 million in positive net sales for June. However, Canadian equity funds saw net redemptions of $253.8 million. there were also modest redemptions in foreign equity funds, and some notable redemptions from foreign bond funds.

Total assets under management decreased in June to $416.6 billion, down 3.9% from $433.6 billion in May. Assets are up 1.2% from last June’s figure of $411.7 billion. Some of the bigger losers, by assets, include the banks and big fund firms such as AGF, Fidelity, Templeton, CI, AIC and AIM. There were a few bright spots, with modest asset slides evident at smaller players such as PH&N, Elliott & Page, Mawer and Saxon.

IFIC also reported the total number of member unit-holder accounts at 52.9 million; a 2.0% increase over one year ago.