Mutual fund net sales topped the $1 billion mark in December, but that wasn’t enough to bail out a weak 2003.
The Investment Funds Institute of Canada reported that December net sales, excluding re-invested distributions of $1.8 billion, totaled $1.1 billion. Net sales for all funds including re-invested distributions were $2.9 billion.
However, for the full year, the industry saw $606.6 million in net redemptions. The weakness was all due to money market funds, which suffered $5.9 billion in net redemptions for the year, whereas long-term funds generated $5.3 billion in net sales for the full year.
“Net sales for December were the highest in the industry since March 2002,” noted Tom Hockin, IFIC president and CEO. “Sales for the last six months of 2003 garnered over $2.3 billion. This is the eighth consecutive month of positive sales in long-term funds. Sales in these funds have consistently risen over this period with May 2003 sales of $169 million to $1.3 billion at the end of December.”
In December, the strength continued to come from income funds, with $663 million of net sales for bond funds and $602 million for dividend funds. Another $273 million went into balanced funds and $84.3 million was deposited to U.S. equity funds. But, Canadian equity and foreign equity funds saw redemptions of $197 million and $203 million, respectively.
These trends were reflected in the full year, with $4.1 billion of net sales into dividend funds and $4.3 billion into bond funds. The Canadian and foreign equity funds suffered $4.8 billion in combined net redemptions.
Total assets under management increased in December to $438.9 billion, up 3.6% from $423.6 billion in November. Among the leading firms, stronger than average gains were evident for CI and Franklin Templeton. Guardian, Brandes, McLean Budden and Acuity also had very strong asset gains. AIC, PH&N, National Bank and HSBC were all weak.
Assets are up 12.1% from last December’s figure of $391.3 billion. “Strength in the financial markets throughout 2003 has propelled the industry’s assets to $439 billion, the second highest figure ever for the industry. In 2003, long-term funds increased 16.1% or $53.4 billion from the previous year, the highest annual gain since 1999,” said Hockin.
IFIC also reported the total number of member unitholder accounts at 51.1 million, a 3.8% decrease over one year ago.
Fund sales top $1 billion in December
Not enough to save 2003; net redemptions for year were $606.6 million
- By: James Langton
- January 15, 2004 January 15, 2004
- 11:00