The mutual fund industry suffered another month of negative net sales in April, although some of the underlying asset trends were more positive.

The latest numbers from the Investment Funds Institute of Canada, show that April net sales, excluding re-invested distributions of $250 million, totaled minus $1.6 billion. Net sales for all funds including re-invested distributions were minus $1.4 billion.

The biggest chunk of the negative net sales came from money market funds, as investors sought higher returns in other fixed-income products. More than $1.3 billion of the net redemptions came from money market funds. Another $318.9 million of net redemptions came from the long-term funds.

Foreign equity funds were the weakest asset class, generating $279.4 million in net redemptions. Canadian equity funds suffered another $142.8 million in net redemptions, and the balanced funds had $101.5 million in net redemptions. U.S. equity funds also saw $67.3 million in redemptions.

However, bond funds enjoyed $156.5 million in positive net sales. And, the dividend funds saw $113.5 million in net sales for the month.

“Appreciation in stock markets added about $11 billion to mutual fund assets under management in Canada, bringing the total to $380.2 billion by the end of April. There have been minimal net redemptions (barely $54 million) in long-term funds in March and April,” said Tom Hockin, IFIC’s president and CEO. “Ninety-seven per cent of net redemptions over the past two months were in money market funds. For April alone, four out of five redemptions were in money market funds. History shows investors move in and out of money market funds, GICs and treasury bills depending on interest rates.”

Total assets under management increased in April to $380.2 billion, up 2.9% from $369.4 billion in March. Assets are down 12.9% from last April’s figure of $436.3 billion.

Some of the biggest beneficiaries of the asset gains are the large independent firms, such as AIM Trimark, AGF and Franklin Templeton. The bank-owned firms, which have bigger money market fund businesses, are lagging.

IFIC also reported the total number of Member unitholder accounts at 51.8 million, a 3.2% decrease over one year ago.

http://www.ific.ca