The February fund sales data released by the Investment Funds Institute of Canada is indicative of a respectable RRSP season, according to the Canadian Mutual Fund Analyst (CMFA).

The CMFA seasonal adjustment of the net sales figures posits the net sales at about $1.7 billion, with net sales of about $2 billion for long-term funds and net outflows of about $300 million for short-term funds. “The recovery in long-term fund net sales may largely be complete as the seasonally adjusted numbers are about back to average levels in 1999 and 2000,” CMFA analyst Frank Hracs says.

“What most likely lies ahead is an eventual re-distribution of demand between fund categories, namely, to a better balance between equity funds and other categories,” he predicts, noting that the February data are notable because equity funds drew net new sales of about $1.3 billion after being ignored by individual investors for a long time. “During the past year, equity funds have seen total net redemptions of about $2.3 billion and a further drain of about $1.1 billion from net transfers,” Hracs reports.

He notes that the strongest relative category in February was income trust funds which drew net new sales of $249 million that in seasonally adjusted terms represents an annualized growth rate of about 24% of total assets. Income trust net inflows, during the past year, total about $2.2 billion or about 54% of assets, he says.

Hracs also says that, “it is difficult to envisage any imminent resumption of meaningful net new sales for money market funds.”