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Mutual Fund News

Funds have solid month


Despite last year's poor equity markets, Canadian investors pumped between $2.2-billion and $2.5-billion into mutual funds in January -- the first month in the key RRSP selling season.

That compares with net sales of $2.2-billion that flowed into funds in January of 2001, according to preliminary estimates by the Investment Funds Institute of Canada (IFIC), the industry trade group.

"Those numbers are very encouraging for the health of the industry," Peter Loach, mutual fund analyst for BMO Nesbitt Burns Inc., said yesterday. "I think we are well positioned for a very strong February."

Mr. Loach said the January net sales estimates were "very good numbers," given the tough year for stock markets in 2001, and the recent collapse of energy trader Enron Corp. of Houston,which has shaken the confidence of some investors.

In January, North American stock markets also turned in a lacklustre performance. The Toronto Stock Exchange 300-stock index, including reinvested dividends, slipped 0.4 per cent in January after shedding 13 per cent in 2001.

Mr. Loach said January is not historically stellar for industry net sales. "February is the month we are concerned about -- it will indicate the health of the industry."

Among the bank-owned and all fund companies, Royal Mutual Funds Inc. was the leader with $443-million in net sales. Bill Gunton, vice-president of marketing for Royal Mutual Funds, said that more than 50 per cent of its net sales continued to flow into safe-haven money market funds.

CIBC Securities Inc. attracted $315-million in net sales; Scotia Securities Inc., $274.8-million; BMO Mutual Funds Inc., $96-million and TD Asset Management Inc., $90.1-million.

Among non-bank companies, AIM Funds Management Inc. rose to the top of the heap for the second consecutive month. It took in $229-million in net sales.

Dwayne Dreger, AIM's vice-president of communications, said that the top five selling funds were the Trimark funds, whose value-oriented investment style has been in vogue over the past year. (The company also sells growth-oriented funds under the AIM brand.)

Mr. Dreger said the largest net redemptions came in the firm's two money market funds to the tune of $50-million.

"It certainly seems that folks are starting to withdraw the cash they have on the sidelines and starting to commit it to the market."

Among other companies, AGF Management Ltd. took in $166-million; ClaringtonFunds Inc.,$165-million; Fidelity Investments Canada Ltd., $111-million; AIC Ltd., $76.5 million; Talvest Fund Management Inc., $32.5-million; C.I. Fund Management Inc.,$19-million, Synergy Asset Management Inc., $14-million and Altamira Investment Services Inc., $5.1-million.

Investors Group Inc. took in $100-million but its subsidiary, Mackenzie Financial Corp., posted net redemptions of $101-million.

Other companies suffering from net outflows included StrategicNova Mutual Funds Inc., $38-million; Franklin Templeton Investments Corp., $14-million; Elliott & Page Ltd., $4-million and Dynamic Mutual Funds Ltd., $3-million.

© 2007 The Globe and Mail. All rights reserved.

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