RBC Asset Management Inc. reported an impressive $1-billion in mutual fund sales in February, capturing about 20 per cent of the new dollars invested by Canadians in registered retirement saving plan season's biggest month.
"It's been a great, great February," said Brenda Vince, president of RBC Asset Management, a division of Royal Bank of Canada.
The Investment Funds Institute of Canada yesterday estimated February net sales of between $4.7-billion and $5.3-billion, compared with close to $5-billion reported a year earlier. Last month's tally is a significant improvement on January's disappointing $660.7-million in net sales and represents the recovering industry's fourth consecutive month of positive sales.
The Big Six banks and their subsidiaries have dominated RRSP season this year, gobbling up close to $4-billion of the estimated $5.7-billion in net sales in January and February. RBC accounted for about $1.5-billion or 25 per cent of net sales during the two-month period.
Last month, Toronto-Dominion Bank's TD Asset Management was in second place behind RBC, reporting $740-million in net sales. Bank of Montreal's BMO Funds rounded out the top three, reporting $530-million in net sales.
A competitive RBC product line, including popular dividend, income and international funds, and a strong distribution force are behind the strong numbers, Ms. Vince said. RBC has about 1,500 financial planners across its branch network and another 500 mobile planners in the field. In addition, the company continues to strengthen its ties with independent financial advisers.
"It's a pretty powerful machine," said fund marketing consultant Dan Richards.
But IFIC's sales tally tells only part of the story, said Peter Loach, analyst at BMO Nesbitt Burns.
He estimates alternative investments, closed-end funds and linked notes racked up about $2-billion in February sales, investment that will flow into funds in March. In addition, financial advisers typically park a healthy chunk of client's RRSP contributions into money market funds in February and make fund-specific investments this month, he said.
"The industry is completely healthy," said Mr. Loach, predicting March's net sales may be close to February's estimated tally of about $5-billion.
February's losers included AIC Ltd. and Fidelity Investments Canada Ltd., which reported net redemptions of $399-million and $67-million, respectively. The results indicate the investing public has yet to embrace the turnaround strategies of the two companies. Fidelity has reduced management fees across its funds while AIC has overhauled its sales team and hired new fund managers to improve returns.
AGF Management Ltd. does not supply IFIC with preliminary sales data. The Toronto firm was widely expected to report February net redemptions late yesterday.
© 2007 The Globe and Mail. All rights reserved.
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