The mutual fund industry expects to report close to $4.7-billion in net sales in February -- results that end many months of redemptions for AGF Management Ltd. and Fidelity Investments Canada Ltd.
The Investment Funds Institute of Canada estimates net sales ranged between $4.4-billion and $5-billion last month, down from $5.3-billion reported a year earlier.
The registered retirement savings plan sales season begins in January and last year the month saw disappointing net mutual fund sales of $660.7-million. In contrast, January, 2006, saw investors snap up $1.6-billion in funds.
"The $6.3-billion in net new sales in January and February of this year top the $6-billion in net new sales that took place during the same two months of last year," said Joanne De Laurentiis, IFIC's president and chief executive officer.
Peter Loach, a fund analyst at BMO Nesbitt Burns Inc., described February as a "very strong" month, adding that the industry is already on track to surpass 2005's total net sales of $23.4-billion.
There's a "resurgence" in fund investing, said Brenda Vince, president of RBC Asset Management. The unit of the Royal Bank of Canada reported $1.155-billion in February net sales, making it the month's top-selling firm.
"I think there is some coming back to mutual funds as a product set," Ms. Vince said. Investors are embracing "the value of the mutual fund proposition."
In distant second place was IGM Financial Inc., Winnipeg parent of Investors Group and Mackenzie Financial Corp., reporting $698-million in net sales. The month's third-best performer was TD Asset Management Inc. of Toronto, reporting $683-million in net sales.
Demographics coupled with strong equity markets are driving business, said Linda Knight, vice-president of BMO Mutual Funds. The fund arm of the Bank of Montreal reported February net sales of $513-million.
"The first boomers are turning 60 and it's really hitting home," Ms. Knight said. "This big group of people are in their prime savings years . . . people are coming back to the market."
For the first time in a long time, February saw investors buying funds from AGF and Fidelity, both of Toronto. AGF reported $53-million in net sales while Fidelity was at $256-million. Mediocre fund performance and the fickle financial advice community has led to a steady, four-year decline in assets under management at both firms.
"We have been really working hard on our adviser strategy," said Randy Ambrosie, AGF's executive vice-president of sales and marketing. AGF's February best sellers include fund portfolio programs Elements and Harmony, he said.
A mix of factors, including new products, fund performance, fee cuts and more interest in growth-style investing, are behind Fidelity's return to favour, said spokeswoman Kim Flood.
There was little good news, however, for three companies struggling to stem customer losses. Toronto's AIM Funds Management Inc., whose fund brands include AIM and Trimark, reported net redemptions of $289-million. AIC Ltd. of Burlington, Ont., lost $148-million in business while Altamira Investment Services Inc., a unit of the National Bank of Canada, reported net redemptions of $40-million.
A mighty month
|The top three Company||Net sales (Millions)||Net assets (Billions)|
|RBC Asset Management Inc.||1,155||61, 504|
|IGM Financial Inc.||698||96,311|
|TD Asset Management||683||45,212|
|The bottom three Company||Net sales (Millions)||Net assets (Billions)|
|AIM Trimark Investments||-289||45,102|
|Altamira Investment Services||-40||3,789|
|Note : preliminary estimates|
SOURCE: INVESTMENT FUNDS INSTITUTUE OF CANADA
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