Investors shrugged off November's volatile equity markets, snapping up an estimated $2.3-billion in mutual funds, the industry association says.
Net sales are expected to tally between $2.1-billion and $2.5-billion in November, up from $1.3-billion reported in October, the Investment Funds Institute of Canada reported yesterday. If the estimate holds, the figures will mirror November, 2005, results when strong equity markets helped drive $2.3-billion in net sales.
"Given we're coming off a very choppy month, these are very strong numbers," said Peter Loach, fund analyst at BMO Nesbitt Burns Inc. "This illustrates that people are happy with the mutual fund sector . . . it's still the best vehicle out there."
Once again, the mutual fund arms of the big banks dominated the industry. RBC Asset Management Inc. continued its reign as the industry's No. 1 firm, reporting $742-million in net sales last month. In second place was TD Asset Management Inc., reporting $431-million in net sales, while CIBC Asset Management Inc. came in third, with $209-million.
There was little good news, however, for eight companies that saw investment dollars leave. In a separate news release, CI Investments Inc., the fund arm of CI Financial Income Fund, reported net redemptions of $180-million, due largely to the loss of institutional business. Toronto's AIM Funds Management Inc., whose fund brands include AIM and Trimark, reported net redemptions of $117-million. AIC Ltd. lost $57-million in business.
Four firms with significant assets invested in the income trust sector reported redemptions, including Guardian Group of Funds Ltd., down $36-million, and Mavrix Funds Ltd., reporting $12-million in net redemptions.
On Oct. 31, the federal government announced plans to begin taxing income trusts in 2011. The news prompted a November selloff of the asset class, causing the 73-member S&P/TSX capped income trust index to fall about 10 per cent in value.
Some of income trust dollars may have migrated to global funds. Firms with well-regarded international equity funds reported net sales, including AGF Management Ltd., Fidelity Investments Canada Ltd. and Brandes Investment Partners & Co.
The outlook for the important 2007 registered retirement savings plan sales season is upbeat. Citing $803-million in gross November sales, Bill Holland, CI chief executive officer, says RRSP sales may be "a little better" than in 2006. Between January and March this year, the industry's net sales were $10.1-billion, beating 2005's $9.4-billion.
The sales data indicate "tremendous strength" going into RRSP season, said Frank Hracs of industry research firm Canadian Mutual Fund Analyst.
© 2007 The Globe and Mail. All rights reserved.
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