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Mutual Fund News

Mutual funds notch third month of net sales

FUNDS REPORTER

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Canadian investors stashed an estimated $420-million into mutual funds in March as global stock markets rallied, but that amount was a sharp decline from a year ago.

While net inflows paled compared with $2.5-billion a year ago and $1.7-billion in February, it was the third consecutive month of net sales, according to preliminary figures released yesterday by the Investment Funds Institute of Canada (IFIC).

All net new cash continued to flow into money market funds, which typically offer safe but puny returns. There were net redemptions of about $620-million in long-term stock and bond funds, which are more profitable for the industry.

"People are still waiting on the sidelines," said Dennis Yanchus, IFIC's manager of statistics.

"When the economy is in a downturn, people tend not to look at long-term investing," he said in an interview. "They are holding on to more money or paying down debt."

Some new cash went into registered retirement savings plans because of the March 2 deadline, while last month's market rallies probably led some people to "warm up" to the idea of investing in funds again, said Peter Loach, an independent fund analyst.

Last month, the S&P/TSX composite index jumped 7.4 per cent, reducing the loss for the first quarter to 0.5 per cent. South of the border, the S&P 500 index gained 8.5 per cent, lowering the loss for the three months to 10.2 per cent.

"It creates more confidence when you see the bank stocks rally and the TSX over 9,000 [points]," Mr. Loach said. "The TSX is a far cry from 15,000, but certainly better than 7,500."

IFIC's March net sales estimate does not include numbers from CI Financial Corp., which is not a member of the industry group. CI reported net sales of $59-million for March, but that number may also include segregated funds.

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How the top 12 fund companies fared in March 2009
$-millions
TotalTotalTotalTotal
Net Assets ofNet Sales ofNet Sales ofNet Sales of
MutualMutualLong-termMoney Mkt
Fund CompanyFunds FundsMut. Funds Mut. Funds
RBC$94,361$974-$6$980
IGM Financial Inc. $81,673-$112-$229$117
CI Financial Corp.*$49,531$59$73$14
TD Asset Mgt. $46,189-$168-$25-$143
CIBC Asset Mgt. $40,929-$155$15-$170
Fidelity Inv. Cda ULC$33,562$140$119$21
BMO $28,839-$12-$72$60
Invesco Trimark Ltd.$26,263-$263-$280$17
AGF Mgt. Ltd.$19,106-$36-$33-$3
Franklin Templeton Inv. $17,374-$236-$253$17
Dynamic Mutual Fds $17,003$82$70$12
Scotia Securities Inc. $16,474$155$7$148
*CI Financial Corp. is not a member of the Investment Funds Institute of Canada. Its figures include mutual and segregated funds.
SOURCE: INVESTMENT FUNDS INSTITUTE OF CANADA AND COMPANIES

© 2007 The Globe and Mail. All rights reserved.

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