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Mutual Fund News

New cash flows to funds, breaking losing streak


Canadian investors plowed just over $400-million in net new money into mutual funds in November as stock markets resumed their climb, and the industry began marketing for the RRSP season.

This new trend ends five consecutive months of net outflows for the Canadian fund industry, according to preliminary estimates from the Investment Funds Institute of Canada (IFIC).

There was about $3-billion in net sales of long-term stock and bond funds, and $2.6-billion in net outflows of short-term money market funds.

"Long-term fund demand posted the best November in over a decade, and has a massive head of steam entering RRSP season," said Frank Hracs, chief economist at Toronto-based Credo Consulting, which focuses on the financial services industry.

Investors stashed more cash in funds last month as the S&P/TSX composite index rose 4.9 per cent, and the S&P 500 surged 5.7 per cent. It's in sharp contrast with November last year when the industry suffered $977.2-million in net outflows amid a global stock market meltdown.

"People are moving off the side lines," said Dennis Yanchus, IFIC's manager of statistics. "When you see reduced volatility and markets coming back, that is certainly making people feel more comfortable."

When IFIC releases final figures on Dec. 15, he expects sales will show that investors piled into balanced funds and fund of funds instead of pure stock funds.

The IFIC figures do not include data from CI Financial Corp., which no longer reports sales to the industry group. Fidelity Investments Canada LLC was the leader in net sales last month, pulling in $327-million. Dynamic Mutual Funds attracted $322-million.

RBC, which includes RBC Asset Management Inc. and Phillips Hager & North Ltd., suffered from $501-million in net redemptions. That was all in money market funds yielding little returns.


How the top 12 fund companies fared in November

Total Net Total Net
Total Total Sales of Sales of
Net Net Long-term Mny Mkt
Assets Sales Funds Funds
Fund Company Millions
Fidelity Investments Canada$42,537$327$367-$40
Dynamic Mutual Funds $23,845$322$344-$22
TD Asset Management $54,565$241$620-$379
CI Financial Corp.*$61,460$116$131-$15
Scotia Securities Inc. $20,918$111$273-$162
CIBC Asset Management $44,861$107$357-$250
BMO Financial Group$34,530$52$319-$267
IGM Financial Inc. $98,155$34$101-$67
Franklin Templeton$20,468-$51-$32-$19
AGF Investments Inc.$22,746-$95-$82-$13
Invesco Trimark Ltd.$29,167-$359-$333-$26
*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, companies

© 2007 The Globe and Mail. All rights reserved.

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