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Mutual Fund News

Investors flock to balanced funds

FUNDS REPORTER

Canadian investors plowed the most money into balanced funds in November, but yanked cash from equity funds despite rising markets.

Balanced funds led the way with net sales at nearly $2-billion, while net outflows of equity funds totalled $516.3-million, according to figures released yesterday by the Investment Funds Institute of Canada (IFIC).

The popularity of balanced funds stems from the "ramping up of fund of funds sales," Dennis Yanchus, IFIC's manager of statistics, said in an interview. "They give a full portfolio, diversification and one-line reporting. It's nice and simple."

Net sales of funds of funds - dubbed one-stop shopping because they include equity and bond investments - totalled $1.5-billion in November. That compares with net outflows of $314.3-million a year ago during the market meltdown.

Unlike holding a portfolio of standalone funds, any rebalancing in a fund of funds is done by the manager instead of the investor or adviser, Mr. Yanchus said.

Last month, the Canadian fund industry posted net sales of $438.8-million. That ended five consecutive months of net outflows led by money-market funds with puny returns.

Assets under management rose to $586.8-billion by the end of November from $573-billion in October.

While there was a pullback in stock markets in October, they resumed their climb last month. The S&P/TSX composite index rose 4.9 per cent.

***

November mutual fund net sales

Net Sales ($ Millions)
Broad Asset Classes Nov 2009 Oct 2009 Nov 2008 YTD
Equity Funds-516.3-512.2-901.8-5,346.6
Balanced Funds1,965.61,619.0-1,047.49,471.0
Bond Funds1,455.51,140.6-390.711,258.1
Specialty Funds44.7-3.3-15.7-430.7
Long-Term Funds2,949.52,244.1-2,355.714,951.8
Short-Term Funds-2,510.7-2,535.51,378.5-13,683.8
Total Industry 438.8-291.4-977.21,268.0
Source: Investment Funds Institute of Canada

© 2007 The Globe and Mail. All rights reserved.

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