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Mutual Fund News

Mutual funds sales nearly double in February powered by long-term units

INVESTMENT FUNDS REPORTER

Canadian investors plowed an estimated $3-billion into mutual funds in February as North American markets rebounded during the key month of registered retirement savings plan (RRSP) season.

Net sales of funds nearly doubled from $1.7-billion the same month last year, according to preliminary figures from the Investment Funds Institute of Canada.

"People are getting back into the market," said Dennis Yanchus, IFIC's manager of statistics. "Investor confidence is much better than last year."

While North American markets were in meltdown mode a year ago, it was a different story in February. The S&P/TSX composite index climbed 4.8 per cent last month, while the S&P 500 rose 2.9 per cent.

But the high note for the Canadian fund industry was that net sales of the more profitable long-term funds, which invest in stocks and bonds, shot up to about $5-billion last month, versus $259-million a year ago, after significant money market redemptions.

And long-term net sales for January and February surged to about $8.1-billion, compared with $64-million in the same two-month period a year ago.

Investors are not just shifting cash from money market to long-term funds, but are "putting new money into mutual funds," Mr. Yanchus said. "This is the best RRSP season [for long-term funds] since 2007 when it was $11.4-billion."

Among publicly traded fund companies, DundeeWealth Inc.'s Dynamic Funds took in $506-million in February. "What a difference a year makes," said Jordy Chilcott, executive vice-president of Dynamic Funds. "Investor confidence is on the rise." Dynamic's three top sellers were all balanced funds with Dynamic Strategic Yield at the top of the list, he said.

CI Financial Corp., which is not a member of IFIC, reported $346-million in net sales last month. IGM Financial Inc., which includes Investors Group and Mackenzie Financial, took in $281-million.

However, not everyone benefited. AGF Management Ltd.'s net redemptions increased to $114.7-million in February from $41.5-million a year ago. The departure in January of award-winning manager Christine Hughes didn't help sales.

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Canadians dive into mutual funds

How the top 12 fund companies fared in February 2010
Fund companyTotal Net Assets of Mutual Funds $-millionsTotal Net Sales of Mutual Funds $-millionsTotal Net Sales of Long-Term Mutual Funds $-millionsTotal Net Sales of Money Market Mutual Funds $-millions
Fidelity Investments Canada ULC$44,229$552$580-$28
Dynamic Mutual Funds $25,730$506$520-$14
TD Asset Management $55,713$472$838-$366
CI Financial Corp.*$62,483$346$328$18
Scotia Securities Inc. $21,981$304$399-$95
BMO Financial Group$35,474$300$362-$62
IGM Financial Inc. $99,479$281$451-$170
CIBC Asset Management $45,644$194$346-$152
RBC$101,239$163$906-$743
AGF Investments Inc.$22,076-$115-$96-$18
Franklin Templeton Investments$20,420-$220-$61-$159
Invesco Trimark Ltd.$28,473-$295-$278-$17
*CI Financial Corp. is not a member of the Investment Funds Institute of Canada. Its figures include mutual and segregated funds.
Source: IFIC, companies

© 2007 The Globe and Mail. All rights reserved.

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