INVESTMENT FUNDS REPORTER
Canadian investors yanked an estimated $1.5-billion out of mutual funds in April amid concerns that Greece's debt crisis could spill over into other euro zone countries and trigger further havoc in global stock markets.
It was the first time the Canadian industry has been in net redemptions since last October when the industry was $291-million in the red, and contrasts with net sales of $370.3-million in the same month a year ago, according to preliminary figures released Tuesday by the Investment Funds Institute of Canada (IFIC).
"We tend to see a drop after RRSP season," but there could be investor jitters over Greece's woes especially with the last downturn still fresh in their minds, Dennis Yanchus, IFIC's manger of statistics, said in an interview. "We noticed a bit more volatility towards the end of the month...in equity markets, particularly in Europe."
While there was continued net outflows in money market funds, it was the sharp drop in net sales of long-term funds that really put the industry into negative territory, Mr. Yanchus indicated. "It was positive at just over $400-million in April compared with just under $4-billion in March."
Frank Hracs, chief economist at Toronto-based Credo Consulting, said the unusually high net redemptions by one of the industry leaders [Fidelity Investments Canada] contributed to the red ink, but he also agreed that investor nervousness could have taken hold. "During the last week of April, this Greek debt problem was starting to hit the fan and that could have taken some of the edge off of sales."
How the funds fared in April
|Total Net Assets of Mutual Funds($-mil)||Total Net Salesof Mutual Funds($-mil)||Total Net Salesof Long-Term Mutual Funds($-mil)||Total Net Sales of Money Market Mutual Funds($-mil)|
|IGM Financial Inc.||$102,396||-$239||-$145||-$94|
|CI Financial Corp.*||$64,824||$43||$23||$20|
|TD Asset Management||$56,953||-$235||$125||-$360|
|CIBC Asset Management||$46,588||-$30||$99||-$129|
|Fidelity Invest. Cda ULC||$45,902||-$425||-$401||-$24|
|BMO Financial Group||$35,929||-$272||$33||-$305|
|Invesco Trimark Ltd.||$28,181||-$334||-$315||-$19|
|AGF Investments Inc.||$22,423||-$172||-$158||-$14|
|Dynamic Mutual Funds||$27,774||$250||$266||-$16|
|Scotia Securities Inc.||$22,877||$47||$206||-$159|
|Franklin Templeton Investments||$20,640||-$112||-$49||-$63|
|*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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