Canadian long-term fund sales highest since February 2008

Date: Tuesday, June 16, 2009
Author: Hedgeweek.com

Canadian long-term fund sales in May were the highest they have been since February 2008, according to a report by the Investment Funds Institute of Canada.

Total net sales in May were CAD939.2m and were composed of CAD1.93bn in long-term fund sales and CAD992.9m in money market fund net redemptions.

Total assets rose CAD20.1bn (3.8 per cent) in May to end the month at CAD538bn.

Assets under management have increased by CAD60.9bn (12.8 per cent) since February and CAD30.7bn (6.1 per cent) since the start of the year.

Long-term fund sales were focused primarily in domestic fixed income fund categories. Domestic fixed income fund sales were CAD757.2m in May with strong Canadian short term fixed income fund (CAD609.7m) and Canadian fixed income fund sales (CAD140.4m).

Global and high yield fixed income fund sales were CAD409.3m in May which included CAD398.4m in high yield fixed income fund sales and CAD10.9m in global fixed income fund sales.

Domestic balanced fund sales were CAD464.8m in May, up from CAD158m in April. Global balanced fund sales were CAD386m in May, up from CAD218.3m in April.

In the equity fund space, both sector equity fund and domestic equity fund sales were positive in May. Sector equity fund sales were CAD69.8m in May due almost entirely to strong natural resource equity fund sales (CAD135.4m). Domestic equity fund sales were CAD41.9m in May due to Canadian dividend and income equity fund sales (CAD177.2m) and Canadian equity fund sales (CAD56.1m).

Pat Dunwoody, vice president, member services and communications at IFIC, says: "With long-term fund sales last month at their highest level since February 2008 and money market fund redemptions also at a high point, we have the clearest evidence yet that Canadians are moving back into the market.

"Investor sentiment definitely seems much improved by how markets have performed of late.  While Canadians have invested CAD2.2bn in long-term funds over the past three months, close to CAD60bn has been added to their accounts due to improved performance."