Improved mutual fund sales helped push profits for Investors Group up 23.5% in the first-quarter profits, the company reported Friday.

The Winnipeg-based mutual fund giant, said its net income for the three-month period ended March 31 was $147.9 million (56¢ a share), up from $119.7 million (45¢).

Gross revenues for the first three months of 2004 were $520.4 million vs $454.9 million last year, a gain of 14.4%. Operating expenses increased, however, 12% to $299.3 million.

As of March 31, IG had mutual fund assets under management and administration of $78.1 billion vs $64.4 billion a year ago, a 21% increase

“Higher mutual fund assets contributed to strong earnings growth, while improving investor confidence resulted in much stronger mutual fund sales,” CEO Jeffrey Orr said in a release.

Fund sales for the three-month period were $1.6 billion vs $1.2 billion in the same period of 2003, and net sales were $386 million, compared with net redemptions of $81 million last year. The redemption rate at March 31, excluding money market funds, was 10.2% compared to 10.9% a year ago. The redemption rate for all other members of the Investment Funds Institute of Canada at March 31, 2004 was 14.5%.

The Mackenzie Financial subsidiary reported gross mutual fund sales of over $2 billion, compared with $1.5 billion in the prior year.