Mutual fund net sales reached $2.58 billion in March, but all of the action was in money market funds, according to the latest data from the Investment Funds Institute of Canada.

Money market fund sales were $2.65 billion in March, whereas long-term funds had net redemptions of $65.9 million. Compared with the same month a year ago, short-term fund sales were up sharply from $563.5 million, but long-term sales were down even more dramatically from the $4.59 billion seen last March.

Year to date net sales are down by almost half from a year ago. Net sales for the first three months of the year are just over $9 billion, down from more than $17 billion last year. However, this year’s sales result is in line with the totals recorded in 2006 and 2005, IFIC points out.

Among the long-term funds, equity funds generated over $500 million in monthly net redemptions in March, and bond funds also saw redemptions. This was offset by sales into balanced and specialty funds.

RBC Asset Management led the way with more than $1.2 billion in overall net sales, including over $1 billion into its short-term funds. No other firm had as much as $300 million in overall net sales, with TD Asset Management and Desjardins coming closest.

Desjardins also led the long-term sales race, with $282 million worth. Dynamic was the only other firm to produce more than $200 million in long-term net sales. Fund-of-fund sales were $629.4 million in the month, down from $1.9 billion in February and $2.8 billion in March 2007, IFIC noted.

Industry assets under management were $686.4 billion, up from $678.7 billion in February and slightly below total net assets at March 2007 ($690.1 billion). Asset growth was strongest for short-term funds, which ended March at $66.4 billion, up from $47.3 billion in March 2007.

“Total asset growth in March was $7.7 billion, an increase of 1.1% from February, with $2.8 billion coming from market effect,” says Pat Dunwoody, IFIC’s vice president, member services and communications. “Sales were solid overall in March with inflows to money market funds particularly strong. Fund-of-fund investors maintained their commitment to an asset allocation plan by contributing another $629 million.”