Mutual fund sales rebound, despite retreat in AUM, IFIC reports

But sales numbers were still far behind ETFs

Mutual funds returned to positive sales territory in May, but continue to lag exchange-traded fund (ETF) sales, according to the latest data from the Investment Funds Institute of Canada (IFIC).

The industry trade group reported that mutual funds generated $719 million in positive net sales during May, reversing the $1 billion in net outflows experienced in April.

Long-term funds only produced $300 million in monthly net sales, while money markets contributed $419 million.

Equity funds still had almost $2 billion in net redemptions in May, representing a modest improvement from $2.15 billion in April.

Balanced funds also had $236 million in monthly net redemptions, compared with $922 million in the previous month.

Yet, bond funds produced $1.84 billion in positive net sales during the month, up from $1.46 billion in April. Specialty fund sales ticked up from $673 million to $700 million.

While mutual fund sales improved in May, they were still far behind ETFs, which generated $4.0 billion in monthly net sales, IFIC reported.

This is up notably from $2.4 billion in April, and ETF sales of $1.1 billion in May 2018.

Equity ETFs led the improvement in ETF sales, jumping sharply from $782 million in April to $2.4 billion in May.

Notwithstanding the sales improvement among both mutual funds and ETFs, assets under management declined on both sides of the industry.

Mutual fund assets dropped by 2.0%, $31.4 billion, to $1.53 trillion in May, and ETF assets declined by 0.5% to $177.8 billion during the month, IFIC reported.