August mutual fund sales reaches $1.3 billion

Money market fund the big winners

By: IE Staff
September 17, 2001 September 17, 2001
12:45

The Investment Funds Institute of Canada is reporting that August net mutual fund sales reached $1.3 billion. Almost all of that was put into money market funds.

As they have all year, investors continue to plow money into short-term funds. In August, they did so to the virtual exclusion of long-term funds. Fully $1.16 billion of the month’s net new sales went into money market funds, down a little from the previous month.

Long-term fund sales virtually disappeared in August, with just $181.6 million flowing into these asset classes. The dividend funds received the strongest net sales, at better than $ 90 million. Another $80.2 million went into U.S. equity funds, and $75.3 million flowed into balanced funds. Foreign equity funds saw about $31 million in net redemptions, and bond funds lost $36.9 million.

On a year over year basis, net sales are ahead of last year’s pace at $22.3 billion, up 5.7%. However, long-term fund sales are down 43% from the same period in 2000. Money market fund sales are up a staggering 1400% from $709 million last year to $10.6 billion this year.

Naturally the big winners from these trends remain the banks. Although industry assets dropped another 1.3% in August, the banks generally saw the smallest losses on a percentage basis. The bigger losers were independent firms such as Fidelity, AGF, CI and PH&N. Firms with strong value portfolios, such as Franklin Templeton, AIM, and Mackenzie, held up better than most. Clarington continues to roll along with strong gains.

“Despite continuing market volatility we are pleased to see that net sales remain solid. In fact, they are up 2.5% from August of last year,” says Tom Hockin, IFICÕs president and CEO. “Year-to-date sales are also up 10% from the same period last year.”

IFIC also reported the total number of Member unitholder accounts at 52.0 million, a 5.7% increase over one year ago. Total assets under management decreased in August to $405.9 billion, down 1.3% from $411.1 billion in July. Assets are down 7.4% from last AugustÕs figure of $438.5 billion.