By James Langton

(January 11 – 10:00 ET) – Merrill Lynch estimates Canadian mutual fund industry net sales for December 2000 at $1.4 billion, down 22% from November, but enough to boost industry sales up 29% from 1999.

The brokerage firm estimates that industry assets at the end 2000 reached $418 billion, up 7.3% from December 1999. It says, “We believe that the industry still has the capacity to grow in the 10%-15% range in the near-term.”

In fact Merrill says the fund business could be well positioned in 2001 as investors turn away from individual stocks and back to active managers. “Given global stock markets’ slide over the final quarter of 2000 and the $4.6 billion in estimated inflows (up some 360%), we think the mutual fund industry could be positioned to recapture market share from individual stocks,” says Merrill’s financial services analyst Cameron Webster. “In particular, we think the discount brokerage channel, where individual investors braved it on their own and were snake-bitten in 2000, represents an opportunity for the mutual fund industry.”

Webster forecasts that if market volatility continues, conservative asset classes could be the winners in the upcoming RRSP season. “Look for Global Balanced, Domestic Balanced, Dividend, and Domestic Equity funds to be the leading sales categories in 2001.”

Ranked by total net inflows, Mackenzie Financial was the top firm in December, although its sales were positively influenced by an institutional investor contributing $179 million. Subtracting that, Mackenzie falls to third. Fidelity, AGF and C.I. came next in December.

The year 2000 belonged to C.I. The firm that failed in its hostile takeover of Mackenzie, enjoyed net sales of about $6.5 billion in 2000, outpacing number two Fidelity by about $1 billion.

AGF ranks a distant third with over $2.5 billion, followed by CIBC at $1.7 billion and Mackenzie at just over $1.4 billion.

Altamira also had a good year, posting nearly $700 million in positive fund sales from a redemption position in 1999. In the year, the top five firms accounted for 95% of net sales.