As it predicted in its preliminary stats, the Investment Funds Institute of Canada is reporting that mutual fund sales improved in May.

Net sales jumped 37.4% to almost $1.9 billion in the month. However, the majority of the jump came in money market funds. The money funds saw their net sales spike 74% from April to May, accounting for more than $1.1 billion in net sales. Long-term funds were essentially flat, with net sales rising just 3.9%.

The May results are in line with the trend evident so far this year. Year-to-date, long-term net sales are down 44%. Conversely, money market funds have seen their sales rise from slightly negative last year to $6.3 billion in the period this year, as investors continue to park money in anticipation of buying opportunities.

“Mutual funds experienced continued improvement of net new sales. In fact, both May and year-to-date sales are the highest since 1998,” stated Tom Hockin, IFIC’s president and CEO. “Investors continue to take a wait and see approach as a large portion of new money is being invested into money market funds.”

Within the category of long-term funds, foreign equities remain most popular, accounting for $227 million in net sales, although this is down almost 22% from April. U.S. equities are running a strong second, with $189 million in net sales in May, up 13.6%. Canadian equities are the one sector showing a notable rebound, with sales up 151% from April, albeit off a low base, to $111 million. Balanced sales remain flat, and the bond fund sales show a slight shift from domestic to foreign paper in the month.

The continuing preference for short-term funds also continues to bolster the banks’ fund families. Scotia enjoyed the biggest asset increase in the month among the banks, followed by CIBC and BMO. The two bigger players, TD and Royal, lagged a bit.

Other firms that did relatively well in May include firms with three-letter names starting with the letter A, notably, AIM, AGF and AIC. Smaller winners include Clarington, Synergy, Standard Life, Northwest and Cartier.

The laggards this month were C.I., Fidelity, Mackenzie and Franklin Templeton among the big firms. Sagit and University Avenue suffered among the smaller firms.

IFIC also reported the total number of unitholder accounts was 51.8 million, a 6.6% increase over one year ago. Total assets under management increased in May to $422 billion, up 1.5% from $415.9 billion in April. Assets are up 3.4 % from last May’s figure of $408.3 billion.