Money market funds continue to dominate the inflows to the Canadian mutual fund industry, according to the latest numbers from the Investment Funds Institute of Canada.

IFIC reported today that July net sales, excluding re-invested distributions of $263.9 million, totalled $1.7 billion. Net sales for all funds including re-invested distributions were $2 billion.

Overall net sales are up 24.5% from last month, and they are about 40% higher than the month a year ago. But the sales continue to be concentrated in money market funds. These short-term funds accounted for almost $1.2 billion of net sales in the month. Long-term fund sales were down more than 18% from June.

For a change, U.S. equity funds led the way among long-term funds, accounting for $220 million of the sector’s $513 million in net sales.

Balanced funds came next, with almost $104 million in net sales, and followed by dividend and income funds, with $81 million in net sales. The balance of sales was made up of Canadian equities, foreign equities and income funds. Mortgage and real estate funds remain in net redemptions.

This represents a notable falloff for foreign equity funds, which have led the way among long-term funds this year, accounting for almost half of net sales in the year-to-date.

“Net new sales of mutual funds continue to be strong in July. Sales are approximately 40% higher than that of the same period last year and approximately 25% higher than last month,” stated Tom Hockin, IFIC president and CEO. “We are pleased to see that mutual fund sales continue to be solid while in the midst of the summer season. This is a positive indication that investors still have confidence in mutual funds despite the continuing market volatility.”

Total assets under management slipped in July to $411.1 billion, down 0.2% from $411.7 billion in June. Assets are down 2% from last July’s figure of $419.3 billion. Although industry assets continue to decline, the big banks are all enjoying modest asset increases thank’s to the emphasis on money market funds. Scotia is seeing the biggest percentage increase. Other gainers include PH&N, Clarington and McLean Budden.

The big losers are the large independents, such as C.I., Franklin Templeton, AIM and Fidelity. Altamira and Spectrum are also notably weak among the smaller firms.

IFIC also reported the total number of member unitholder accounts was 52.2 million, a 6.5% increase over one year ago.