Mutual fund net sales are holding up on the continued strength of money market funds, according to new numbers from the Investment Funds Institute of Canada.

Net sales in June, excluding re-invested distributions reached $1.4 billion, adding the re-invested distributions bumps the total to $2.4 billion. Sales are down about 26.5% from May 2001, although they are up almost 14% when you add in the re-invested distributions.

“June 2001 sales more than doubled sales of June 2000. Sales for the first six months of 2001 were greater than that of the previous two years,” stated Tom Hockin, IFIC’s president and CEO. “Despite market volatility in the first half of 2001, sales of mutual funds have remained solid indicating that investors believe that the last six months have been an opportune time to invest in mutual funds.”

Asset allocation in the month continued to reflect a bias toward safety among investors. Money market funds continue to dominate the sales picture, accounting for $736 million of the net new sales.

Foreign equities led the way among the long-term funds, with $182.5 million in net sales. U.S. equities came next, generating $178 million in net new sales. Balanced funds attracted $97.4 million in net sales, as compared to just $16.8 million in net sales for Canadian equity funds. The Canadian equity funds benefited the most from re-invested distributions, enjoying $286 million in the month.

Among the top firms, each of AGF, C.I., Mackenzie and Franklin Templeton suffered better-than-average asset erosion. The bank-owned firms held up best, led by Scotia. Among the independents, PH&N and Talvest are holding up well.

There were no major moves in the rankings among the top 30 fund companies. Among the smaller firms, Standard Life and McLean Budden are climbing the ranks at the expense of firms such as Sceptre and Mawer Investment Management.

IFIC also reported the total number of member unitholder accounts at 51.8 million, a 7% increase over one year ago. Total assets under management decreased in June to $411.7 billion, down 2.4% from $422 billion in May. Assets are down 2.2% from last June’s figure of $420.8 billion.