By James Langton

(March 15 – 14:40 ET) – The recent RRSP season finished slightly worse than last year’s, as investors sought shelter in more conservative funds, according to data from the Investment Funds Institute of Canada.

Net sales for January and February 2001 totalled $7.1 billion, down from $7.8 billion in the same period in 2000, a drop of 9.2%. Gross sales slipped 18% year over year, but redemptions also eased, down 21%.

Foreign equity funds were the top-selling long-term category in RRSP season with $1.4 billion in net sales. However, this was down sharply from 2000, when the category was responsible for almost $5.9 billion in net sales. Last year’s foreign equity sales were boosted by the introduction of RSP-eligible foreign funds.

This year, a more conservative tone to asset allocation remains evident in the currently choppy markets. Balanced funds are the second most popular asset class, with $922 million in net sales for the season, up 577%. Canadian equities came next at $911 million, albeit down 23% from last year. U.S. equities generated net sales of $676 million, down 39%.

Dividend and income funds rebounded from more than $400 million in net redemptions last RRSP season, to more than $400 million in net sales this year. Domestic bond funds pulled a similar turnaround, posting $389 million in net sales, after $309 million in net redemptions in the period a year ago.

But the biggest category was money market funds, where investors parked almost $2.4 billion in January and February, compared with $421 million last year. Foreign money market sales also climbed to $237 million from $30 million last year.

“February sales were encouraging given the weakness in all equity markets,” said Tom Hockin, president and CEO of IFIC. “February sales were up 122.6% over the previous month although they were down from February 2000. With equity markets having one of their worst Februarys in many years, investors were somewhat cautious.”

Total assets under management decreased in February to $412.7 billion, down 3% from $425.5 billion in January, but up 2.8% from last February’s figure of $401.3 billion.

The strong preference for safety saw the bank-owned fund companies benefiting most. As a result, TD jumped past AGF into sixth place, ranked by assets. Similarly, CIBC jumped past C.I., which saw its assets slide 6.9% in the month, giving CIBC eighth place.

Along with the banks, Franklin Templeton saw its assets hold up well despite the rough markets. Companies losing ground during the month include Altamira, down 10%, Spectrum, off 6.2%, as well as Talvest, Clarica, StrategicNova, Elliott & Page, Ethical Funds, Synergy, Acuity and Sceptre.