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Mutual funds returned to positive sales territory in May, but continue to lag exchange-traded fund (ETF) sales, according to the latest data from the Investment Funds Institute of Canada (IFIC).

The industry trade group reported that mutual funds generated $719 million in positive net sales during May, reversing the $1 billion in net outflows experienced in April.

Long-term funds only produced $300 million in monthly net sales, while money markets contributed $419 million.

Equity funds still had almost $2 billion in net redemptions in May, representing a modest improvement from $2.15 billion in April.

Balanced funds also had $236 million in monthly net redemptions, compared with $922 million in the previous month.

Yet, bond funds produced $1.84 billion in positive net sales during the month, up from $1.46 billion in April. Specialty fund sales ticked up from $673 million to $700 million.

While mutual fund sales improved in May, they were still far behind ETFs, which generated $4.0 billion in monthly net sales, IFIC reported.

This is up notably from $2.4 billion in April, and ETF sales of $1.1 billion in May 2018.

Equity ETFs led the improvement in ETF sales, jumping sharply from $782 million in April to $2.4 billion in May.

Notwithstanding the sales improvement among both mutual funds and ETFs, assets under management declined on both sides of the industry.

Mutual fund assets dropped by 2.0%, $31.4 billion, to $1.53 trillion in May, and ETF assets declined by 0.5% to $177.8 billion during the month, IFIC reported.