Financial stock exchange market display screen board on the street

Amid heightened market volatility in January, RRSP season got off to a weaker start than last year for mutual funds, according to the latest data from the Investment Funds Institute of Canada (IFIC).

Mutual fund sales totalled $7.2 billion in January, down from $11.6 billion in the same month last year.

The weaker overall net sales came against the backdrop of a 2.7% decline in assets during the month ($55.3 billion worth), due to market weakness.

Net sales were down for each of the major asset classes.

Balanced funds recorded just over $3 billion in monthly net sales this year, down from almost $5 billion last year.

Similarly, equity fund sales were down from $4.2 billion in January 2021 to $2.9 billion this year. And bond fund sales dropped from almost $3.1 billion a year ago to just $349 million this year.

While mutual fund sales were generally weaker this January, the same can’t be said for ETFs.

IFIC reported that ETF net sales in January rose to $5.1 billion from just over $4 billion last year.

Equity funds accounted for the vast majority of monthly net sales (almost $4.7 billion worth), up from less than $2.7 billion in January 2021.

At the same time, balanced fund sales slipped from $495 million last year to $301 million this year. Bond ETFs recorded $150 million in net redemptions this year, compared with over $1.3 billion in net sales last year.

Despite the increase in net sales, ETF assets were still down in January, albeit not as sharply as mutual fund assets. ETF assets declined by 1.3% ($4.6 billion) from December.