Improved year-over-year assets under management (AUM) figures for mutual funds, supported by a significant drop in net redemptions suggest the Canadian mutual fund industry may have regained some investor support.
Net redemptions totalled $83.3 million, down from net sales of $152.6 million last month, but up from net redemptions of $462.6 million last August, according to IFIC’s Statistical Commentary for August.
Long-term fund sales were $606.8 million, down from $1 billion last month and $1.81 billion in August 2009.
Bond fund sales totalled just under $1.1 billion in August, up from $850.9 million in July, but virtually unchanged from last year. Year-to-date bond fund sales totalled $5.33 billion.
At $868.5 million, balanced fund net sales slipped this month, down from $1.21 billion in July and $1.24 billion in August 2009. However, year-to-date, balanced fund sales totalled $16.4 billion, up from $4.53 billion at this point last year. Looking further back, over the past 12 months, balanced fund sales were $23.1 billion, up from net redemptions of $695.8 million over the previous 12 month period.
Equity funds were again struck by net redemptions, totalling $1.37 billion. That’s up from net redemptions of $1.04 billion in July and net redemptions of $528.6 million in August 2009.
Year-to-date, equity fund net redemptions total $5.54 billion, up from net redemptions of $3.22 billion at this point last year. The last 12 months have seen net redemptions of $8.21 billion from equity funds, down slightly from the previous 12 month period ($8.38 billion).
Money market fund net redemptions continued to slow, totalling $690 million for August. That’s better than the $852.1 million in net redemptions seen in July, and $2.27 billion in August 2009. Over the past 12 months, money market net redemptions totalled $22.4 billion and were up from $7.42 billion over the previous 12-month period.
Assets under management totalled $611.5 billion at the end of August, up from $607.8 billion in July and $595.2 billion at the start of the year.
Long-term fund assets were $569.3 billion, up from $565 billion in July and $502.9 billion at this time last year. The month-over-month growth in AUM carried through all the broad asset classes with the exception of Equity Fund and Money Market fund asset class due to net redemption activity in both those classes.
Over the past five years ending August 2010, Canadians have invested approximately $62.5 billion in mutual funds or an average of $12.5 billion per year, with long-term funds contributing $72.5 billion or $14.5 billion per year to this result. Looking further back over the past 10 years, net sales totaled $123.5 billion or $12.35 billion per year, of which $135.5 billion or $13.55 billion per year can be attributed to long-term fund sales.
(09/15/10)