Bond funds selling, equity funds extend slump

In the face of declining sales and the stark reality that declining equity markets have significantly depleted industry assets in the past year, the uptick is a welcome, albeit small bit of news: $20 billion in new assets under management this month are attributable to market performance.

Unfortunately, industry net sales fell significantly at the same time to $519.7 million in March, down from $1.68 billion in February and $2.49 billion reported in March 2008. In the past year, industry assets declined 20.9% overall, as equity markets reduced long-term fund assets by $141.7 billion.

In March equity funds suffered net redemptions of $685.6 million while balanced fund investors pulled $131.9 million. Money market fund sales were also down significantly compared to the previous month and compared to March 2008 numbers, but the category still led the way this month. IFIC says the bulk of net sales continued to flow to funds in the Canadian money market category. The funds generated new sales of $932.5 million during the month, down from the $1.42 billion reported in February and $2.49 billion sold in March last year.

In a flight to safety (if not returns), meanwhile, bond funds led the way among long-term investment funds. That said, bond fund sales totaling $568.8 million in March, are still down compared to the $870.4 million reported in February. Not surprisingly, both of these numbers are significantly higher relative to the $19.3 million worth of net redemptions the category saw in March 2008 when equity markets were still all the rage. Overall, long term mutual fund assets increased to $422.5 billion, up from $403 billion in February.

At the end of March, total industry assets stood at $497.4 billion, up from $476.9 billion in February. All told, positive net sales and market effect led to a 4.3% increase of assets under management, worth $20.5 billion.

“Industry sales over the first three months of 2009 were a respectable $3.4 billion, but were still down from the $9.06 billion in net sales over the first quarter of 2008,” the IFIC report said.

Year-over-year change numbers are decidedly less rosy, with nearly all firms across the board reporting double digit losses for the year. That said, month-over-month change numbers for AUM at the top 10 companies reporting statistics to IFIC, range from increases of 2.4%, reported by CIBC Asset Management, and 5.9% reported by Dynamic Funds.

The combined assets of RBC Asset Management and Phillips Hager & North grew by 4.3% during the month, coming in at the top of IFIC’s list with nearly $94.5 billion in assets under management. IGM Financial (including Investors Group, Mackenzie Financial and Counsel Group of Funds) reported assets of $81.7 billion, while TD Asset Management, CIBC and Fidelity Investments round out the top five with $46.2 billion, $40.9 billion and $33.6 billion each, respectively.

Company	Net assets March 2009 ($)(billions)	Net assets February 2009 ($)(billions)	Change (%)	Net assets March 2008 ($)(billions)	Change (%)
RBC	94.45	90.51	4.3%	105.11	-10.1%
IGM Financial Inc.	81.67	77.98	4.7%	104.63	-21.9%
TD Asset Management	46.19	44.68	3.4%	56.25	-17.9%
CIBC Asset Management	40.93	39.96	2.4%	50.72	-19.3%
Fidelity Investments Canada	33.56	31.60	6.2%	41.05	-18.2%
BMO Financial Group	28.74	27.75	3.6%	36.95	-22.2%
Invesco Trimark Ltd.	26.26	25.34	3.6%	41.60	-36.9%
AGF Funds Inc.	19.11	18.06	5.8%	28.03	-31.8%
Franklin Templeton	17.37	16.83	3.2%	25.39	-31.6%
Dynamic Funds	17.08	16.13	5.9%	21.09	-19.0%
Scotia Securities Inc.	16.86	16.13	4.6%	18.86	-10.6%

Source: Investment Funds Institute of Canada.

(04/15/09)