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Canadian investors pulled more than $500-million out of mutual funds in October, but all of the cash flowed from money market investments yielding minuscule returns.

The outflows are off sharply from a year ago when investors went on a huge selling binge, yanking a record $8-billion out of funds amid a global credit crisis that sent stock markets plunging.

October was the fifth consecutive month for outflows in the Canadian industry, according to preliminary figures released Tuesday by the Investment Funds Institute of Canada.

“It's that same trend that we have been seeing most of this year,” Dennis Yanchus, IFIC's manager of statistics, said in an interview. “Overall net redemptions started in June...but money market fund net redemptions began in April.”

Cash is moving from money market investments into long-term stock and bond funds, while the rest is going to alternatives like higher interest-bearing savings accounts or guaranteed investment certificates, Mr. Yanchus suggested.

The net outflows came last month as the S&P/TSX composite index TSX-I fell 4.2 per cent in October, while the S&P 500 index SPX-I slipped 2 per cent. The slide came late in the month.

Tumbling stock markets reduced assets under management for the industry to between $569.3-billion and $574.3-billion from $582.7-billion in September, IFIC said.

RBC, which includes RBC Asset Management and Phillips Hager North Ltd., suffered from $884-million in net redemptions, while Invesco Trimark Ltd. experienced $394-million in net outflows.

Fidelity Investments Canada was the leader in net sales, taking in $352-million followed by Scotia Securities Inc. with $318-million.

Among the Canadian publicly listed companies, DundeeWealth Inc. DW-T , which owns Dynamic Mutual Funds, attracted $180-million. CI Financial Corp. CIX-T posted net sales of $191-million in October, but that figure is not part of IFIC's monthly data. CI Financial, which sells mutual and segregated funds, stopped submitting figures to the industry group last December.

IGM Financial Inc. IGM-T , which owns Investors Group and Mackenzie Financial, suffered from $150-million in net redemptions. The net outflows came from Mackenzie. AGF Management Ltd. also saw $78.3-million in net redemptions.