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Canadian fund companies continue to see their total assets remain below pre-COVID levels despite $2.6-billion in mutual fund sales in May as investors slowly began to regain confidence in the markets.

Mutual fund assets totalled $1.58-trillion at the end of May, up $38.7-billion or 2.5 per cent compared with April – but still below the $1.61-trillion high recorded at the end of February, according to data released on Friday by the Investment Funds Institute of Canada (IFIC).

The fund industry saw more than $14-billion in redemptions in March as falling markets drove down the value of assets in mutual funds and investors were quick to cash out of long-term funds, including balanced, equity and bond funds.

Now, over the past two months, Canadians have slowly been returning to markets with $1.8-billion in net sales for long-term mutual funds – which includes equity and bond funds – in May, up from $1.2-billion in sales in April. The same long-term funds had experienced net redemptions of more than $18.2-billion in March as fear from the coronavirus outbreak affected financial markets.

With markets recovering, equity funds saw more than $297-million in sales in May, while bond funds saw more than $1.83-billion in sales.

In May, money-market funds gained $817-million in sales, compared with $27-million in net redemptions for April.

Canadian exchange-traded fund (ETF) assets totalled $211.4-billion at the end of May – creeping closer to the record high in mid-February of $220-billion.

Equity ETFs sold the most, with $1.8-billion in net sales, while balanced funds saw $73-million in sales. Money market ETFs finished the month with $402-million in net sales. Bond ETFs continued to see net redemptions of $56-million, although down from redemptions of $629-million in April.

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