Arpad Benedek
Canadian investors plowed an estimated $3-billion into mutual funds in February as North American markets rebounded during the key month of the registered retirement savings plan (RRSP) season.
Net sales of funds nearly doubled from $1.7-billion during the same month last year, according to preliminary figures released Tuesday by the Investment Funds Institute of Canada (IFIC).
"People are getting back into the market," said Dennis Yanchus, IFIC's manager of statistics. "Investor confidence is much better than last year at this time."
While North American markets were in meltdown mode a year ago, it was a different story this February. The S&P/TSX composite climbed 4.8 per cent last month, while the S&P 500 index rose 2.9 per cent.
But the high note for the Canadian fund industry was the fact that net sales of the more profitable long-term funds, which invest in stocks and bonds, shot up to about $5-billion last month, against $259-million a year ago, after significant money market redemptions.
And long-term net sales for January and February surged to about $8.1-billion compared with $64-million in the same two period a year ago.
Investors are not just shifting cash from money-market to long-term funds, but are "putting new money into mutual funds," Mr. Yanchus said. "This is the best RRSP season [for long-term funds]since 2007 when it was $11.4-billion."
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RBC, which includes RBC Asset Management and Phillips Hager & North Ltd., took in $163-million in net sales. However, that included $906-million in long-term funds, and net redemptions of $743-million in money market funds.
Fidelity Investments Canada ULC was the leader in overall net sales, taking in $552-million.
Among publicly traded fund companies, DundeeWealth Inc.'s Dynamic Funds attracted $506-million in February. "What a difference a year makes," said Jordy Chilcott, head of Dynamic Funds. "Investor confidence is on the rise." Dynamic's three top sellers were all balanced funds with Dynamic Strategic Yield at the top of the list, he said.
CI Financial Corp., which is not a member of IFIC, reported $346-million in net sales last month. IGM Financial Inc., which includes Investors Group and Mackenzie Financial, took in $281-million.
Not everyone was benefiting from improving sentiment.
AGF Management Ltd.'s net redemptions increased to $114.7-million in February from $41.5-million a year ago. The departure in January of award-winning manager Christine Hughes, who ran the popular AGF Canadian Balanced Fund, didn't help sales.
Invesco Trimark Ltd. also saw $295-million in net outflows, while Franklin Templeton Investments Corp. posted $220-million in net redemptions.