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The Globe and Mail

October mutual fund net sales plunge 84% vs. year ago

Net sales of mutual funds plunged nearly 84 per cent in October from the same month a year ago, as volatile stock markets kept investors on the sidelines. But that still marked a recovery from September, when the industry saw more redemptions than sales.

Canadian investors plowed $282.5-million into funds last month, compared with $1.75-billion in the year-ago period, according to figures released Tuesday by the Investment Funds Institute of Canada (IFIC).

The industry turned back into net sales in October amid a market rebound. In September, the industry suffered from net redemptions of $205.1-million when stock markets were hit hard by uncertainty stemming from the euro-zone debt crisis and a slowing global economy.

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During October, the S&P/TSX Total Return Index rose 5.6 per cent versus a 11.9-per-cent decline in the previous month. The index was still down nearly 7 per cent for the first 10 months of this year.

Bond funds were the biggest-selling category, attracting $1.5-billion, while there were $1.5-billion in net outflows in equity funds. Balanced funds took in a net $566.9-million.

Net sales of the more profitable long-term funds tumbled to $637.8-million in October from nearly $2.9-billion in the same month last year. Net outflows of short-term, money market funds – essentially parking vehicles for cash – fell to $355.3-million in October from $1.1-billion a year ago.

IFIC's numbers are now a compilation of net sales figures supplied by member companies as well as data provided to, or estimated by, Toronto-based financial research firm Investor Economics.

By the end of 2010, the industry group's figures were no longer a true reflection of net sales when fund giants IGM Financial Group Inc. and CI Financial Corp. decided to only release quarterly numbers. Invesco Trimark Ltd. also stopped supplying figures to IFIC last fall after cancelling its membership.

Total fund assets under management for the Canadian industry fell to $773.7-billion in October from $778.5-billion at the end of 2010.

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