Mutual funds saw net redemptions rise again while ETFs maintained interest
The seemingly unstoppable trend of net redemptions from Canadian mutual funds gained pace in October according to new figures from the Investment Funds Institute of Canada (IFIC).
The $12.5 billion in net redemptions followed $7.6 billion in September and $5.7 billion in August, among an eight-month run of net redemptions for mutual funds. It was also a big leap from the $8.1 billion in net redemptions recorded in October 2022.
Money market funds were the only major asset class to end the month in positive territory despite a sharp slowdown to $997 million from $1.6 billion in the previous month.
This offset net redemptions of $13.5 billion for long-term funds including $8.6 billion for balanced (up from $6.2 billion in September); $4.1 billion for equity (up from $2.2. billion); and $1 billion for bond funds (up from $890 million). Speciality funds were the only positive group with net sales of $199 million, up from $133 million in September.
While outflows for the month amounted to 0.7% of September’s total assets, 30% of all mutual funds had positive net sales.
Year-to-date stats show a total of $43.3 billion in net redemptions for mutual funds, compared to $26.8 billion for the same period of 2022.
Mutual fund assets were down by 1.5% or $28.3 billion month-over-month and down 0.1% or $1.8 billion year-to-date at $1.81 trillion but were up slightly from the $1.79 billion of October 2022.
ETFs rise again
Meanwhile, Canadian ETFs continued their positive trend with net sales of $2.9 billion in October, roughly in line with the previous month.
Every major ETF asset class recorded net sales, led by $2.2 billion for long-term funds including bonds at $1.4 billion, up $270 million month-over-month and accounting for 49% of inflows; equities at $551 million (up from $334 million), specialty at $102 million (up from $18 million); and balanced at $100 million (down from $188 million).
As with mutual funds though, there was a large decrease in the net sales of money market funds, almost halving the September total of $1.3 billion to $697 million.
ETF assets totalled $345.3 billion at the end of October, down by $1.2 billion or 0.3% from September, but up from $300.5 billion in October 2022.
