Following a strong 2024, Canada's investment funds have started 2025 on a high
Canadian investment funds had plenty of reasons to celebrate their 2024 performance, but with some new challenges adding to continuing ones, they will be pleased to see 2025 start off well.
January’s sales show a positive start for both ETFs and mutual funds, according to new data from the Investment Funds Institute of Canada.
A year earlier, mutual fund sales were in negative territory with net redemptions of $780 million, but this year’s first month produced net sales of $3 billion, building on the $2.6 billion recorded in December.
The power behind the sales last month were bond mutual funds with $3.3. billion in net sales, which more than offset the $2.1 billion in net redemptions for equity funds (which posted a small $107 million in net sales in December). Balanced funds were also negative at $388 million net redemptions, although this was down from $573 million net redemptions in December and tiny compared to the $4.5 billion net redemptions of January 2024.
Speciality mutual funds soared in January with $1.4 billion in net sales, well above the $503 million of December. Money market funds were also positive with $852 million improving on December’s $721 million.
Mutual fund assets totalled $2.311 trillion at the end of January, up by $68.9 billion or 3.1% since December.
ETFs remain strong
Meanwhile, Canadian ETFs continued their stellar performance and posted on of their best months of net sales ever.
IFIC’s stats show that these funds saw $9 billion in net sales in January, down from the $11 billion in December but almost three times the $3.2 billion of January 2024. Last month’s net sales join the top three ever behind December and June 2024.
Unlike mutual funds, ETFs recorded positives across all major asset classes, and while mutuals were dominated by bonds, it was equities that continued to lead ETFs with $4.8 billion in net sales (down from $7.9 billion in December) while equities posted net sales of $1.7 billion (down from $2 billion in December).
The other major asset classes all improved on their performance in December with $745 million net sales for balanced funds (up from $712 million), $870 for specialty (up from $81 million in net redemptions), and $$816 million for money market funds (up from $99 million).
ETF assets totalled $541.4 billion at the end of January, up by $23.7 billion or 4.6% since December.
