Canadian fund assets slump $80 billion as markets weaken

Current challenging times for the markets has seen an eyewatering reduction in the assets of Canadian mutual funds and exchange-traded funds (ETFs).

New stats from the Investment Funds Institute of Canada (IFIC) reveal a $71.9 billion decrease in mutual fund assets in September, a 3.9% drop from August, to $1.76 trillion.

For ETFs, assets dropped $11.1 billion, down 3.7% from August, to $287.6 billion.

The continued pressure on Canadian funds comes amid volatility for the markets, especially equities and bonds.

Investors continued their pullback from Canadian mutual funds, with net redemptions of $9 billion in September. That is almost three times the $3.1 billion in net redemptions recorded in August.

Balanced funds saw the largest redemptions last month at almost $5 billion, while equities dropped $2.9 billion, and bonds were down $1.9 billion.

Money market funds offset some of the decline for long-term funds with $825 million in net sales.

ETF sales

Exchange-traded funds maintained their winning position in September with net sales of $1.8 billion, a slight rise from the $1.5 billion in the previous month.

Money market funds led the gains with $1.7 billion in net sales, while for long-term funds there were gains for bond ETFs at $540 million (following August’s $347 million net redemptions) and for balanced funds at $67 million.

These sales were offset by net redemptions of $390 million for equity ETFs, a sharp reversal from the $1.2 billion in net sales in August. There were also $81 million in net redemptions for speciality ETFs.

_{* Important Information Regarding Investment Fund Data:}

_{1. Mutual fund data is adjusted to remove double counting arising from mutual fundsthat invest in other mutual funds.}

_{2. Starting with January 2022 data, ETF data is adjusted to remove double counting arising from Canadian-listed ETFs that invest in units of other Canadian-listed ETFs. Any references to IFIC ETF assets and sales figures prior to 2022 data should indicate that the data has not been adjusted for ETF of ETF double counting.}

_{3. The Balanced Funds category includes funds that invest directly in a mix of stocks and bonds or obtain exposure through investing in other funds.}

_{4. Mutual fund data reflects the investment activity of Canadian retail investors.}

_{5. ETF data reflects the investment activity of Canadian retail and institutional investors.}