Mutual funds post second consecutive month of net sales, IFIC reports
Canadian investors pulled back from money market funds in August, the largest monthly net redemptions since November 2021, largely the result of outflows from high-interest saving account funds according to the Investment Funds Institute of Canada (IFIC).
The latest figures reveal that Canadian mutual funds posted a second consecutive month of positive net sales, although well below the ETF-beating level seen in July.
Across all asset classes, mutual funds recorded net sales of $2.4 billion, led by $2.5 billion for bonds (down from $3.3 billion in July) and $1.1 billion for equity funds (from $2.1 billion in July). Specialty funds were also positive with $547 million, down from $800 million in July.
However, balanced funds recorded net redemptions of $1.4 billion (more than July’s $1 billion) and money market funds saw net redemptions of $420 million, having posted net sales of $31 million in July.
Mutual fund assets totalled $2.145 trillion at the end of August, up by $7.7 billion or 0.4% since July.
The funds remain constrained compared to prior year levels with net inflows of $3.6 billion in the first eight months of the year versus $23.2 billion in 2023.
ETFs
The story is very different for ETFs where year-to-date inflows of $41.6 billion in 2024 is an impressive 82% above 2023’s $22.9 billion.
For August, net sales were $4.3 billion, down from $4.9 billion in July, with all asset classes posting net sales with the exception of money markets, which posted net redemptions of $94 million, down from $310 in net sales in July.
ETF net sales were lower for all asset classes except specialty at $991 million, up sharply from $254 million in July.
Equity ETFs posted the highest net sales - $1.7 billion, down from $2.4 billion in July – followed by bonds at $1.2 billion, down from $1.5 billion, and balanced at $464 million, down from $558 million in July.
ETF assets totalled $464.0 billion at the end of August, up by $5.9 billion or 1.3% since July.
