IFIC data reveals largest single-month inflows for mutuals in more than two years
Canada’s mutual funds have been forced into second place behind ETFs for some time now, frequently posting monthly net withdrawals while ETF sales soared. But that changed last month.
With the largest single-month inflows since February 2022, mutual funds posted net sales in July of $5.2 billion, beating the total for ETFs by more than $200 million.
New stats from the Investment Funds Institute of Canada reveal that bond funds led the way for mutuals with $3.3 billion in net sales (compared to $1.2 billion in June), but there was also an impressive rebound for equity funds which saw more than $2 billion net sales compared to $2.6 billion net redemptions in the previous month.
Balanced funds remained negative but the net redemptions slowed to $1 billion from $4 billion. It was the only mutual fund asset class to record net redemptions in July.
Net sales were stronger last month for speciality funds ($800 million) compared to a month earlier ($473 million) but money market funds fell out of favour with just $31 million net sales, a sharp drop from the previous month’s $2.5 billion.
Mutual fund assets reached an all-time high in July, surpassing the previous record set in December 2021, with a gain of $65.2 billion or 3.1% month-over-month to a total of $2.1 trillion.
ETF sales
Meanwhile, Canadian ETFs continued their winning streak in July, albeit at a far slower pace than June’s record setting $10.1 billion in net sales.
Funds posted $5 billion in net sales to be the runner-up to mutuals this time. However, these funds did manage positive results across all the major asset classes.
Unlike mutuals, ETF investors favoured equities rather than bonds, with $2.4 billion in net sales for equities and $1.5 billion for bonds. Both were far lower than in the previous month ($2.8 billion and $5.5 billion respectively).
However, as with mutuals, Canadian ETFs saw far lower net sales for money market funds ($310 million in July vs. $1.1 billion in June) and speciality funds ($271 million vs. $387 million). Balanced funds performed better last month with $558 million in net sales compared to $399 million in June.
ETF assets totalled $458.1 billion at the end of July, up by $17.9 billion or 4.1 per cent since June. ETF net sales were $5.0 billion in July.
