IFIC stats for December also show that assets of both fund types increased
The bullish narrative around the bonds market for 2024 that began towards the end of last year, has translated into a strong rise in sales for Canadian investment funds.
While a $845 million net sales total for the asset class in December is not enough to turn around the withdrawals trend for mutual funds, it was a rebound from the $435 million net redemptions for the asset class in the previous month and the $2.1 billion net redemptions seen in December 2022.
Mutual funds also gained from $176 million in net sales for speciality and $790 million for money market funds, although both were down from the previous month’s $391 million and $1.3 billion respectively.
But with net redemptions for balanced funds of $4.6 billion, and for equities of $2.5 billion, total net redemptions were $5.3 billion, down from $8.5 billion in November. For 2023 as a whole, net redemptions were $57 billion, up from less than $44 billion in 2022.
Assets provided some good news though, increasing $43 billion or 2.3% month-over-month to $1.9 trillion.
ETFs
Meanwhile, Canadian ETFs continued to record net sales overall, although money market funds lost lustre for investors and the overall sales total for the funds was down from a month earlier.
Total net sales of $3.8 billion were driven by strong interest in bonds, which accounted for 48% of net inflows with the vast majority going into Canadian bond funds. Net sales for bonds of more than $1.8 billion (up from $582 million in November), were followed by slightly less than $1.8 billion for equities (down from $2.8 billion) which accounted for 47% of net sales, led by U.S. equities.
Specialty funds tumbled to $213 million from $1 billion in the previous month while balanced funds increased to $237 million (from $196 million).
Money market funds saw net redemptions of $271 million following net sales of $452 million in November and marking the first month of negative money-market sales since November 2021.
For 2023, ETF total net sales were $37.6 billion, up from $36 billion in 2022.
ETF assets totalled $382.5 billion at the end of December, up by $13.2 billion or 3.6% since November.
