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Canadian fund assets increase between July and August

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Canadian fund assets stood at CAD567.6bn at the end of August, up from CAD556.7bn in July but down from CAD634.8bn at this point last year, according to the Investment Funds Institute o

Canadian fund assets stood at CAD567.6bn at the end of August, up from CAD556.7bn in July but down from CAD634.8bn at this point last year, according to the Investment Funds Institute of Canada.

Long-term fund assets totalled CAD503bn, up from CAD489.9bn in July and down from CAD564bn at this point last year. Over the last six months, long-term fund assets have increased by CAD100m or 25 per cent.

Overall net sales in August were -CAD462.6m, with -CAD2.26bn in money market fund sales and CAD1.8bn in long-term fund sales. Long-term fund net sales year-to-date were CAD7.8bn up from -1.6 billion at this point last year.

Money market fund net redemptions slowed from July (-CAD3.31bn) and were still being driven primarily by investor movement back into long-term fund categories as well as movement into other interest-bearing investments – often offered within the same financial institution.

Balanced funds led the way in net sales in August at CAD1.24bn. Balanced fund sales were up from July (CAD1.12bn) and from August 2008 (CAD381.7m). Balanced fund sales year-to-date totalled CAD4.57bn and were up from this point last year (CAD4.01bn).

Bond fund sales came in at CAD1.08bn in August and were down slightly from July (CAD1.1bn) but were much improved from the previous year (CAD105.3m). Year-to-date bond fund net sales were CAD7bn compared with CAD325.5m at this point last year

Equity fund net redemptions were CAD531.6m in August. Equity fund net redemptions were up from the previous month (-CAD395.8m) but were down from the previous year (-CAD663.8m). Equity fund net redemptions year-to-date (-CAD3.31bn) have slowed substantially when compared to the same period last year (-CAD6.98bn).

Canadian short term fixed income fund sales were CAD430.1m in August, down slightly from July (CAD460.3m) but up from August 2008 (CAD33m). The Canadian short term fixed income fund category led the way in sales year-to-date with CAD3.3bn.

The next best selling CIFSC categories after this were the Canadian fixed income fund (CAD375.8m), Global neutral balanced fund (CAD367.6m), Canadian neutral balanced fund (CAD357.5m) and Canadian fixed income balanced fund categories (CAD262m).

Dropping out of the top five for the first time since October was the high yield fixed income fund category. High yield fixed income fund sales were CAD229.2m in August. The category still had the second highest fund sales year-to-date at CAD2.8bn.

Pat Dunwoody, vice president, member services and communications, says: "We have seen a 25 per cent increase in long-term fund assets over the last six months which translated into a CAD100bn improvement, collectively, in Canadians’ long-term fund holdings.

"In addition, investors continued to diversify in August investing CAD1.2bn in balanced funds, CAD1.1bn in bond funds and CAD852m in fund of fund products."

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