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Canadian investment fund assets reach CAD497.4bn in March

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Total industry assets stood at CAD497.4bn at the end of March 2009, up from CAD476.9bn in February, according to the Investment Funds Institute of Canada.

Total industry assets stood at CAD497.4bn at the end of March 2009, up from CAD476.9bn in February, according to the Investment Funds Institute of Canada.

Long-term mutual fund assets increased from CAD403bn at the end of February to CAD422.5bn at the end of March though long-term fund assets were still down from the start of the year (CAD436.3bn).

Among the broad asset classes, equity fund assets increased the most in March growing by CAD11bn to end the month at CAD180bn. Both balanced fund assets and nond fund assets also increased in March growing by CAD7.3bn and CAD1.4bn respectively. Specialty fund assets decreased slightly from the previous month to end March at CAD5bn.

Total industry net sales were CAD519.7m in March, down from CAD1.68bn in February and CAD2.49bn in March 2008. Industry sales over the first three months of 2009 were a respectable CAD3.4bn but were still down from the CAD9.06bn in net sales over the first quarter of 2008.

Money market funds led the way in sales in March at CAD932.5m. Money market fund sales were down from the previous month (CAD1.42bn) and the previous year (CAD2.49bn).

Among long-term funds, bond funds led the way in sales in March attracting CAD568.8m. Bond fund sales while still strong in March were down from the previous month (CAD870.4m) but sales were much improved from this time last year (-CAD19.3m). Over the first quarter, Canadians invested CAD1.76bn in bond funds compared with net redemptions of CAD136m over the first three months of 2008.

The other three long-term fund asset classes were in net redemption territory in March. Equity funds had net redemptions of CAD685.6m, up slightly from net redemptions of CAD683.2m in February and CAD628.9m in March 2008. Equity fund net redemptions over the first quarter totalled CAD1.75bn and were down substantially from the first quarter of 2008 (CAD3.13bn).

Balanced fund net redemptions were CAD131.9m in March, down from net sales of CAD131.3m in February and CAD207.1m this time last year.

Canadians invested CAD183.1m in fund-of-fund products in March. Fund-of-fund sales over the first quarter totalled CAD738.2m compared with CAD2.11bn over the first three months of 2008.

Industry asset growth was very strong in March as fixed income and equity markets both at home and abroad performed particularly well. At the end of March the industry had CAD20bn in new assets under management attributable to market performance. This was a reversal of the trend over the last three, six and 12 month periods when market effect averaged -CAD4.3bn, -CAD12.5bn and -CAD10.5bn per month.

Industry net sales were CAD519.7m in March which was below the monthly average of CAD1.1bn over the last three months but well above the monthly average over the last six month (-CAD1.1bn) and 12 month (-CAD500m) periods.

The effect of both positive net sales and market effect resulted in a CAD20.5bn (4.3 per cent) month-over-month increase in assets under management with total industry assets coming in at CAD497.4bn at the end of March.

Pat Dunwoody, vice president, member services and communications, says: ‘Just about every asset class saw positive returns in March which resulted in a CAD20bn increase in the mutual fund holdings of investors overall.

"New mutual fund sales added another CAD519.7m in assets under management which predominantly flowed to money market funds and bond funds. Investors were still waiting on the sidelines for the most part but their existing long-term investments were gaining ground last month which was very positive."

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