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Mutual funds

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Canadian mutual fund assets rise by 0.6 per cent in August

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Canadian mutual fund assets totalled CAD611.5bn at the end of August, up CAD3.7bn or 0.6 per cent from July, research by the Investment Funds Institute of Canada shows.

Assets increased by CAD16.3bn or 2.7 per cent since the beginning of the year and by CAD43.9bn or 7.7 per cent since August 2009.

Overall net redemptions for August were CAD83.3m, down from net sales of CAD152.6m in July, but up from net redemptions of CAD462.6m in August 2009.

Total sales in August were comprised of CAD606.8m in long-term fund net sales and CAD690m money market fund net redemptions. Long-term fund sales were down from CAD1bn in July and from CAD1.81bn in August 2009. Money Market fund net redemptions slowed from both July 2010 (-CAD852.1m) and from August 2009 (-CAD2.27bn).

Long-term fund net sales over the last 12 months totalled CAD25.6bn, up from net redemptions of CAD4.64bn over the previous 12 month period. Long-term net sales over the last 12 months were enhanced by a CAD40.8bn long-term fund market effect. The long-term fund market effect was up from -CAD56.2bn over the previous 12 month period.

Fund of fund sales were CAD911m for August, down slightly from CAD988m in July, but up from August of last year (CAD852m). Year-to-date, fund of fund sales were CAD11.87bn and were up from CAD3.85bn over this point last year.

Fixed income funds led the way in August with CAD1.1bn in net sales, up from last month (CAD850.9m) and the same as last August (CAD1.1bn). Over the past 12 months, fixed income fund sales totalled CAD11.1bn, up from the previous 12 month period (CAD4.94bn).

Balanced fund net sales were CAD868.5m, down from CAD1.24bn in July and CAD1.24bn in August 2009. Year-to-date, balanced fund net sales were CAD16.4bn, compared to only CAD4.53bn at this point last year.

Equity funds had net redemptions of CAD1.37bn in August, up from CAD1.04bn last month and CAD528.6m last year. Over the last 12 months (CAD8.21bn) equity fund net redemptions were slightly lower than the previous 12 month period (CAD8.38bn).

Pat Dunwoody, vice president, member services and communications at IFIC, says: “Collectively, investors have seen their account balances increase by CAD12.7bn or 2.1 per cent since the start of the year due to market appreciation.  During this same period, there have been some sizeable market fluctuations,

“We continue to see new investment primarily in balanced funds and fund of funds with investors preferring to access equity funds indirectly through these products. Investors purchased close to CAD3bn in equity funds through their fund of fund holdings during the first eight months of 2010 alone.”

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