Mutual fund sales top estimates

The mutual fund industry beat sales forecasts in January 2011, with total net sales of $3.05 billion, topping The Investment Funds Institute of Canada’s preliminary forecast of between $2.45 billion and $2.95 billion.

Total mutual fund assets ended the month at $641.8 billion, up $6.1 billion from December and a hefty $85.4 billion since last January.

“The RRSP season was in full swing in January with total fund sales surpassing the $3 billion mark driven primarily by strong balanced fund sales,” said IFIC director of policy, Jon Cockerline.

Long-term fund sales brought in $3.97 billion, up from $2.31 billion in December. Money market redemptions slowed to $916 million.

Investors continued to pour their money into fund-of-fund products, which enjoyed net sales of more than $2 billion, up from $1.58 billion in December. Over the past 12 months, fund-of-fund net sales totaled $18.3 billion, up over $8 billion from the previous 12 month period ($10.3 billion).

Among standalone funds, the balanced category continued its reign, with net sales of $3.42 billion, up more than $1 billion from December. In the past year, balanced funds have pulled in $27.1 billion in net sales.

“While the popularity of balanced funds and fund-of-fund products continued to grow last month, we also saw a definite shift away from short-term fixed income funds towards funds focused on higher yielding corporate and foreign debt,” Cockerline said.

Bond fund net sales fell by two-thirds from December’s total, to $215.8 million.

Equity funds enjoyed a bounce, pulling in net sales of $305.4 million, compared to $794.5 million in net redemptions for December.