Canadian investors pulled an estimated $730-million from mutual funds in December amid continued market gyrations and tax-loss selling.
The net outflows are projected to be below the $909.8-million posted in November and a record of $8.4-billion in October, according to figures released Monday by the Investment Funds Institute of Canada (IFIC).
“Investors are still waiting on the sidelines,” Dennis Yanchus, IFICs' manager of statistics said Monday.
There was about $1.7-billion in net sales of money market funds last month, but the redemptions in stock and bond funds continued the industry's trend towards net redemptions.
It's not surprising that investors are continuing to pull money from funds, given the market volatility and last-minute annual tax-loss selling ritual, Mr. Yanchus said.
The S&P/TSX composite index fell 3 per cent in December after a year-end rally pulled the benchmark from a13-per-cent plunge during the month. Over the year, the index was down 35 per cent.
South of the border, the S&P 500 index edged up 0.78 per cent by the end of December after sliding 8.9 per cent earlier in the month. For 2008, that index was down 38.5 per cent.
Mr. Yanchus suggested there may be a dampening in net outflows due to the fact that Dec. 31 is the deadline for contributions to registered education savings plans (RESPs) and some investors starting to cash into registered retirement savings plans (RRSPs).
“Going into the RRSP season, it is going to be interesting,” he said. “If we see equity markets having some kind of floor we may see people move back into long-term funds.”
Starting in December, the IFIC numbers no longer include statistics from CI Financial Corp. (formerly CI Financial Income Fund), which has opted to no longer submit data to the industry group. Even though CI was not a member of IFIC, it did provide numbers to the organization.
In November, CI said, it posted net sales of $140-million. Mr. Yanchus, however, said that number was all in sales of segregated funds which are not counted by IFIC. “Their mutual funds were in net redemptions,” he said.
CI said Monday it had net sales in December of $142-million and $1.8-billion for 2008, but the company does not break out segregated funds from mutual funds.
Invesco Trimark Ltd. suffered from net outflows of $482-million last month; BMO Financial Group, $292-million; IGM Financial Inc., $286-million and CIBC Asset Management, $215-million.
RBC Asset Management, which also owns Phillips Hager North Ltd., was among a handful of fund companies with net sales. It managed to pull in $680-million, but that was all in money market funds.
Fidelity Investments Canada attracted $250-million in new money; Manulife Investments, $168-million and Dynamic Mutual Funds, $75-million.
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