The Investment Funds Institute of Canada (IFIC) released its 2023 Investment Funds Report, January 31, which shows investors retreating to more conservative investments.
“At the end of 2023, mutual fund assets were up by seven per cent from 2022, despite total net redemptions. Exchange-traded fund (ETF) assets were up by 22 per cent from 2022, reaching their highest total ever at the end of the year,” IFIC stated in an announcement about the publication’s release.
At the end of 2023, Canadian mutual fund assets were $1.936-trillion, an increase of seven per cent, while ETF assets sat at $382-billion, a 29.1 per cent jump in assets. ETFs enjoyed net sales of $37.6-billion during the year. Conversely, mutual funds saw net redemptions worth $57.1-billion – the largest annual net redemption figure on record in dollar terms and the second consecutive year of net redemptions, they add.
Interestingly, responsible investment (RI) mutual fund assets reached $40-billion during the year, while RI ETF assets were $16.3-billion. RI fund sales and RI ETF net sales were $538-million and $4.8-billion, respectively.
That said, investors generally retreated to more conservative investments during the year. “Money market funds are a very small part of the Canadian fund industry, however associated with the rise in interest rates, the money market asset category saw the largest relative growth compared to all other asset categories,” they write. “In 2023, money market mutual fund assets grew by 48 per cent and money market ETF assets grew by 56 per cent.” Later, they add that long term fund sales were negative in 2023 while personal fixed term deposits grew by $141.8-billion or 25.9 per cent.
The number of companies offering mutual funds at the end of 2023 increased to 120. The total number of funds on offer in Canada was 3,384 at the end of the year. ETF firms also increased to 41 during the year; 33 out of 41 companies offer both ETFs and mutual funds. The total number of ETF funds on offer at the end of the year was 1,126.
