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Stand-alone funds out of favour in January

By Andrew Rickard | February 23 2016 01:42PM

The Investment Funds Institute of Canada (IFIC) has released sales statistics for January, and they show that net redemptions came to $80 billion last month. The decline was due to investors cashing in their stand-alone funds, which they abandoned in favour of fund-of-fund products.

IFIC points out that while overall assets under management (AUM) decreased by 1.9% to $1,208 billion in January, 99.6% of this drop was due to the decline in the stock markets. The sales figures, however, show that investors are abandoning stand-alone funds in droves. While net sales for the fund-of-fund category came to $2.54 billion, this was more than offset by net redemptions of stand-alone funds which reached $2.62 billion in January. This comes on top of the $1.67 billion of redemptions that were reported for the stand-alone fund category in December.

Equity funds suffered

Overall, equity mutual funds were the ones that suffered. While balanced, bond, speciality, and short term funds saw net sales of roughly $471.2 million, $276.7 million, $52.2 million, and $453 million respectively, investors sold off their equity funds in January for net redemptions totalling $1.332 billion.

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