Facts, Facts and More Facts: June 2012 Fund Industry Wrap-up

Bolstered by higher equity valuations, long-term mutual fund assets rose 1.2% or $9.8 billion to end June 2012 at $804 billion. Assets are up 4.6% in the year-to-date, although they remain below their all-time high of $819 billion reached in March 2012.

Long-term mutual funds attracted $1.1 billion in net flows during June 2012, down from $1.4 billion during the previous month. In the wake of a milder 2012 RRSP season, the first half of 2012’s intake trailed last year’s mid-year result by roughly $3 billion.

Inflows into fixed income funds remained strong. The category finished as the best-selling major asset category for the tenth consecutive month with inflows of $1.8 billion. Mutual funds of funds (MFoFs), an increasingly important driver of mutual fund sales, accounted for just over 40% of the net flows into the broad fixed income category. Fund wrap rebalancing activities at one of the Big Six banks helped Canadian short-term bond funds capture half of the category inflows.

Fixed income funds are off to their best sales start on record. The category has received more inflows during the first six months of the 2012 than during the same period in any other year in our database (going back to 1991!). So far this year, fixed income funds received a record $15.8 billion in inflows, easily eclipsing the previous high of $8.7 billion that flowed into fixed income funds during the first six months of 2010.

MFoFs remain the largest source of inflows for the mutual fund industry. These preassembled advice solutions—which wrap primarily mutual funds and, to a lesser extent, ETFs, bonds and stocks—attracted $1.7 billion in inflows in June, with $1.5 billion being invested directly into mutual funds. In the year-to-date MFoFs have generated $11.3 billion for long-term mutual funds versus the $6.3 billion coming in the form of stand-alone fund sales.

ETF assets jumped $2.0 billion to finish June at $49.5 billion, buoyed mostly by $1.7 billion in net creations which ranks as the best monthly sales result so far in 2012. Since the beginning of the year ETFs have witnessed net creations of $7.1 billion, with a relatively even split coming from equity and fixed income funds at $3.5 billion and $3.3 billion a piece.

For more details see the upcoming July2012 issue of Insight Advisory Service http://investoreconomics.com/issue/insight-advisory-service. Posted by Sandeep Gosal Sandeep@iei.ca.