February was the strongest month for mutual fund sales in three years: IFIC

Mutual funds and ETFs both recorded net sales north of $9 billion in February, the Investment Funds Institute of Canada (IFIC) said on Friday.

In its monthly investment fund statistics report, the industry trade group reported that mutual fund net sales came in at $9 billion, up from $3 billion the previous month.

“February saw the highest level of mutual fund net sales since February 2022, marking the eighth consecutive month of positive sales,” IFIC noted.

The bulk of mutual fund inflows were seen in more conservative asset classes, including bond, money-market and balanced funds, while equity funds remained in negative net sales territory, the report said, noting this was likely due to market volatility.

Bond funds received the greatest boost, with $3.1 billion in positive sales. This was slightly down from the $3.3 billion gathered the previous month.

Money-market mutual funds pulled in $2.1 billion in net sales, up from $852 million in January.

Meanwhile, balanced mutual funds moved into positive territory in February, with $1.5 billion in net sales recorded. This was up from $388 million in net redemptions.

And specialty mutual funds gathered $2.5 billion in net sales, up from $1.4 billion a month prior.

These gains were slightly offset by equity mutual funds, which reported $197 million in net redemptions. Still, this was an improvement for the asset class, which recorded $2.1 billion in net redemptions in January.

Mutual fund assets under management (AUM) totalled $2.31 trillion by the end of February, down by $1.2 billion or 0.1% from the month before.

Over the previous 12 months, mutual fund AUM increased by 14.8%.

ETFs, on the other hand, were in positive territory across the board.

“ETF sales were positive across all major asset classes with major inflows fairly evenly distributed between equities and bonds,” the report said.

Equity ETFs dominated inflows, with $4 billion recorded in February. This was down from $4.8 billion the previous month.

Bond ETFs received $3.1 billion in net sales, up from $1.7 billion in January.

Specialty ETFs generated $753 million in net sales, down from $871 million a month earlier.

Meanwhile, money-market ETFs received $1.3 billion in net sales, up from $831 million in January.

ETF AUM grew by 1.1% or $5.8 billion to reach $547.1 billion by the end of February.

On a year-over-year basis, ETF assets grew by 35.5%.