2021 was a monster year for mutual funds

Annual industry report shows mutual fund net flows rose to highest on record

2021 was a monster year for mutual funds

Amid the continuing toll of the COVID-19 pandemic, the Canadian mutual fund industry posted its largest-ever record for annual net sales last year, according to the Investment Funds Institute of Canada (IFIC).

In its 2021 Investment Funds Report, IFIC said mutual fund net sales totalled $112.6 billion in 2021, which represented an increase of more than 3.5 times over 2020. Mutual fund net sales last year also exceeded total net sales seen over the previous four years combined.

:There are always multiple factors responsible for changes in investor behaviour,” the report said. “However, it is likely that the strong sales year in 2021 was partly driven by the increased savings some households were able to achieve during the pandemic combined with strong equity markets.”

Gross sales of mutual funds also hit its highest-ever level at $383.8 billion in 2021. Mutual fund assets grew by $293.1 billion, spurred by a combination of positive net sales and a positive market effect.

Balanced mutual funds raked in $63 billion in net sales, which made up 56% of total net sales; equity mutual funds, meanwhile, represented a third of net sales for the year with $37 billion. That relatively high level of both balanced fund and equity fund net sales, IFIC said, made 2021 unique compared to the last 10 years when the majority of sales tended to go toward balanced mutual funds.

The report also included figures for ETF net sales, which reached $58.7 billion in 2021. As with mutual funds, that represented the biggest year on record for net sales, as well as a 41% year-on-year increase over 2020.

At the end of 2021, IFIC said Canadian mutual funds held $2.08 trillion in assets, spread across 114 fund companies and 3,298 funds. Meanwhile, ETF assets totalled $347 billion across 40 fund providers and 964 ETFs, slightly off from the 1,177 tallied in National Bank’s Canadian ETF Flows Report.

Get more news about mutual funds here.