Advisors attempting fund sales during the hot days of summer may be wasting their time, with data confirming a significant drop-off as we headed into June.
Mutual fund assets are growing from 2012, but activity in the Canadian market slumped month-on-month in June as the summer weather brought its usual slowness. Perhaps it's a good time for advisors to take a vacation.
“In May, June, July and August you can’t get hold of people,” a Mississauga advisor told WP. “I remember when we just started in the business we decided that July and August would just be time to regroup and work on the business because we found ourselves – I wouldn’t say wasting time – but we were spending too much time trying to track people down.”
The Investment Funds Institute of Canada (IFIC) said total mutual fund assets under management (AUM) for June 2013 were $907.0 billion, down 1.5% from $920.5 billion in the previous month. However, since June 2012, total mutual fund assets have increased by $109.1 billion, or 13.7%.
The IFIC said total net sales for June were $2.21 billion, down from $3.85 billion in the previous month but more than double the net sales of $1.02 billion in June 2012.
Balanced fund net sales in June 2013 totalled $2.48 billion compared to net sales of $11.7 billion in May. Year-to-date net sales for balanced funds totalled $33.8 billion compared to net sales of $15.6 billion for the same period last year.
Fixed-income funds continued to lose appeal, although the pace of redemptions slowed month-on-month. Bond fund net redemptions totalled $459.3 million in June compared to net redemptions of $3.17 billion in May. Year-to-date net redemptions for bond funds totalled $808.7 million compared to net sales of $10.2 billion for the same period last year.
Equity fund net redemptions in June 2013 totalled $127.8 million compared to net redemptions of $4.09 billion in the previous month. Year-to-date net redemptions for equity funds totalled $2.85 billion compared to net redemptions of $6.83 billion for the same period a year earlier.