Another $4.5B exits Canadian mutual funds in July

Investors continued to pull their money out of Canadian mutual funds in July.

The latest data from the Investment Funds Institute of Canada (IFIC) showed there was a net redemption of $4.5 billion from equity and bond mutual funds in the month. That follows a net redemption of $10.4 billion in June.

Money market funds, which are generally considered relatively safer assets, saw a modest net inflow.

Earlier this week, Royal Bank of Canada shed some light on where some of that money could be shifting too: Guaranteed investment certificates (GICs).

RBC Chief Financial Officer Nadine Ahn said on a conference call with analysts on Wednesday the bank saw money pulled from its own mutual funds and that “RBC captured a good part of the shift as clients move to GICs during a period of elevated market uncertainty.”

The IFIC data showed mutual fund assets rose 4.3 per cent month-over-month in July to $1.86 trillion.

Meanwhile, exchange-traded funds (ETFs) experienced a net inflow of $1.5 billion last month. Investors gravitated to ETFs focused on fixed income, while equity ETFs saw a net outflow.

ETF assets rose by 5.1 per cent to $303.7 billion, according to the data.

The IFIC collects survey data accounts for about 91 per cent of the mutual fund industry and is complemented by information from Investor Economics.

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