Post by kelvin on Oct 8, 2008 21:05:36 GMT -5
www.theglobeandmail.com/servlet/s..../BNStory/Front/
SHIRLEY WON
Globe and Mail Update
October 2, 2008 at 6:19 PM EDT
Canadian investors, rattled by sinking stock markets and worried about the safety of their money market investments, yanked a whopping $4.6-billion from their mutual funds in September.
It marked the biggest month for net redemptions suffered by the domestic industry since the Investment Funds Institute of Canada began collecting data in 1990.
The second highest month for net outflows was $1.7-billion in April, 2003. The last time the industry saw investors pulling money out was in August, 2007, when they withdrew $1.5-billion on fears about money market funds holding troubled asset-back commercial paper.
“A bubble has burst,” and investors fear that they are going to see a further deterioration of their savings, independent fund analyst Peter Loach said in an interview.
Stock markets have tanked in the wake of a severe U.S. financial crisis that has led to venerable institutions like Lehman Brothers failing, while the credit crunch has led to fears of slowing global growth.
The S&P/TSX composite index plummeted 15 per cent in September, for a year-to-date loss of 17 per cent. In the United States, the S&P 500 index sank 9 per cent, for a year-to-date loss of 21 per cent.
The net redemptions for September are estimated to be between $4.4-billion and $4.9-billion, according to preliminary estimates released Thursday by IFIC. About half of the net outflows was in money market funds.
Some Canadian investors have become worried about holding money market funds after seeing a wave of U.S. investors withdrawing cash from these kinds of investments last month south of the border.
That occurred after some U.S. money market funds were hit with losses and redemptions because they held commercial paper of troubled financial firms such as Lehman, which filed for bankruptcy protection.
While the U.S. government announced measures to backstop U.S. money market funds, Canadian securities regulators have launched a review of domestic money market funds to assess whether they are exposed to bad debt as result of the current turmoil.
RBC Investment Management, which also owns Phillips Hager & North Investment Management, suffered from $1.28-billion in net redemptions last month. TD Asset Management had net outflows of $1.15-billion, while CIBC Asset Management posted net redemptions of $536-million
Among the independent fund companies, Invesco Trimark Ltd., formerly AIM Funds Management Inc., suffered from $510-million in net redemptions; Franklin Templeton Investments Corp., $346-million; IGM Financial Inc., which owns Investors Group and Mackenzie Financial, $182-million; and AGF Management Inc., $167-million.
Some fund companies, however, managed to attract net sales. Fidelity Investments Canada ULC brought in $134-million; CI Financial Income Fund, $152-million; and Dynamic Mutual Funds Ltd., $70-million.
SHIRLEY WON
Globe and Mail Update
October 2, 2008 at 6:19 PM EDT
Canadian investors, rattled by sinking stock markets and worried about the safety of their money market investments, yanked a whopping $4.6-billion from their mutual funds in September.
It marked the biggest month for net redemptions suffered by the domestic industry since the Investment Funds Institute of Canada began collecting data in 1990.
The second highest month for net outflows was $1.7-billion in April, 2003. The last time the industry saw investors pulling money out was in August, 2007, when they withdrew $1.5-billion on fears about money market funds holding troubled asset-back commercial paper.
“A bubble has burst,” and investors fear that they are going to see a further deterioration of their savings, independent fund analyst Peter Loach said in an interview.
Stock markets have tanked in the wake of a severe U.S. financial crisis that has led to venerable institutions like Lehman Brothers failing, while the credit crunch has led to fears of slowing global growth.
The S&P/TSX composite index plummeted 15 per cent in September, for a year-to-date loss of 17 per cent. In the United States, the S&P 500 index sank 9 per cent, for a year-to-date loss of 21 per cent.
The net redemptions for September are estimated to be between $4.4-billion and $4.9-billion, according to preliminary estimates released Thursday by IFIC. About half of the net outflows was in money market funds.
Some Canadian investors have become worried about holding money market funds after seeing a wave of U.S. investors withdrawing cash from these kinds of investments last month south of the border.
That occurred after some U.S. money market funds were hit with losses and redemptions because they held commercial paper of troubled financial firms such as Lehman, which filed for bankruptcy protection.
While the U.S. government announced measures to backstop U.S. money market funds, Canadian securities regulators have launched a review of domestic money market funds to assess whether they are exposed to bad debt as result of the current turmoil.
RBC Investment Management, which also owns Phillips Hager & North Investment Management, suffered from $1.28-billion in net redemptions last month. TD Asset Management had net outflows of $1.15-billion, while CIBC Asset Management posted net redemptions of $536-million
Among the independent fund companies, Invesco Trimark Ltd., formerly AIM Funds Management Inc., suffered from $510-million in net redemptions; Franklin Templeton Investments Corp., $346-million; IGM Financial Inc., which owns Investors Group and Mackenzie Financial, $182-million; and AGF Management Inc., $167-million.
Some fund companies, however, managed to attract net sales. Fidelity Investments Canada ULC brought in $134-million; CI Financial Income Fund, $152-million; and Dynamic Mutual Funds Ltd., $70-million.