Insight September 2009 Monthly Update

In the funds industry, the end of summer marks the time when planning for the RRSP season and the upcoming year begins in earnest. As the clock counts down to the RRSP season, fund companies also begin to shape their sales expectations for the industry’s top-selling seasonal opportunity. This year, the issue seems to carry substantially more weight as the industry is still reeling from last year’s triple whammy of damaged asset base valuations, a long-term fund sales drought, and elevated redemption volumes. Against this backdrop, the question that is top-of-mind for most fund executives this September may well be not “how much” but “if and when” will investors and their advisors return to investment funds. Will investors’ hearts thaw in time for the RRSP season? The September issue of Insight takes a close look at the industry flow patterns to provide our readers with a fact-based perspective on emerging sales and redemption trends. Our analysis reveals a slow awakening of the sales momentum, for now largely limited to fixed income fund categories and fund wraps. Meanwhile, there is a more pronounced downward trend in redemptions across the long-term fund spectrum. The net result is an improvement in the industry long-term net flow metric, which has now strung together five consecutive months in positive territory. While future sales volumes remain uncertain, and, in any event, not likely to satisfy everyone’s appetite, the rebounding markets are helping ensure that at least some of last year’s more gruesome scenarios for the fund industry’s future are sliding off the table.