Total assets of Canadian long-term funds were USD556.7bn at the end of July, an increase of USD9.6bn or 1.8 per cent from June, according to the Investment Funds Institute of Canada.

Since the low point at the end of February, long-term fund assets have increased by a total of USD86.9bn or 21.57 per cent. This was the highest absolute dollar increase for a five month period on record.

Total net sales were -USD1.52bn in July, down from -USD834.7m in June and USD550.2m in July 2008.

Money market fund investors continued to move back into the long-term fund asset classes or into other interest bearing investments (often within the same financial institution) in July which caused money market fund assets to fall by USD3.69bn or 5.2 per cent and money market fund net redemptions to hit USD3.31bn. Money market fund redemptions were partially offset by long-term fund net sales of USD1.78bn.

Long-term fund net sales were down from June (USD1.97bn) but up from July 2008 (-USD747m).

Fund of fund sales were USD747m in July, up from USD622min June and USD413m at this point last year.

The domestic fixed income fund asset class led the way in sales in July at USD793.3m followed by the domestic balanced (USD616.1m), global balanced (USD504.1m) and the global and high yield fixed income (USD310.7m) asset classes.

Month-over-month asset growth in July was positive for all asset classes except the specialty fund p y and money market fund asset classes. The domestic equity fund asset class had the highest month-over-month increase in assets at USD4.06bn or 3.5 per cent.

The Canadian short term fixed income category was the most popular with investors in July attracting USD460.3m in net sales. Canadian short term fixed income funds also led the way in sales year-to-date attracting USD2.9bn since the start of the year.

The global neutral balanced and Canadian neutral balanced fund categories were second and third in terms of fund sales in July at USD385.8m and USD363m respectively.

In the fourth spot and in the top five for the first time since April 2008 was the Canadian fixed income fund category with USD329.5m in sales.

Rounding out the top five was the high yield fixed Income fund category with USD279.5m in net sales. The high yield fixed income fund category had the second highest net sales year-to-date at USD2.54bn.

Pat Dunwoody, vice president, member services and communications at IFIC, says: "We continued to see investors moving back into long-term funds in July. Since the end of February, Canadians have purchased a total of USD5.9bn in long-term funds and at the same time, an estimated USD81bn has been created due to improved market performance.

"This serves as a reminder that although the focus is often on net sales, it is asset growth due to market appreciation or lack of it that determines the strength of the industry and aligns our interest with the investors we serve."