June 2022 sees billions in investor withdrawals from Canadian mutual funds

According to the most recent information from IFIC, investors withdrew their funds from stock, bond, and balanced mutual funds last month, while money market funds witnessed a net inflow of $1.3 billion as they chose to seek refuge in haven assets.

The massive redemptions occurred at a time when market volatility and investor anxiety were at an all-time high in June.

Stocks were negatively impacted by factors such as rising interest rates, worries about a future recession, stubbornly high inflation, and worries about how corporate earnings would fare in the challenging economic climate.

“If a number of people are panicking and selling, then the mutual fund manager will need to sell companies and investments (all of which they like as investments) to free up cash for redemptions,” Tiffany Woodfield, a portfolio manager at Raymond James’ SWAN Wealth Management, said.

Approximately 91% of the assets in the mutual fund business are represented by data from the IFIC survey, which is supplemented with data from Investor Economics.