09/15/2011 05:41 EDT | Updated 11/15/2011 05:12 EST

Mutual fund sales plummet in August

The sale of mutual funds plummeted in August as Canadians held off on investing in them due to the turmoil in the stock market.

The Investment Funds Institute of Canada reported Thursday that sales exceeded redemptions by $205 million last month, a 64 per cent drop from net sales of $566 million in July.

Net sales fell 33 per cent from $306 million a year earlier.

Investors moved into bond funds, with sales rising to $1.26 billion from $99.8 million in July.

Stock fund sales tumbled sharply, the industry organization said, reporting $1.6 billion in redemptions compared with $964 million in redemptions in July.

Investors also pulled cash out of money market funds with $4.5 million in net redemptions compared with $36.4 million in net sales in July.

Balanced fund net sales sank to $479 million in August from $1.29 billion the previous month, IFIC said.

Total funds under management for August were $778.6 billion, down two per cent from July.