Here are a few benchmarks based on mutual fund industry statistics compiled by the Investment Funds Institute of Canada (IFIC).
Four facts for understanding how Canadians invest in their mutual funds
1. Canadians choose balanced funds above all, followed by equities
In late 2020, Canadians were holding half of their assets in “balanced” funds, i.e. funds that invest in stocks, bonds and cash. The preferred asset class, on the other hand, was equities, with 32% of total assets.
This is a significant change from 10 years ago. At that time, balanced funds accounted for 37% of assets, and equities, 41%.
2. Funds of funds are very popular
Funds of funds are portfolios of funds: each is invested in a number of other funds in order to achieve optimal diversification. The proportion of assets Canadians invest in such funds has doubled in the past ten years.
3. Responsible investment funds are emerging… slowly
Investment funds managed under a responsible investment (RI) policy are gaining in popularity.
However, they still represent a very small proportion of the assets held in mutual funds.
4. In 2020, Canadians continued to show confidence about the markets
Between January 1 and November 30, 2020, Canadians invested a net amount (unit purchases less redemptions) of $23 billion in mutual funds. That’s 68% more than for the same period a year earlier.
However, their confidence was anything but steady during the year. After fleeing to less volatile funds early in the pandemic, they later returned to long-term funds, showing a preference for bond funds.
Contact your mutual fund representative to discuss your mutual fund investments
1. Canadians choose balanced funds above all, followed by equities
In late 2020, Canadians were holding half of their assets in “balanced” funds, i.e. funds that invest in stocks, bonds and cash. The preferred asset class, on the other hand, was equities, with 32% of total assets.
This is a significant change from 10 years ago. At that time, balanced funds accounted for 37% of assets, and equities, 41%.
2. Funds of funds are very popular
Funds of funds are portfolios of funds: each is invested in a number of other funds in order to achieve optimal diversification. The proportion of assets Canadians invest in such funds has doubled in the past ten years.
3. Responsible investment funds are emerging… slowly
Investment funds managed under a responsible investment (RI) policy are gaining in popularity.
However, they still represent a very small proportion of the assets held in mutual funds.
4. In 2020, Canadians continued to show confidence about the markets
Between January 1 and November 30, 2020, Canadians invested a net amount (unit purchases less redemptions) of $23 billion in mutual funds. That’s 68% more than for the same period a year earlier.
However, their confidence was anything but steady during the year. After fleeing to less volatile funds early in the pandemic, they later returned to long-term funds, showing a preference for bond funds.
Contact your mutual fund representative to discuss your mutual fund investments
The following sources were used to prepare this article:
Investment Funds Institute of Canada, “IFIC Monthly Investment Fund Statistics – November 2020”; “Historical data”; “2019 Investment Funds Report.”
