Weak December closes poor year for mutual funds

Plunging markets led investors to continue pulling money out of long-term funds last month as equity funds, balanced funds, bond funds and specialty funds all experienced weakness.

A total of $1.03 billion was pulled out of equity funds in December, bringing net redemptions for the year to $12.22 billion.

For all of 2008, $14.2 billion came out of long-term funds.

Short-term funds, on the other hand, saw $1.79 billion flow in during December. For all of 2008, short-term funds, such as money market funds, added $14.3 billion.

Industry assets under management at the end of December were $507 billion, up from $505.3 billion in November. However, that was well below the $636.8 billion that was under management at the end of December 2007.

IFIC's numbers take into account the withdrawal from the group last month of CI Financial Corp., one of Canada's largest fund operators.