(July 6, 2005) Canada’s mutual fund market is still largely concentrated in Ontario, but other regions, particularly Quebec and western Canada, are gaining ground, according to Investor Economics.
The research firm compiled data on mutual fund assets in the country as of March 2005. Ontario has 48% of the market, down 2.5 percentage points from five years ago. Quebec has 16%, followed by British Columbia (13%), Alberta (10%), Manitoba and Saskatchewan (8%), and Atlantic Canada (9.5%).
Ontario’s decline partly reflects the strong presence of independent producers who have lost business due to managed asset programs offered by banks and alternative investments such as structured products and hedge funds, the report said.
Quebec and Western Canada are gaining increasing share, although both regions still show strong growth potential, Investor Economics says, especially Quebec, which is the least penetrated fund market.
Overall, market share increased for Manitoba, Saskatchewan, Alberta, the Atlantic provinces and Quebec, mostly at the expense of Ontario.
Interestingly, Quebec has a healthy, segregated funds industry, with 22% of the country’s market share. “MGA’s strong, established distribution networks and insurance brokers work to Quebec’s advantage in this area, as does the conservative nature of its investors,” the report said.
Ontario generated 67%, or $5.9 billion, of net new sales during the RRSP season. Quebec was second with 17%, or $1.5 billion, while BC was third with 14%, or $1.2 billion.
Investor Economics also tracks the share of investment funds in the entire property market. In 2000, funds accounted for 30% of the Canadian wealth market, but their share has since fallen slightly to 28.4%.
According to Investor Economics, the most “fund-friendly” regions are the prairies and Ontario. Manitoba and Saskatchewan are in the lead, with funds representing over 40% of the wealth market. Ontario is not far behind with 34%. Quebec lags behind in the group at 20%. Its fund market has seen strong growth, but overall wealth has grown at a faster pace.
Submitted by Doug Watt, Advisor.ca, doug.watt@advisor.rogers.com
(07/06/05)
