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To: Johnny Canuck who wrote (17712)	9/2/1998 3:52:00 AM
From: Johnny Canuck	Respond to of 69134

Wednesday, September 2, 1998 Tumbling markets gouge billions off Canadian mutual fund industry By SUSAN HEINRICH Mutual Funds Reporter The Financial Post Tumbling markets have wiped billions off the books of mutual fund companies and new sales of funds have slowed considerably in recent days. The drop in the value of stocks around the globe has gouged assets managed by Canadian fund companies, according to James Dancy, financial services analyst at C.M. Oliver Ltd. in Toronto. Dancy estimates the industry lost about 12%, or $35 billion, of its capital in August because of declines. The total invested in funds was $320.08 billion at the end of July. That decline will hurt revenue of fund companies because the management fees are charged as a percentage of the total assets administered. Sales in August were slower than July and have screeched to a halt in the past week. Some funds that have been popular sellers continue to attract money, but have lost some momentum. Dancy estimates overall net sales in August were down by half from July. Early estimates point to Fidelity Investments Canada Ltd. and AIC Ltd. as the top-selling fund groups in August. Neither company experienced net redemptions (when investors sell more fund units than they buy) on any day in the month. Most of the banks also are expected to report overall positive sales for August, although redemptions picked up speed in recent days. CIBC Mutual Funds had net sales of about $20 million in August, president Ted Cadsby said. That includes redemptions of $5 million on Monday when U.S. markets nosedived. Cadsby characterized those redemptions as modest compared with those when markets stumbled in the past. He attributes the difference to an asset allocation program at CIBC that gives investors diversified portfolios. It is believed when all the numbers are in, many of the mid-size fund companies will report lost ground in August, particularly those that have struggled with net redemptions in recent months. Many companies report movement out of equity funds into money market funds. Another sign investors are seeking safety can be seen in the sales at Toronto-based BPI Mutual Funds. BPI president Jim McGovern said the company had net sales of $32 million in August and $20 million of that went into its segregated funds, the Legacy Funds. Those funds "are attracting people who are nervous investors that ... don't like volatility but need the earnings power of equities over time," he said. Segregated funds are similar to mutual funds but guarantee some or all of the principal invested.

To: Johnny Canuck who wrote (17712)	9/3/1998 9:09:00 AM
From: Tom Trader	Read Replies (1) \| Respond to of 69134

Hi Harry -- a belated thanks for your response re my post to the Canadian economy and the information that you forwarded. I have been trying to get a handle on what it is the market is discounting -- it can't be just the effects of Asia and Russia. I began to suspect that it might be Canada and Latin America -- which are major trading partners of the US. If the slow-down hits countries closer to home that the US does a lot of trade with, the earnings projections for next year may come unglued and may be that is what the market is now anticipating as it sells off. In any event, I hope that you are holding up well with this sell-off -- I suspect that we will not see any meaningful recovery until the new year at the earliest. Regards