RRSP season unkind to Kevin O'Leary's fundraising hopes

Now that the 2013 RRSP season is in the books, we can check in on how well Kevin O’Leary is managing to stem the steady leak of his fund company’s assets (see prior post “O’Leary Funds appear to shed another 20% of assets in 2012” Jan. 27-13). According to the O’Leary website, here are their Closed End Fund assets under management as of April 2013 as compared to March 2012:

Canadian Diversified Income Fund: $24.6 million (just launched in Jan. 2012)
Floating Rate Income Fund: $42.1 million vs. $60.72 million
U.S. Strategic Yield Advantaged Fund: $63.2 million vs. $93.51 million
Yield Advantaged Convertible Debentures Fund: $118.4 million vs. $147.36 million

Add that up, and Mr. O’Leary has dropped $77.89 million of Closed End fund assets over the year, on a base of $326.19 million as at March 31, 2012. That’s a 24% reduction. The leakage has slowed since December 2012, with shrinkage of just 14% (from $288.4 million to $248.3 million) over the prior four months as of April 2013, according to the individual fund monthly reports.

Some of those assets may have migrated over to O’Leary’s mutual fund family. As at the end of April, O’Leary mutual fund assets sat at $703.2 million, as compared to $672.7 million on Dec. 31., 2012. According to IFIC, “Industry net sales for April 2013 were $3.73 billion and year-to-date net sales were $22.7 billion”; Stanton Asset Management isn’t listed as a data contributor. A $31 million increase in assets is nothing to sneeze at. Mind you, even if KO had sold not a single new unit during that period, his asset base should have risen by twice that amount merely on the back of a 12.02% gain in the S&P 500 during the first four months of 2013.

For those who are trying to track the sustainability of O’Leary’s fund company, here are the key figures to watch:

Assets Under Management

Dec. 31/11: $1.2 billion (according to O’Leary interview with the Globe and Mail)
Dec. 31/12: $961.1 million (from O’Leary website)
Apr. 30/13: $951.5 million (from O’Leary website)

The S&P 500 is up 29.7% between Dec. 31, 2011 and today. Total Canadian mutual fund assets have increased by $99.6 billion, or 12.3%, since April 2012. O’Leary’s AUM are down 21% over the past 16 months despite the good industry sales figures and a rising market backdrop.

The music hasn’t stopped playing just yet, but the band’s bus driver has gone to the parking lot to put the key in the ignition.

MRM
(disclosure: this post, like all blogs, is an Opinion Piece)