UPDATE 1-IGM Financial says investors becoming more upbeat

Fri Oct 30, 2009 11:12am EDT

* Optimism not yet translating into big investments

* IGM says not actively looking for acquisitions

* Shares down 1.5 percent

By Andrea Hopkins

TORONTO, Oct 30 (Reuters) - IGM Financial Inc (IGM.TO), Canada's No. 2 mutual fund manager, said on Friday it feels investors are becoming more upbeat but even that optimism is not yet translating into big investments.

Winnipeg, Manitoba-based IGM said while business at its adviser-led mutual fund outlets is better than in the spring, when investors were paralyzed by the market downturn and fears about the economic crisis, volume has not yet come back to pre-recession levels.

"The sentiment that we're hearing (from our advisers) ... is one of becoming more upbeat. I think the hesitation and paralysis description in March, April, May has turned to more of cautious optimism," Murray Taylor, co-president and chief executive of IGM, told analysts on a conference call.

"I'm not sure that cautious optimism has caused people ... to write big checks, but I think they are certainly starting to feel that maybe the worst is behind us from an economic point of view. But that is cautioned by the fact their relatives may still be facing unemployment."

IGM said on Thursday that its third-quarter profit fell to C$167.4 million ($156.4 million), or 63 Canadian cents a share, from C$198.7 million, or 75 Canadian cents a share, a year ago.

Analysts polled by Thomson Reuters I/B/E/S had expected, on average, a profit of 63 Canadian cents a share.

The company's shares were down 1.5 percent at C$38.62 on the Toronto Stock Exchange on Friday morning.

Total assets under management inched lower, and gross revenue fell 9 percent in the quarter.

Co-President and Chief Executive Charlie Sims said the company, which is controlled by Power Financial Corp (PWF.TO), is comfortable with its financial position right now, and is not looking at any acquisitions.

"We have not been active in looking at expanding the business via acquisitions for obvious reasons in the marketplace, but that is something we will continually look at," Sims said.

"I think we're comfortable with where the balance sheet is when you look at the overall structure, and what we have panning out into the future."

($1=$1.08 Canadian) (Reporting by Andrea Hopkins; editing by Rob Wilson)

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