Morningstar data reveals equity fund performance in Canada

Preliminary September and third-quarter 2016 performance data for Canadian funds released

If preliminary September and third-quarter 2016 performance data from Morningstar Research is affirmed, Canadian funds have been getting positive returns. According to a recent news release, 43 of the 44 Morningstar Canada Fund Indices have shown increases during the quarter ending Sept. 30, with 14 increasing by at least 5%.

Of the 22 indices that track equity categories, all but one showed positive results for Q3, with most indices rising between 4% and 8%. The greatest increase – a 14.6% rise – was observed in the index tracking the Greater China Equity category. The strong performance of Chinese equities lifted funds in the Emerging Markets Equity, Asia Pacific Equity, and Asia Pacific ex-Japan Equity categories as well, with their respective fund indices rising by 9.1%, 8.8%, and 7.8%.

Zeroing in on Canada, the S&P/TSX Composite Index experienced three consecutive months of increases, with energy and financial services being the biggest contributors. The Morningstar Canadian Equity Fund Index increased 5.3% in Q3. Among domestic equity fund indices, Canadian Small/Mid Cap Equity, Canadian Dividend & Income Equity, and Canadian Focused Equity categories rose 5.1%, 4.8%, and 4.6%, respectively – all outdone by 5.5% increase of the Canadian Focused Small/Mid Cap Equity Fund Index.

Collectively, funds in the US equity category posted a 4.7% Q3 increase, tracking the 3.9% increase in the S&P 500 Index and a 0.8% appreciation of the greenback against the loonie. European Equity funds were among the best third-quarter performers despite weak-but-positive European markets in August and September.

Fixed-income funds saw marginal movement in September, as most fund indices rose between 0.1% and 0.3%. For the quarter, all fixed-income categories were positive: the Canadian Short Term Fixed Income Fund Index posted the smallest increase at 0.4%, while the Preferred Share Fixed Income Index rose by 4.6%.

The worst-performing fund index for both the month and the quarter was for the Real Estate Equity Category, which experienced a dip of 0.7% in September and 1.3% for the quarter.

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