Morningstar shows energy rose in September

Nearly two thirds of Morningstar’s fund indices increased during the third quarter

Morningstar shows energy rose in September
The energy sector was among Canada’s best-performing stock sectors last month, according to preliminary September and third-quarter performance data on fund indices from Morningstar Canada.

The Morningstar Energy Equity Fund Index, which measures the aggregate returns of funds in the energy sector, achieved the second-best result for the quarter with a 6.8% increase; that was partly driven by a 10.3% rise in September, which surpassed all other sector-specific fund categories.

The other star sector categories for the quarter were the Natural Resources Equity and Financial Services Equity fund indices, which posted increases of 4.1% and 3.9%, respectively; zeroing in on September, they were up by 3.1% and 4.9%, respectively.

The twin tailwinds of energy and financial services propelled the Canadian Equity Fund Index to 3.1% growth in September, and 3% for the quarter. The Canadian Dividend & Income Equity and Canadian Focused Equity Fund Indices also got a lift, with quarterly increases of 2.3% and 1.7%, respectively.

Looking at funds focused outside Canada, the Greater China Equity Category maintained its dominance in the Canadian marketplace. It was the best-performing fund category for the third quarter, increasing by 8.1% — an impressive record despite its disappointing 0.5% performance last month. The Morningstar US Equity Fund Index matched the S&P 500 Index’s total return of 2.1% in September; however, it underperformed for the quarter with 1.1% versus the benchmark’s 4.5% third-quarter return, largely due to the strengthening of the loonie against the greenback in July.

Only four equity fund indices ended the quarter in the red: the Morningstar Global Infrastructure Equity Fund Index (-0.5%), Real Estate Equity (-0.9%), US Small/Mid Cap Equity (-0.3%), and Global Small/Mid Cap Equity (-1.1%).

The biggest losers, however, were the Canadian Fixed Income, Canadian Inflation-Protected Fixed Income, and Canadian Long Term Fixed Income categories, falling by 1.8%, 3.2%, and 4.3%, respectively in the third quarter. But the Preferred Share Fixed Income index posted decent returns, going up 2%.

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