Twenty-nine of the 44 Morningstar Canada fund indexes increased during Q3 2017, with 11 indexes increasing by 2% or more. Also, five of the 15 fund indexes with negative results were down by 1% or more.

Here are additional findings from Morningstar Research Inc.:

  • The best-performing fund index for the third quarter was the one that tracks the Greater China Equity category, which increased 8.1%. This fund category has dominated the Canadian marketplace since the beginning of the year, including chart-topping performances in July and August, but its September result was a middling 0.5%.
  • Three sector-specific fund categories were among the top performers. The Morningstar Energy Equity Fund Index had the second-best result for the quarter with a 6.8% increase, which included a 10.3% increase in September that was the best among all categories for the month. The Natural Resources Equity and Financial Services Equity fund indexes followed with increases of 4.1% and 3.9%, respectively, for the quarter and were ranked third and second for the month of September, up 3.1% and 4.9%, respectively.
  • Aided by strong results in the energy and financial services sectors, funds that invest in Canadian stocks had a solid month in September, and ended the quarter among the best performers. The Morningstar Canadian Equity Fund Index, which has struggled so far in 2017, increased 3.1% for the month and 3.0% for the quarter, while the Canadian Dividend & Income Equity and Canadian Focused Equity fund indexes were up 2.6% and 2.5% for the month, and 2.3% and 1.7% for the quarter, respectively.
  • The Morningstar U.S. Equity Fund Index increased 2.1% for the month, matching the S&P 500 Index’s total return. For the quarter, the fund index underperformed with a 1.1% increase, compared to a 4.5% total return for the benchmark, owing to a significant appreciation of the Canadian dollar against its U.S. counterpart in July. Currency effects were minimal in August and September.
  • Only four fund indexes representing equity categories were in the red for the quarter, two of which are comprised of sector-specific funds. The Morningstar Global Infrastructure Equity Fund Index was down 0.5% for the three-month period, while Real Estate Equity was down 0.9%. The other two losing fund indexes were U.S. Small/Mid Cap Equity and Global Small/Mid Cap Equity, which decreased 0.3% and 1.1%, respectively.
  • The biggest losers in the third quarter were fixed-income fund categories, with four of eight fund indexes ending the period in negative territory. The fund indexes that track the Canadian Fixed Income, Canadian Inflation-Protected Fixed Income, and Canadian Long Term Fixed Income categories decreased 1.8%, 3.2%, and 4.3%, respectively. The best-performing fund indices within the fixed-income asset class were Preferred Share Fixed Income, up 2.0%, and High Yield Fixed Income, up 0.8%.

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