Thirty-six of the 42 Morningstar Canada Fund Indices decreased during September, and 38 were in the red for the third quarter of 2015, including 14 indices that decreased by 5% or more.
Highlights from Morningstar’s September 2015 report.
- Funds that focus on natural resources equities were the worst performers, for both the month and the quarter. The Morningstar Natural Resources Equity Fund Index decreased by 8.6% in September—its fifth consecutive monthly loss—and by 21.1% in the quarter. The second-worst performer for both periods was the Morningstar Energy Equity Fund Index, which dropped 8.3% for the month and 19.1% in the quarter.
- Funds in the Greater China Equity category were flat for the month; the category’s fund index posted a modest 0.1% decrease as market losses on the Hong Kong and Shanghai stock exchanges were offset by the appreciation of Chinese currencies against the Canadian dollar. For the quarter, the Morningstar Greater China Equity Fund Index was the third-worst performer with a 16.4% decrease.
- The best-performing equity fund index for the quarter was European Equity, which decreased by 0.2%. While funds in the category had middle-of-the-pack losses of 2% in September and 4.7% in August, their 6.9% increase in July made them the top-performing fund category in Canada that month.
- The best-performing fund index overall was Global Fixed Income, with a 0.5% increase. In September, the only long-term fund indices to avoid losses were Real Estate Equity, Canadian Inflation-Protected Fixed Income, and Asia Pacific ex-Japan Equity, with increases of 1.6%, 0.5%, and 0.1%, respectively.
- Among sector-diversified equity fund categories, domestic equity funds generally lagged their foreign counterparts. The best-performing fund index in that group was Canadian Dividend & Income Equity, which decreased by 2% in the month and 5.2% in the quarter, while the Canadian Small/Mid Cap Equity fund index was the worst performer among domestic equity fund categories, decreasing 4.2% and 10.7% in the same periods, respectively. Funds in the U.S. Equity and Global Equity categories did relatively well in comparison, decreasing by 2.3% and 3.4%, respectively, for the quarter.