Natural resources bolstered Canadian equity funds in April

By Staff | May 3, 2016 | Last updated on May 3, 2016
2 min read

Twenty-three of the 42 Morningstar Canada Fund Indices Indices increased during April, though only 10 of these indices increased by 1% or more. Ten fund indices decreased more than 1%—all of which track foreign equity categories.

Here are some highlights from Morningstar’s April 2016 report.

  • Precious Metals Equity fund index posted an increase of 26.8%, following its chart-topping 35.4% increase in the first quarter of 2016. The Morningstar Precious Metals Equity Fund Index has had positive monthly results each month so far this year, and is currently up 71.8% for the year-to-date.
  • The second-best-performing fund index was Natural Resources Equity, with an increase of 13.6%. This fund index was also the second-best performer in the first quarter with an increase of 9.9%. Funds in this category have exposure to both the basic materials sector, which contains precious metals, and the energy sector. The Morningstar Energy Equity Fund Index also did well in April with an 8.5% increase, ranking third.
  • The Canadian Small/Mid Cap Equity and Canadian Equity fund indices increased 4.8% and 2.4%, respectively. However, these numbers significantly lag their respective benchmarks: the S&P/TSX Small Cap Index was up 12.4% in April, while the S&P/TSX Composite Index increased 3.7%. Varying performance within each sector of the Canadian market meant individual fund portfolio positioning had a large effect on last month’s performance.
  • All fund indices that track foreign equity categories were down last month, owing to weak—though mostly positive—market performance and adverse currency effects. The worst-performing fund indices were Asia Pacific Equity, Greater China Equity, and Asia Pacific ex-Japan Equity, which decreased 2.8%, 3.8%, and 4%, respectively.
  • In the U.S., the S&P 500 Index was up 0.4% for the month, but the Canadian dollar appreciated by 3.4% against the U.S. dollar, resulting in a 2.2% decrease for the Morningstar U.S. Equity Fund Index. The story is similar in Europe, where stock market indexes in France, Germany, and the U.K. all increased approximately 1% when measured in local currencies; however, the loonie’s appreciation of 2.9% against the euro and 1.6% against the pound resulted in a 1.7% decrease for the Morningstar European Equity Fund Index.
  • All balanced and target-date fund indices had muted performance last month, with results ranging from a 0.8% increase for the Morningstar Canadian Equity Balanced Fund Index to a 0.7% decrease for the Morningstar 2025 Target Date Portfolio Fund Index. staff


The staff of have been covering news for financial advisors since 1998.