European equity funds surge

By John Powell | May 3, 2011 | Last updated on May 3, 2011
1 min read

Solid returns on the major European stock and a depreciating Canadian dollar made investment funds in the European Equity category the best performers in Canada last month.

Other foreign equity fund categories also gained in April, while domestic equity funds struggled and ended the month in the red, according to a Morningstar Canada report.

Of the 44 indices tracked by Morningstar Canada, 31 had positive returns in April, including 14 of the 24 indices that track equity fund categories.

The best performer, the Morningstar European Equity Fund Index, gained 5.1% for the month.

“Strong corporate earnings from European firms and impressive manufacturing growth led to broad-based gains across the region’s markets,” said Morningstar fund analyst Nick Dedes. “German companies led the way, pushing the DAX Index up 6.7% for the month. It was also encouraging to see robust results from major luxury good manufacturers and retailers such as LVMH, Burberry, and Christian Dior.”

Also among the leaders were the fund indices that track the International Equity (2.9%), Asia Pacific ex Japan Equity (2.8%), and Global Equity (1.8%) categories. Although these funds have exposure to markets that performed very well last month, currency movements also played a major part.

Domestic equity funds did not have a good month in April, with all six fund indices posting losses ranging from 0.6% for the Morningstar Canadian Dividend & Income Equity Fund Index to 1.3% for the Morningstar Canadian Equity Fund Index.

John Powell