TORONTO, April 29 /CNW/ - Morningstar Research Inc., the Canadian
subsidiary of Morningstar, Inc. (NASDAQ: MORN), a leading provider of
independent investment research, today reported a summary of institutional
pooled fund performance in Canada for the first quarter of 2009. Despite
strong returns in March, only 28% of the pooled funds in the Morningstar
Canada database managed to post positive returns for the quarter, with most
gains in the fixed-income categories.
More than 98% of Canadian pooled funds were up in March. Notably, more
than half of the equity funds tracked by Morningstar gained 7% or more. But
these results weren't enough to overcome the losses suffered by most funds in
the quarter's first two months. As a result, 87% of equity funds and 89% of
balanced funds posted losses for the quarter. However, the damage was much
less severe compared to the previous quarter.
Domestic equity funds generally fared much better than their foreign
counterparts. The Canadian Equity category, which contains 138 pooled funds,
had returns ranging from a 5.3% gain to a 10.3% loss, with a median loss of
2%. The median return among the Canadian Focused Equity category's 39 funds
was a 3.5% loss. Meanwhile, the Global Equity, U.S. Equity, and European
Equity categories had median losses of 8.1%, 8.4%, and 10%, respectively, for
the quarter. Among the larger fund groups, the worst-performing category was
International Equity, whose 83 pooled funds lost between 0.1% and 19.3%, with
a median loss of 11.2%.
Overall, 13 of the 41 pooled fund categories had positive median returns
in the first quarter of 2009, with the best performances coming from two
sector-specific equity categories. The five funds that make up the Natural
Resources Equity category had a median gain of 8.8%, with individual returns
ranging from a 4.2% loss for Fidelity Global Natural Resources to a 30.5% gain
for Goodman Natural Resource Equity, which was also the best performer among
all pooled funds in Canada for the quarter. Meanwhile, the one fund in the
Precious Metals Equity category-Goodman Precious Metals Equity-gained 23.5%,
ranking second overall. Three other pooled funds posted double-digit gains for
the quarter: Acuity Pooled 130/30 (17.6%), London Life Canadian Resources -
AGF (11%), and HSBC U.S. High Yield Bond Pooled (10.2%).
Of the 294 pooled funds that had positive results in the first quarter,
133 were fixed-income funds, representing nearly 89% of funds that target that
asset class. In the core Canadian Fixed Income category, all but one of the 84
constituent funds posted gains. The best performer in that category was Natcan
Corporate Bond with a 4.2% gain, while the only negative-performing fund was
Leith Wheeler Fixed Income, down 0.2%. The worst returns among bond funds were
in the Global Fixed Income category, where 11 of 30 funds had losses. The
bottom performer in that category was TD Emerald Global Government Bond Index,
down 4% for the quarter.
Morningstar Canada releases performance figures for pooled funds on the
13th business day of each month through its Principia for Pooled Funds
software. Principia is a pension fund research and presentation tool that
delivers comprehensive analysis for more than 1,000 Canadian institutional
investment funds and 222 market indices, benchmarks, averages, and medians.
Its extensive coverage of the Canadian institutional fund market is
complemented by Morningstar Canada's unique holdings database.
Morningstar Ratings Update
As of March 31, 2009, three pooled fund sponsors are tied for having the
most mandates earning a 5-star Morningstar Rating. Burgundy Asset Management
Ltd., Goodman & Co. Investment Counsel Ltd., and Mawer Investment Management
Ltd. each have five funds bearing Morningstar's top rating. About 78% of the
1,055 pooled funds in Morningstar's database currently receive a rating.
The Morningstar Rating is an objective, quantitative measure of a fund's
historical risk-adjusted performance relative to other pooled funds in its
category. Only funds with at least a three-year track record are considered.
Funds are rated on the basis of three-, five-, and 10-year track records, as
available, which are then combined for an overall rating. A fund can only be
rated if there are a sufficient number of funds in its peer group to allow
comparison for at least three years.
About Morningstar Research Inc.
Morningstar Research Inc. is the Canadian subsidiary of Chicago-based
Morningstar, Inc., a leading provider of independent investment research. The
company offers an extensive line of Internet, software, and print-based
products and services for individuals, financial advisors, and institutions.
Morningstar provides data on more than 300,000 investment offerings, including
stocks, mutual funds, and similar vehicles, along with real-time global market
data on more than 4 million equities, indexes, futures, options, commodities,
and precious metals, in addition to foreign exchange and Treasury markets. The
company has operations in 19 countries and minority ownership positions in
companies based in three other countries.
For further information:
For further information: Christian Charest, Associate Editor,
Morningstar Canada, (416) 484-7817