TORONTO, Sept. 5, 2012 /CNW/ - The Canadian economy's three largest
sectors -- financials, energy and materials -- all posted solid returns
in August, leading to gains for the investment funds that target those
sectors as well as for broader domestic equity funds. European and U.S.
equity funds also did well for the month, but those that focus on Asian
equity markets had negative results, according to preliminary
performance numbers released today by Morningstar Canada.
By far the best performer among the 42 Morningstar Canada Fund Indices
was the one that follows the Precious Metals Equity category, which saw
a 10.1% increase in August. "Gold and silver turned sharply upward in
the last third of the month, nearly hitting US$1,700 and US$31 per
ounce, respectively. Speculation on additional quantitative easing in
the United States led to demand for the metals, as the prospect of a
weakening dollar meant expectations of rising prices," said Morningstar
Fund Analyst Adam Fisch.
In second place, the Morningstar Natural Resources Equity Fund Index,
which was also the second-best performer in July, had another good
month in August with a 3.1% increase, while the fund index that tracks
the Financial Services Equity category finished the month in fifth
place with a 2.2% increase.
The success of these three industry sectors also meant good news for
funds in the diversified domestic equity categories; the Morningstar
Canadian Equity Fund Index, whose constituent funds allocate on average
nearly three-quarters of their portfolios to these sectors, increased
by 2.4%. Meanwhile, the Canadian Small/Mid Cap Equity, Canadian Focused
Small/Mid Cap Equity, and Canadian Dividend & Income Equity fund
indices saw increases of 2.1%, 1.8%, and 1%, respectively.
South of the border, the S&P 500 Index approached its highest level in
four years, ending the month with a 2.3% gain when expressed in U.S.
dollars. For Canadian investors, this translated into a 1.5% increase
for the Morningstar U.S. Equity Fund Index after accounting for
unfavourable currency effects. Funds in the U.S. Small/Mid Cap Equity
category did even better with an average increase of 2.4% for the
Stock markets in Europe also had a very good month, with France's CAC40
Index leading the way with a 3.7% gain and Germany's DAX Index
following closely with 2.9%. "The European Central Bank's sovereign
bond buying plan has injected some faith into the Eurozone, which
stabilized markets as the end of the month approached," Fisch said. The
Morningstar European Equity Fund Index increased by 2% for the month.
The weakest categories in August were Greater China Equity and Japanese
Equity, which decreased by 4.2% and 3.3%, respectively. "Chinese
manufacturing unexpectedly shrunk during the month, and the
strengthening of the yen created a challenging environment for Japanese
manufacturers," Fisch said. The difficulties in these two countries
also affected the broader Asia Pacific Equity, Asia Pacific ex-Japan
Equity, and Emerging Markets Equity categories, which all finished near
the bottom with decreases of 1.1%, 1.9%, and 1.6%, respectively.
For more on August fund performance, go to www.morningstar.ca.
Morningstar Canada's preliminary fund performance figures are based on
the change in funds' net asset values per share during the month, and
do not necessarily include end-of-month income distributions. Final
performance figures will be published on www.morningstar.ca next week.
Morningstar Research Inc. is a Canadian subsidiary of Chicago-based
Morningstar, Inc., a leading provider of independent investment
research in North America, Europe, Australia, and Asia. The company
offers an extensive line of products and services for individuals,
financial advisors, and institutions. Morningstar provides data on more
than 385,000 investment offerings, including stocks, mutual funds, and
similar vehicles, along with real-time global market data on more than
8 million equities, indexes, futures, options, commodities, and
precious metals, in addition to foreign exchange and Treasury markets.
Morningstar also offers investment management services through its
registered investment advisor subsidiaries and has more than US$186
billion in assets under advisement or management as of June 30, 2012.
The company has operations in 27 countries.
SOURCE: Morningstar Research Inc.
For further information:
Adam Fisch, Fund Analyst, Morningstar Canada, (416) 484-7815; Christian Charest, Editor, Morningstar Canada, (416) 484-7817