A Negative Start to 2016 for Most Equity Fund Categories in January, Morningstar Canada Data Show

TORONTO, Feb. 2, 2016 /CNW/ -- Morningstar Research Inc., a Canadian subsidiary of Chicago-based independent investment research provider Morningstar, Inc. (NASDAQ: MORN), today released preliminary January 2016 performance data for its 42 Morningstar Canada Fund Indices, which measure the aggregate returns of funds in various standard categories. Only seven of the 42 Fund Indices—including one equity fund index—increased during the month, while 18 indices decreased by 2% or more.

Highlights from Morningstar's January 2016 preliminary performance data report include:

  • The month's top-performing fund index, and the only one representing an equity fund category to post an increase in January, was the one that tracks the Precious Metals Equity category, which increased 5.4%. The other 20 equity fund categories were all in the red.
  • Domestic equity funds generally outperformed foreign equity funds in January. The best-performing domestic equity fund category was Canadian Dividend & Income Equity with a 0.8% decrease. The fund index that tracks the more broadly based Canadian Equity category was down 1.4%, reflecting the 1.2% decline of the S&P/TSX Composite Index for the month. The worst-performing domestic equity fund indices were Canadian Focused Small/Mid Cap Equity and Canadian Small/Mid Cap Equity, which decreased 4.1% and 4.4%, respectively.
  • The Morningstar U.S. Equity Fund Index decreased 4.5%, ranking fifth from the bottom of the 42 Fund Indices. Currency effects once again helped Canadian investors who hold unhedged U.S.-dollar investments, as the Canadian dollar depreciated by 1.7% against the greenback. This mitigated the 5.0% drop in the S&P 500 Index, when measured in U.S. dollars. The Morningstar U.S. Small/Mid Cap Equity Fund Index was also one of the worst performers in January, with a 4.4% decrease.
  • Exposure to China hugely detracted from performance among foreign equity funds, as the Shanghai Composite Index and Hong Kong's Hang Seng Index decreased by 22.6% and 10.2%, respectively, in local currencies. The worst-performing equity fund indices were the ones that track the Greater China Equity and Asia Pacific ex-Japan Equity categories, down 10.3% and 6.7%, respectively. Other poor performers include the Morningstar International Equity Fund Index, with a 4.6% decrease, and Asia Pacific Equity and Emerging Markets Equity, which were both down 3.9%.
  • Three of the seven fixed-income fund categories tracked by Morningstar posted modest gains last month. The Morningstar Canadian Long Term Fixed Income Fund Index was up 0.5%, while the Global Fixed Income and Canadian Fixed Income fund indices increased by 0.2% and 0.1%, respectively. The worst fixed-income performer—and worst category overall—was Preferred Share Fixed Income, which decreased 10.7%.

To view the complete report about Morningstar's preliminary January 2016 performance data for Canadian funds, please visit http://ow.ly/XOnSv.

Morningstar Canada's preliminary fund performance figures are based on 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.

About Morningstar Research Inc. and Morningstar, Inc.
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 individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. Morningstar provides data on more than 500,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 17 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 investment advisory subsidiaries, with more than US$170 billion in assets under advisement or management as of Sept. 30, 2015. The company has operations in 27 countries.

©2016 Morningstar, Inc. All rights reserved.


Media Contact:
Christian Charest, +1 416-484-7817 or christian.charest@morningstar.com

SOURCE Morningstar Research Inc.

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