TORONTO, Oct. 23 /CNW/ - Morningstar Canada, a subsidiary of Morningstar,
Inc. (NASDAQ: MORN), a leading provider of independent investment research,
today reported a summary of institutional pooled fund performance for the
third quarter of 2008. Approximately 90% of the pooled funds in the
Morningstar Canada database had negative returns during the quarter, with the
most severe losses among natural resources funds.
The five pooled funds that make up the Natural Resources Equity category
lost between 29.6% and 36.9% for the quarter, while the one fund in the
Precious Metals Equity category lost 32.8%. The third worst-performing
category was Emerging Markets Equity, where the six constituent funds had a
median loss of 24.9%, followed by the Canadian Small/Mid Cap Equity and
Canadian Focused Small/Mid Cap Equity categories, where the median losses were
23% and 21%, respectively.
All 23 equity-based pooled fund categories had negative median returns
for the quarter, including 18 groups whose losses were in the double digits.
The Canadian Equity category, which contains 135 pooled funds, posted a median
loss of 17.8%, while the median return among the Canadian Focused Equity
category's 33 funds was a 14.2% loss. Funds that target foreign equities also
had a tough time during the quarter. Notably, the European Equity,
International Equity, and Global Equity categories had median losses of 19.4%,
16.6%, and 10.1%, respectively. The U.S. Equity category had the best median
return among diversified equity categories with a 5% loss.
Overall, only three of the 41 pooled fund categories had positive median
returns in the third quarter of 2008. The best-performing group was Canadian
Short Term Fixed Income with a median return of 1%, while Canadian Money
Market and Global Fixed Income gained 0.8% and 0.3%, respectively. Though the
other fixed-income categories were in negative territory, their losses were
tame compared to their equity counterparts: Canadian Fixed Income funds had a
median loss of 0.5%, while High Yield Fixed Income and Canadian Long Term
Fixed Income were down 1.9% and 3.1%, respectively. The worst-performing
fixed-income category was Canadian Inflation Protected Fixed Income, with a
median loss of 9%.
Among individual funds, the best performers for the quarter were London
Life Smaller Company (Mackenzie) and two classes of Mawer U.S. Equity, all of
which returned 4.9%. Of the 1,022 pooled funds tracked by Morningstar Canada,
107 posted positive returns for the quarter, of which 42 were money market
funds and 35 were fixed-income funds. Of those two groups, the best performers
were MFC Global Pooled Short Term and BGI CoreActive Bond with gains of 1.3%
and 4.1%, respectively. At the bottom, PCJ Canadian Small Cap posted the
quarter's worst overall return with a loss of 37.4%.
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 220 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 Sept. 30, 2008, Goodman & Co., Investment Counsel Ltd., a division
of Dundee Wealth Management, is the pooled fund sponsor with the most mandates
earning the highest Morningstar Rating of 5 stars. Goodman has seven funds
bearing Morningstar's top rating out of a total of 18 rated funds. In second
place with six top-rated pooled funds is Mawer Investment Management Ltd.,
while Fidelity Investments Canada ULC ranks third with five top-rated funds.
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 Canada and Morningstar, Inc.
Morningstar Canada 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 280,000 investment offerings, including
stocks, mutual funds, and similar vehicles. The company has operations in 18
countries and minority ownership positions in companies based in three other
For further information:
For further information: Scott Mackenzie, President and CEO, Morningstar
Canada, (416) 484-7800; Christian Charest, Associate Editor, Morningstar
Canada, (416) 484-7817