Mutual Funds Bounce Back in October, Led by Natural Resources Equities, Morningstar Canada Data Show

TORONTO, Nov. 3, 2015 /CNW/ -- Morningstar Research Inc., a Canadian subsidiary of Chicago-based independent investment research provider Morningstar, Inc. (NASDAQ: MORN), today released preliminary October 2015 performance data for its 42 Morningstar Canada Fund Indices, which measure the aggregate returns of funds in various standard categories. Thirty-nine of the 42 Fund Indices increased during the month, including 19 indices that increased by 3% or more.

Highlights from Morningstar's October 2015 preliminary performance report include:

  • Funds that focus on energy and natural resources equities, which were the worst performers in the third quarter of 2015, were the best performers in October. The Morningstar Energy Equity Fund Index, which dropped 19.1% in the third quarter, increased by 6.9% last month, while the Morningstar Natural Resources Equity Fund Index increased by 6.5% in October after falling by 21.1% in the previous quarter.
  • Funds in the Greater China Equity category recouped some of their previous losses with an aggregate gain of 6.2%. The Shanghai Composite Index was up 10.8% in October while the Hang Seng Index was up 8.6%, but market gains were partly offset by the Canadian dollar's appreciation of 1.7% and 2.4% against the Chinese renminbi and the Hong Kong dollar, respectively.
  • The only fund indices to post negative results in October were Canadian Fixed Income, Canadian Long Term Fixed Income, and Canadian Inflation-Protected Fixed Income, with decreases of 0.3%, 0.7%, and 1.6%, respectively. The best-performing fixed-income fund index was the one that tracks the Preferred Share Fixed Income category with a 5.6% increase, while the Morningstar High Yield Fixed Income Fund Index was up 1.7% for the month.
  • The U.S Equity category—one of the few bright spots in the third quarter—offered another solid performance, with the category's fund index increasing by 5.7% for the month. Currency effects also impacted these funds, as the loonie appreciated by 2.4% against the U.S. dollar, mitigating the S&P 500 Index's 8.4% increase for the month.
  • Among sector-diversified equity fund categories, the fund indices that track International Equity and Global Equity funds were up 5.1% and 4.4%, respectively, while the Asia Pacific ex-Japan Equity and Asia Pacific Equity fund indices both increased by 3.9%. The Morningstar European Equity Fund Index increased by 3.1% for the month, which may be considered disappointing because Germany's DAX Index and France's CAC40 Index were up 12.3% and 9.9%, respectively. The euro's 3.4% depreciation against the Canadian dollar would have negatively affected European Equity funds that do not hedge their currency exposure.
  • While the three largest stock sectors in Canada displayed exceptional performance last month—the S&P/TSX capped indices for the energy, basic materials, and financial services sectors were up 7.7%, 7.3%, and 3.9%, respectively—diversified Canadian equity funds were relatively lacklustre with a 2.3% average return, reflecting the S&P/TSX Composite Index's 2.0% increase. The fund index and market benchmark were both hurt by the downfall of Valeant Pharmaceuticals Intl (VRX/TSX), a widely held stock that represented 4.6% of the Composite index at the start of the month but has since lost nearly half its value.

To view the complete report about Morningstar's preliminary October 2015 performance data for Canadian funds, please visit

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 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.

©2015 Morningstar, Inc. All rights reserved.


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SOURCE Morningstar Research Inc.

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