Precious Metals Equity Funds Surge as Equity Slump Continues in February, Morningstar Canada Data Show

TORONTO, March 2, 2016 /CNW/ -- Morningstar Research Inc., a Canadian subsidiary of Chicago-based independent investment research provider Morningstar, Inc. (NASDAQ: MORN), today released preliminary February 2016 performance data for its 42 Morningstar Canada Fund Indices, which measure the aggregate returns of funds in various standard categories. Ten of the 42 Fund Indices increased during the month, while 15 indices decreased 2% or more.

Highlights from Morningstar's February 2016 preliminary performance report include:

  • The month's top-performing fund index by a wide margin was the one that tracks the Precious Metals Equity category, which increased 26.3%. This is the third consecutive increase for this index, which has now recuperated from the severe losses suffered in June and July 2015. Most of the funds in this category are leveraged to the price of gold, which rose nearly 10% in February.
  • The Morningstar Natural Resources Equity Fund Index was the second-best performer last month with an increase of 3.8%. Funds in this category are split between the basic materials sector—which includes gold companies—and the energy sector, which continued to slide as the price of oil stagnated. The S&P/TSX Capped Energy Index was down 3.1% for the month.
  • The only sector-diversified equity fund index to post a positive result last month was Canadian Small/Mid Cap Equity, which increased 0.7%. Domestic equity funds generally outperformed foreign equity funds again in February. The fund index that tracks the Canadian Equity category was down 0.2%, underperforming the S&P/TSX Composite Index, which increased 0.5%. The Canadian Dividend & Income Equity and Canadian Focused Equity fund indices decreased 0.8% and 1.0%, respectively.
  • The Morningstar U.S. Equity Fund Index decreased 3.2% for the month. In a reversal of the trend that has prevailed for several months, currency movements had a detrimental effect on Canadian investors who hold unhedged U.S.-dollar investments, as the Canadian dollar appreciated 4.1% against the greenback—its first monthly increase since last October and the largest since April 2015. This amplified the 0.1% drop suffered by the S&P 500 Index when measured in U.S. dollars.
  • The worst-performing fund index in February was the one that tracks the Greater China Equity category, down 5.8%. While the stock market indexes for the Hong Kong and Shanghai stock exchanges both decreased during the month, most of the downside for Canadian-based funds resulted from currency effects, as the loonie gained nearly 4% against both the Hong Kong dollar and the renminbi. A similar scenario occurred in the Asia Pacific Equity and Asia Pacific ex-Japan Equity fund indices, which decreased 5.3% and 5.5%, respectively, as well as the European Equity Fund Index, down 5.2%. The Canadian dollar gained 3.8% against the euro and 6.1% against the pound sterling.
  • Bond funds were mostly flat last month. The top performer among the seven Morningstar Canada Fund Indices that track fixed-income categories was Canadian Long Term Fixed Income, up 0.8%, while the broader Canadian Fixed Income fund index was idle at 0.0% and the Global Fixed Income fund index decreased 1.0%. The worst-performing fixed-income fund index was Preferred Share Fixed Income, down 3.7%.

To view the complete report about Morningstar's preliminary February 2016 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 510,000 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$180 billion in assets under advisement or management as of Dec. 31, 2015. The company has operations in 27 countries.

©2016 Morningstar, Inc. All rights reserved.


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SOURCE Morningstar Research Inc.

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