Strong Rebound in March Pushes Canadian Equity Funds into Positive Territory for the First Quarter of 2016, Morningstar Canada Data Show

TORONTO, April 4, 2016 /CNW/ -- Morningstar Research Inc., a Canadian subsidiary of Chicago-based independent investment research provider Morningstar, Inc. (NASDAQ: MORN), today released preliminary first-quarter 2016 performance data for its 42 Morningstar Canada Fund Indices, which measure the aggregate returns of funds in various standard categories. Twenty-one of the 42 Fund Indices increased during the quarter, including nine of the 21 indices that track equity fund categories.

Highlights from Morningstar's first-quarter 2016 preliminary performance report include:

  • Following two months of overwhelmingly negative performance, all 42 fund indices had positive results in March. The best performers for the month were the fund indices that track the Energy Equity and Natural Resources Equity categories, which increased 9.8% and 9.3%, respectively. Nineteen indices—most of which represented equity fund categories—increased by 3% or more. Stock market indexes in Canada, the United States, Europe, and Asia all posted strong gains in March, while currency movements for the month were mixed.
  • The top-performing fund index for the first quarter of 2016 was the one that tracks the Precious Metals Equity category with an increase of 35.4%, most of which was obtained in February. In March, the fund index was up 1.7%.
  • The Canadian stock market had a slow start to the quarter, but the S&P/TSX Composite Index finished on a high note with a 5.3% gain in March, ending the quarter up 4.5%. All five domestic-equity fund indices were positive for the quarter; the Morningstar Canadian Dividend & Income Equity Fund Index was up 4.5%, followed by Canadian Equity with 3.8%. The fund indices that track the Canadian Small/Mid Cap Equity, Canadian Focused Equity, and Canadian Focused Small/Mid Cap Equity categories increased 1.6%, 1.0%, and 0.6%, respectively.
  • After a sharp decline in 2015 and in January 2016, the Canadian dollar appreciated against the U.S. dollar by more than 4% in February and again in March, ending the quarter up 6.7%. While the U.S. stock market was positive overall for the quarter because of strong performance in March, Canadian funds that invest in U.S. stocks were down for the same time period because of currency effects. The Morningstar U.S. Equity Fund Index decreased 4.7% for the quarter, while the Morningstar U.S. Small/Mid Cap Equity Fund Index was down 4.1%.
  • Market results in Europe measured in local currency were positive in March but not enough to pull markets out of the red for the quarter. France's CAC40 Index and Germany's DAX Index decreased 5.4% and 7.2%, respectively, for the three-month period, while London's FTSE 100 Index was down 1.1%. Currency effects amplified the losses , as the Canadian dollar gained 1.7% against the euro and 9.4% against the British pound. As a result, the Morningstar European Equity Fund Index was one of the worst performers with a 7.3% decline for the quarter.
  • The worst-performing fund index for the quarter was the one that tracks the Greater China Equity category, which decreased 10.7%. The index increased 5.8% in March but could not overcome its declines of 10.3% in January and 5.8% in February. Like their European Equity counterparts, these funds suffered from a combination of poor market results and adverse currency effects, as the Canadian dollar gained more than 6% against both the Chinese renminbi and the Hong Kong dollar in the first quarter of 2016.
  • All sector-diversified foreign-equity fund categories were in the red for the quarter despite strong performances in March. The best-performing foreign-equity fund index was Emerging Markets Equity with a 0.6% decrease, while Global Equity, Asia Pacific Equity, International Equity, and Asia Pacific ex-Japan Equity were down 4.7%, 5.7%, 7.0%, and 7.4%, respectively.

To view the complete report about Morningstar's preliminary first-quarter 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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