U.S. Equity Funds Outperform as Energy Drags Canadian Funds, Morningstar Canada Data Show

TORONTO, June 2, 2015 /CNW/ -- Morningstar Research Inc., a Canadian subsidiary of Chicago-based independent investment research provider Morningstar, Inc. (NASDAQ: MORN), today released preliminary performance data for May 2015 about its 42 Morningstar Canada Fund Indices, which measure the aggregate returns of funds in various standard categories. Twenty-eight of the 42 Fund Indices increased during the month, including seven that increased by 2% or more, while three of the Fund Indices that lost ground decreased by more than 2%.

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

  • Funds that concentrate on the energy and natural resources sectors suffered a setback after sizeable increases in April. The Energy Equity Fund Index posted May's worst result with a 5.6% decline, while the Natural Resources Equity Fund Index posted May's third-worst result with a 2.6% decline. Worldwide crude oil prices dropped in May, in large part because of a two-and-a-half year high in OPEC production.
  • The decline in energy had a large effect on funds in the Canadian Equity category, where energy represents more than one-fifth of the holdings. The Canadian Equity Fund Index was a poor performer in May, decreasing by 1%. Recent economic data indicates that lower investment in Canada's oil patch contributed to a 0.6% contraction in the Canadian economy during the first quarter of 2015. In addition, the Canadian dollar is down against currencies including the U.S. dollar, the British pound and the Chinese yuan.
  • Funds in the U.S. Equity and U.S. Small/Mid Cap Equity categories, which were the worst performers in April, had a very different month in May, posting increases of 3.5% and 4.2%, respectively. The S&P 500 Index of large-capitalization U.S. stocks was up 1.3% for the month, but for Canadian investors the more significant contributor was currency effect. The U.S. dollar rebounded by 2.9% versus its Canadian counterpart in May after a 4.4% decline in April, which was its worst monthly result since July 2009. While recent reports indicate the U.S. economy saw its own contraction of 0.7% in the first quarter of 2015, few expect it to continue, with the end of both a tough winter and a labour dispute at West Coast ports.
  • The majority of the Fund Indices that track foreign equity categories were up this month, except for the Emerging Markets Equity Fund Index, which declined by 0.8%. The poor performance of Brazilian stocks contributed to the decline, along with the depreciation of the Brazilian real versus the Canadian dollar.

To view the complete report about Morningstar's preliminary May 2015 performance data for Canadian funds, please visit http://cawidgets.morningstar.ca/ArticleTemplate/ArticleGL.aspx?culture=en-CA&id=699696.

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 approximately 500,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 15 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 and had approximately US$179 billion in assets under advisement or management as of March 31, 2015. The company has operations in 27 countries.

©2015 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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