MORN Morningstar Inc

TORONTO, July 5, 2011 /CNW/ -- TORONTO, July 5, 2011 /CNW/ - Investment funds in Canada posted mostly negative returns in June, according to preliminary performance data released today by Morningstar Canada. All but one of the 24 Morningstar Canada Fund Indices that track equity categories finished the month in the red, though the losses would have been much worse if not for a significant recovery in the last two weeks. "The end of the month saw a strong rally in the markets, as optimism following the passing of austerity measures in Greece led investors back to some risk taking. As a result, the S&P/TSX Composite Index, which had dropped below 12,790 on June 17, got back above 13,300 and made up some of the losses from earlier in the month," said Morningstar Fund Analyst Adam Fisch. The worst performer among the Morningstar Canada Fund Indices in June was the one that measures the Precious Metals Equity category, which lost 6.2%. "A number of gold-producing companies like IAMGold Corp. and Yamana Gold Inc. saw their stock prices fall as gold prices dropped, due partly to investors restoring some faith in the U.S. dollar, and to selloffs in the broader market," Fisch said. Second from the bottom with a 5.9% loss was the Morningstar Natural Resources Equity Fund Index, whose constituent funds were hurt mid-month by a decision by the International Energy Agency (IEA). "On June 23 the IEA announced that its member countries, including the United States, would tap their oil reserves to the tune of 60 million barrels to make up for lost production in Libya and keep oil prices down. That news affected Canadian oil and gas producers like Canadian Natural Resources, who rely on oil exports to the United States," Fisch said. Overall, only five of the 44 Morningstar Canada Fund Indices had positive returns in June, including the three indices that track the very conservative money market categories. The only equity fund index to post a positive return in June was Japanese Equity with a 1.2% gain, and the other winner was the Morningstar Canadian Short Term Fixed Income Fund Index, which eked out a 0.2% gain for the month. Among broader domestic equity fund indices, the disappointing performance of the natural resources sectors weighed heavily on the overall market. The S&P/TSX capped sub-indices that measure the energy and materials sectors lost 5.6% and 4.8%, respectively, for the month, which dragged on the broader market benchmarks. As a result, the Morningstar Canadian Equity Fund Index, whose constituent funds allocate, on average, more than 46% of their assets to these sectors, lost 3% for the month. Meanwhile, the Morningstar Canadian Small/Mid Cap Equity Fund Index, with nearly 50% in resources stocks, lost 4%. Foreign equity funds generally lost less than their domestic counterparts. The Morningstar indices that track the International Equity, U.S. Equity, and Global Equity categories lost 1.9%, 2.2%, and 2.2%, respectively, while European Equity was down 2.7%. The worst-performing foreign equity fund index was Greater China Equity with a loss of 4.5% for the month. For more on June fund performance, go to www.morningstar.ca. 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 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 individuals, financial advisors, and institutions. Morningstar provides data on approximately 390,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 5 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services and has nearly $140 billion in assets under advisement and management as of March 31, 2011. The company has operations in 26 countries. To view this news release in HTML formatting, please use the following URL: http://www.newswire.ca/en/releases/archive/July2011/05/c3342.html p Adam Fisch, Fund Analyst, Morningstar Canada, (416) 484-7815; Christian Charest, Editor, Morningstar Canada, (416) 484-7817 /p

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