Investment Funds Slump in June, Morningstar Canada Data Show
July 05 2011 - 11:39AM
PR Newswire (Canada)
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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