Market Overview

Equity Funds Remain Positive in September 2016; Post Strong Quarterly Results, Morningstar Canada Data Show


TORONTO, Oct. 4, 2016 /PRNewswire/ -- Morningstar Research Inc., a Canadian subsidiary of Chicago-based independent investment research provider Morningstar, Inc. (NASDAQ: MORN), today released preliminary September and third-quarter 2016 performance data for its 44 Morningstar Canada Fund Indices, which measure the aggregate returns of funds in various standard categories. Forty-three of the 44 fund indices increased during the quarter ending Sept. 30, 2016, including 14 indices that increased by at least 5%.

Highlights from Morningstar's September and third-quarter 2016 preliminary performance report include:

  • All but one of the 22 Morningstar Canada Fund Indices that track equity categories had positive results in the quarter, with most indices increasing between 4% and 8%. All fund indices that measure fixed-income and balanced categories were in positive territory. For the month of September, 39 of the 44 Fund Indices were up, though the increases were less than 1% in most cases.
  • The fund index that tracks the Greater China Equity category performed the best with a 14.6% increase in the third quarter. Funds in that category were up 2.6% in September, following increases of 6.7% and 4.7% in August and July, respectively. As a result of the strong performance of Chinese equities, funds in the Emerging Markets Equity, Asia Pacific Equity, and Asia Pacific ex-Japan Equity categories also performed well, with their respective fund indices increasing 9.1%, 8.8%, and 7.8% for the quarter.
  • In Canada, the S&P/TSX Composite Index had three consecutive months in positive territory, ending the third quarter with an increase of 5.5%. The energy and financial services sectors were the biggest contributors to Canadian stock market performance, while the basic materials sector was a detractor. Funds in the Canadian Equity category followed the pace of the benchmark, with the Morningstar Canadian Equity Fund Index increasing 5.3% for the quarter. The fund indices that track the Canadian Small/Mid Cap Equity, Canadian Dividend & Income Equity, and Canadian Focused Equity categories were up 5.1%, 4.8%, and 4.6%, respectively, while the Canadian Focused Small/Mid Cap Equity Fund Index was the best performer among domestic equity fund indices with a 5.5% increase.
  • Funds in the U.S. Equity category collectively posted a 4.7% increase in the third quarter, reflecting the 3.9% increase of the S&P 500 Index as well as a 0.8% appreciation of the U.S. dollar versus its Canadian counterpart. The U.S. Small/Mid Cap Equity Fund Index lagged its larger-cap peer with a 4.2% increase. Both these fund indices had strong gains in July but were flat in August and slightly negative in September.
  • The worst-performing fund index for both the month and the quarter was the one that tracks the Real Estate Equity category, which decreased 0.7% in September and 1.3% in the third quarter.
  • European markets were weak but positive in August and September, but owing to their strong gains in July, European Equity funds were among the best performers in the third quarter, collectively increasing 5.7%. Among other sector-diversified foreign-equity fund categories, the Morningstar International Equity Fund Index increased 6.4%, while the Global Equity and Global Small/Mid Cap Equity fund indices increased 5.5% and 4.9%, respectively, for the quarter.
  • Fixed-income funds saw little movement in September, with most fund indices increasing between 0.1% and 0.3%. The best performer for the month was the Morningstar Floating Rate Loans Fund Index with a 0.8% increase, while the Preferred Share Fixed Income Fund Index was the worst performer with a 0.3% decline. For the quarter, all fixed-income categories were positive, with increases ranging from 0.4% for the Canadian Short Term Fixed Income Fund Index to 4.6% for Preferred Share Fixed Income.

To view the complete report about Morningstar's preliminary September and third-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 approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on nearly 18 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$185 billion in assets under advisement or management as of June 30, 2016. 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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