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Second-Quarter 2017 Results Positive Despite Most Fund Categories Losing Ground in June, Morningstar Canada Data Show

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TORONTO, July 5, 2017 /PRNewswire/ -- Morningstar Research Inc., a Canadian subsidiary of Chicago-based independent investment research provider Morningstar, Inc. (NASDAQ: MORN), today released preliminary June and second-quarter 2017 performance data for its 44 Morningstar Canada Fund Indices, which measure the aggregate returns of funds in various standard categories. Forty of the 44 fund indices decreased in the month of June, while 32 increased during the quarter ended June 30, 2017.

Highlights from Morningstar's June and second-quarter 2017 preliminary performance report include:

  • Most fund categories posted negative performance for the month of June. Aside from the two Morningstar Canada Fund Indices that track money market categories, the only fund indices that increased during the month were Preferred Share Fixed Income, up 3.3%, and Financial Services Equity, up 2.9%. The worst performers for the month were Natural Resources Equity, European Equity, and Energy Equity, which decreased by 3.7%, 4.2%, and 5.6%, respectively.
  • The best-performing fund index for the quarter was the one that tracks the Greater China Equity category, which increased 5.7% over the three-month period even with a 1.9% drop in June. Funds in that category were bolstered by strong performance on the Hong Kong stock market, where the Hang Seng Index gained 6.9% over three months. Despite adverse currency effects, Greater China Equity funds have been the best performers in Canada so far in 2017, collectively gaining 17.1% over the first six months.
  • All foreign equity fund indices were among the best performers for the quarter. The fund indices that track the European Equity, Asia Pacific ex-Japan Equity, International Equity, and Asia Pacific Equity categories posted increases of 4.5%, 4.1%, 3.8%, and 3.2%, respectively. In all cases, most of the gains were realized in April, while results were more modest in May and negative in June.
  • The Morningstar U.S. Equity Fund Index posted a middling 0.7% increase for the quarter, reflecting upticks of 2.9% in April and 0.3% in May, and a decrease of 2.4% in June. The S&P 500 Index had a total return of 3.1% during the quarter, but the appreciation of the Canadian dollar against its U.S. counterpart over that period—including a 4% increase in June—offset most of the positive performance. The Morningstar U.S. Small/Mid Cap Equity Fund Index did slightly better with a 1.2% increase for the quarter.
  • In Canada, the S&P/TSX Composite Index was in negative territory in both May and June, ending the quarter down by 1.6%. The Morningstar Canadian Equity Fund Index followed the same pattern but outperformed the benchmark with a 1.3% decrease. As it did in the first quarter, the energy sector suffered heavy losses in April, May, and June and was the biggest detractor to the overall Canadian market, as the S&P/TSX Capped Energy Index lost 13.3% for the quarter. The financial services sector provided some relief in June, with the sub-index gaining 2.5%, but it ended the quarter in the red, down 0.9%.
  • Funds in the Energy Equity category were once again the worst performers in the second quarter; the fund index that tracks the category decreased by 12.6%, following a 9.2% decrease in the previous quarter. The fund index that tracks the Natural Resources Equity category—a mix of energy and basic materials stocks—was the second-worst performer with an 8.9% decrease. The Morningstar Precious Metals Equity Fund Index followed with a 6.2% decrease.
  • Most fixed-income fund categories had positive results during the quarter. The Morningstar Canadian Long Term Fixed Income Fund Index was the top performer in that group with a 3.9% increase, while Canadian Short Term Fixed Income was the only fund index in the red, down 0.3%. The other fixed income fund indices all posted increases between 0.3% and 1.1%.

To view the complete report about Morningstar's preliminary June and second-quarter 2017 performance data for Canadian funds, please visit https://goo.gl/LLSyCR.

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 and research insights on a wide range of investment offerings, including managed investment products, publicly listed companies, private capital markets, and real-time global market data. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than US$200 billion in assets under advisement and management as of March 31, 2017. The company has operations in 27 countries.

©2017 Morningstar, Inc. All rights reserved.

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Media Contact:
Christian Charest, +1 416-484-7817 or christian.charest@morningstar.com

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SOURCE Morningstar Research Inc.

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