This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Equity Funds In The Red For Second Quarter Despite June Rally, Morningstar Canada Data Show

TORONTO, July 4, 2012 /CNW/ - Despite posting positive results in June, most equity and balanced funds in Canada were not able to overcome their losses suffered in the previous two months and ended the second quarter of 2012 in negative territory, according to preliminary performance numbers released today by Morningstar Canada. Among the 22 Morningstar Canada Fund Indices that measure the aggregate performance of equity fund categories, only two managed to stay positive last month. Among balanced funds, the target-date portfolio categories posted slight increases, while all other balanced categories were in the red.

Within the diversified equity categories, funds that invest in Canada typically had more difficulty than their foreign counterparts in the second quarter, due in large part to significant losses in the resources sectors. The Morningstar Canadian Equity Fund Index and the Morningstar Canadian Focused Equity Fund Index decreased by 5.4% and 5.3%, respectively, for the quarter, despite solid showings in June. The indices that track the Canadian Small/Mid Cap Equity and Canadian Focused Small/Mid Cap Equity categories both lost ground in each of the past three months and showed decreases of 8.3% and 7.6%, respectively, for the quarter, ranking near the bottom among all indices. The only fund categories that did worse were those that focus on the resources and precious metals sectors; the Morningstar Natural Resources Equity Fund Index decreased by 15.7% for the quarter, while the Morningstar Precious Metals Equity Fund Index decreased by 16.9%.

The only two equity fund indices that advanced in the second quarter were also sector-specific: the Morningstar Real Estate Equity Fund Index increased by 5.5% and the Morningstar Health Care Fund Index was up 5.1%.

Equity funds, particularly those that invest outside Canada, posted solid results in June with Europe leading the way. "The month of June saw a number of frightening signs for the market, with a disappointing U.S. jobs report on the first of the month, Europe in turmoil, and Moody's downgrading a number of global banks. However, on the last trading day of the month, global markets rallied on news that eurozone leaders came to an agreement to bail out troubled banks," said Morningstar Fund Analyst Adam Fisch. As a result, the Morningstar European Equity Fund Index increased by 5.1% in June, while the indices that track the Japanese Equity, International Equity, and Global Equity categories increased by 4.5%, 4.3%, and 3.2% for the month, respectively. Unfortunately for investors, all of these categories decreased by more than 5% for the quarter.

Meanwhile, fixed income funds enjoyed gains for the quarter as investors once again sought safe havens. All six of the fund indices that track bond categories saw increases during the quarter, ranging from 3.9% for the Morningstar Canadian Long Term Fixed Income Fund Index to 0.6% for the Morningstar Canadian Short Term Fixed Income Fund Index. Among balanced and portfolio categories, the best performer with a 0.3% increase was the Morningstar 2020 Target Date Portfolio Fund Index, whose constituent funds consist mainly of fixed-income assets. The worst performer was the Morningstar Global Equity Balanced Fund Index, down 3.4% over the past three months.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG

Markets

Chart of I:DJI
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 +1.21 0.06%
NASDAQ 4,828.3250 +15.6170 0.32%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs