TORONTO, May 2, 2013 /CNW/ - The month of April once again saw exceptional returns for foreign equity funds sold in Canada, while domestic equity funds found themselves in negative territory. Thirty-three of the 42 Morningstar Canada Fund Indices had positive results for the month, including increases of more than 2% for eight of the 23 equity fund categories, according to preliminary performance data released today by Morningstar Canada.
The top-performing fund index in April was the one that measures the aggregate performance of funds in the Japanese Equity category; it posted a 7.8% increase for the month, extending its winning streak to six consecutive months. Japan's Nikkei 225 Index posted its best one-month return since December 2009 with an 11.8% gain in local currency terms, as the Bank of Japan began implementing its aggressive monetary easing action. The Japanese yen also continued its downward trend, dropping 4.4% versus the Canadian dollar and tempering returns for Canadian investors.
Also among the top performers were the fund indices that track the Asia Pacific Equity, Global Small/Mid Cap Equity, International Equity, and European Equity categories, with increases of 3.2%, 3.1%, 3.0%, and 2.1%, respectively.
"Mixed economic data globally, including positive real GDP growth for the first quarter in the United States and a disappointing decline in Chinese manufacturing, contributed to a volatile month that concluded with most of the major markets showing improvement," said Morningstar Fund Analyst Achilleas Taxildaris. "European equities fared well after a bailout agreement was reached in Cyprus. The expectation that the European Central Bank will cut interest rates also contributed to the performance of European markets."Domestic equity funds continued to underperform their international counterparts, with all five Morningstar Canada Fund Indices that track Canadian stock categories posting negative monthly returns. The decreases ranged from 0.1% for the Morningstar Canadian Dividend & Income Equity Fund Index to 1.7% for the Morningstar Canadian Equity Fund Index.