Originally from our sister publication, Advisor.ca.
After four consecutive months in the red, resource-heavy equity funds in Canada offered healthy gains at 2.4% in July, finds Morningstar Canada.
“[News] the ECB will ‘do whatever it takes’ to keep the common currency intact was enough to raise the price of gold and oil by 3% and 7%, respectively,” says Morningstar fund analyst Serkan Altay.
Funds in the Canadian Small/Mid Cap Equity and Canadian-focused Small/Mid Cap Equity categories were also good performers, increasing 1.1% and 1.3%, respectively. Both fund indices posted decreases in each of the four previous months.
Other winners included the Canadian Dividend & Income Equity, Canadian Equity, and North American Equity Fund indices, which increased 0.8%, 0.5%, and 0.4%, respectively. The best performer overall was the real estate equity fund, which increased 3.1%.
Despite mixed results in the various stock markets around the world, all of the fund indices that measure foreign equity categories decreased last month.
Notably, the European Equity Fund decreased 0.3% even though stock market indexes in Germany and France gained 5.5% and 3%, respectively. But for Canadian investors, these gains were countered by a steep appreciation of the Canadian dollar versus the euro during the month.
Among other foreign equity fund categories, the International Equity Fund decreased 0.3%, while the U.S. Equity, Global Equity, and Asia Pacific Equity Fund indices were down 0.5%, 0.5%, and 0.6%, respectively.
The worst performer among all was Japanese Equity, which decreased 4.3%.
“Weak Japanese industrial production data renewed fears that the economy is losing steam, while China’s top leaders warned that economic growth could slow even further and called for more efforts to boost weak domestic demand,” says Altay.