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Canadian fund returns mostly positive in August

Staff Writer |
Morningstar Research, a Canadian subsidiary of Chicago-based Morningstar, released preliminary August 2016 performance data for its 44 Morningstar Canada Fund Indices.

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Most Canadian investors experienced modest gains in their fund holdings last month as only four of the 44 Fund Indices–all in sector equity categories and with relatively few assets–had negative returns.

In the developed markets including Canada, fund index returns in the major diversified equity categories were mostly between 0.5% to 1%, led by European Equity, returning 1.1%, with Global Equity not far behind at 0.9%. Canadian Equity returned 0.7%, International Equity 0.6%, and U.S. Equity 0.5%.

Investors were generally rewarded for taking equity or equity-like risks in August, which was also reflected in fixed-income categories.

The best-performing indexes–High Yield Fixed Income and Preferred Share Fixed Income, both returning 1.3%--are the most closely correlated with equities. By comparison, the Canadian Fixed Income, Canadian Long Term Fixed Income, and Canadian Short Term Fixed Income indices languished with barely positive returns.

Faring somewhat better was Global Fixed Income, which was up 0.4% during a month when the Canadian dollar slipped about half a cent in value versus its U.S. counterpart.


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