Chinese Equity Funds Lead in July While Most Fund Categories Lose Ground, Morningstar Canada Data Show

TORONTO, Aug. 2, 2017 /PRNewswire/ -- Morningstar Research Inc., a Canadian subsidiary of Chicago-based independent investment research provider Morningstar, Inc. (NASDAQ: MORN), today released preliminary July 2017 performance data for its 44 Morningstar Canada Fund Indices, which measure the aggregate returns of funds in various standard categories. Thirty-four of the 44 fund indices decreased during the month, with the losses in most cases limited to 2.0% or less, while nine of the 10 fund indices with positive results were up by less than 2.0%.

Highlights from Morningstar's July 2017 preliminary performance report include:

• The best-performing fund index for the month was the one that tracks the Greater China Equity category, which increased 3.5%. Funds in this category have been the top performers in Canada so far in 2017, with an aggregate increase of 21.2% since the start of the year. The only other sector-diversified fund category to post a positive result in July was Emerging Markets Equity, whose fund index increased 1.1%, while the Morningstar Asia Pacific Equity Fund Index was flat with 0.0%.
• Fund indices representing three sector-specific equity categories were also among the top performers in July: Natural Resources Equity, Energy Equity, and Financial Services Equity increased 1.8%, 1.3%, and 0.1%, respectively. While the Financial Services Equity category has produced positive performance so far in 2017, Natural Resources Equity and Energy Equity have been the worst performers for the year to date, with their respective fund indices decreasing 11.0% and 19.6%.
• Despite negative results, domestic equity funds were among the best performers in July. The Canadian Equity and Canadian Dividend & Income Equity fund indices both decreased 0.5%, while the Morningstar Canadian Focused Equity Fund Index decreased 0.8%. The benchmark S&P/TSX Composite Index had a total return of -0.1% for the month despite the country's three largest sectors—financial services, energy and basic materials—all posting gains. The industrials sector, with a loss of 3.4% for the month, was the biggest contributor to the negative performance.
• The Morningstar U.S. Equity Fund Index decreased 1.2% for the month. U.S. stock markets did well in July, with the S&P 500 Index posting a total return of 2.1%, but the Canadian dollar's strong appreciation against its U.S. counterpart more than offset the gains for Canadian investors. Also suffering from this currency effect was the Morningstar U.S. Small/Mid Cap Equity Fund Index, which was the worst-performing equity fund category with a 2.3% decrease.
• Most fixed-income fund categories ended the month in the red, with domestic bond categories being hit hard following the Bank of Canada's decision to raise its key interest rate on July 12. The Morningstar Canadian Long Term Fixed Income Fund Index was the worst performer among all fund categories with a 4.4% decrease, while Canadian Inflation-Protected Fixed Income was down 3.2%. The largest category in that group, Canadian Fixed Income, saw its fund index decrease 1.7%. Two fixed income fund indices increased during the month: High Yield Fixed Income and Preferred Share Fixed Income were up 0.2% and 1.4%, respectively.

To view the complete report about Morningstar's preliminary July 2017 performance data for Canadian funds, please visit https://goo.gl/xSM66T.

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, and institutional investors in the private capital markets. 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 June 30, 2017. The company has operations in 27 countries.

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SOURCE Morningstar Research Inc.