Thirty-four of the 44 Morningstar Canada mutual fund indices saw losses during the month of July, reveals Morningstar Research Inc.’s July 2017 performance data. Of those fund indices, most saw a decrease of two per cent or less. For the indices that saw increases, 9 out of the 10 were up less than 2 per cent.
The Greater China Equity category had the best performance for the month, with an increase of 3.5 per cent. Since the start of the year, the fund index saw an aggregate increase of 21.2 per cent.
Natural Resources, Energy and Financial Services
Three sector-specific categories were also among the top performers of the month: Natural Resources Equity, Energy Equity, and Financial Services Equity saw increases of 1.8 per cent, 1.3 per cent, and 0.1 per cent respectively. Morningstar underlines, however, that “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 per cent and 19.6 per cent.”
Impact of interest rate hike
Domestic equity funds were also among the top performers last month, although they still had negative results. The Canadian Equity and Canadian Dividend and Equity fund indices saw decreases of 0.5 per cent each, and the Morningstar Canadian Focused Equity Fund Index saw a decrease of 0.8 per cent.
Due to the Bank of Canada’s interest rate hike on July 12, most fixed-income fund indices saw declines by the end of the month. The worst performer was The Morningstar Canadian Long-Term Fixed Income Fund, with a decrease of 4.4 per cent for the month.