After a difficult September, Morningstar Research reports that most fund categories posted gains last month.
According to Morningstar's preliminary performance data for October, 39 of its 42 fund indices were up for the month and 19 of them increased by 3% or more.
While funds focused on energy and natural resources equities were the worst performers in the third quarter of 2015, they came out on top in October. Morningstar's Energy Equity Fund Index increased by 6.9% and the Natural Resources Equity Fund Index increased by 6.9% in the month; these two indices had posted third quarter losses of 19.1% and 21.1% respectively.
Asian funds also gained back some lost ground, with the Greater China Equity Index posting an aggregate gain of 6.2%. "The Shanghai Composite Index was up 10.8% in October while the Hang Seng Index was up 8.6%, but market gains were partly offset by the Canadian dollar's appreciation of 1.7% and 2.4% against the Chinese renminbi and the Hong Kong dollar, respectively," notes Morningstar. The Asia Pacific ex-Japan Equity and Asia Pacific Equity fund indices also increased by 3.9%.
In the United States, the stock markets continued to perform well, although gains were partially offset by the fact that the loonie appreciated by 2.4% against the US dollar. Morningstar's U.S equity category finished the month 5.7% higher.
As for Europe, Morningstar notes that the euro's 3.4% depreciation against the Canadian dollar negatively affected European Equity funds that do not hedge their currency exposure; although Germany's DAX and France's CAC40 were up 12.3% and 9.9% respectively, Morningstar's European Equity Fund Index only posted a 3.1% gain for the month.
It was domestic fixed income funds that were the worst performers in October, with the Canadian Fixed Income, Canadian Long Term Fixed Income, and Canadian Inflation Protected Fixed Income seeing decreases of 0.3%, 0.7%, and 1.6% respectively. The best-performing fixed-income fund index was the one that tracks the Preferred Share Fixed Income category which increased by 5.6% in October, while Morningstar’s High Yield Fixed Income Fund Index was up 1.7%.