Nearly three out of every four pooled funds in the Morningstar Canada database lost money during the first quarter or 2008, the independent investment research firm said today.

The best returns generally came from fixed-income funds, Morningstar said.

The best-performing pooled fund category for the quarter, as measured by the median return of its constituent funds, was Canadian inflation-protected fixed income with a gain of 4.4%. That category contains only two funds: Standard Life Real Return Bond had the best return with 5.9% while Goodman Real Return Bond was up 3.7%.

The second-highest median return was the 3.1% gain posted by the Canadian short term fixed income category. Three other bond fund groups rounded out the top five: global fixed income (2.9%), Canadian fixed income (2.8%) and Canadian long term fixed income (1.7%).

Overall, 10 of the 41 pooled fund categories had positive median returns in the first quarter of 2008. The worst performer was the science & technology equity category with a 16.3% median loss. Two categories are tied for second worst return of the quarter; Asia Pacific equity and U.S. small/mid cap equity both lost 9%.

The only equity-based categories to post positive median returns were precious metals equity (which contains just one fund) with 1.3% and natural resources equity (four funds) with 1.2%.

Among the larger equity pooled fund groups, the Canadian equity category had a median loss of 3.9%, while the median loss in the Canadian focused equity category was 4.3%. The European equity, international equity, and global equity categories had median losses of 4.6%, 5.3%, and 5.4%, respectively, and the U.S. equity category had a median loss of 6.1%.

Among individual funds, the best performer for the quarter was SEI Enhanced Global Bond, which returned 15.8%. Global bond funds, which derive a large portion of their returns from currency fluctuations, accounted for eight of the top 10 individual fund performances for the quarter, largely assisted by the Canadian dollar’s sharp drop against most major world currencies during those three months. Six of the 27 funds that comprise the Global Fixed Income category posted double-digit returns for the quarter.

As of March 31, 2008, Goodman & Co., Investment Counsel Ltd., a division of Dundee Wealth Management, is the pooled fund sponsor with the most distinct mandates earning the highest Morningstar Rating of 5 stars. Goodman has seven funds bearing Morningstar’s top rating out of a total of 15 rated funds. Three firms share second place with four top-rated pooled funds each: Desjardins Financial Security, Industrial Alliance Insurance and Financial Services Inc., and RBC Asset Management Inc.

Morningstar Canada researches more than 1,000 Canadian institutional investment funds.