All 41 of the Morningstar Canada fund indices, which measure the aggregate returns of funds in various standard categories, had positive results during the month of August, with North American equity funds performing particularly well.

Eleven of the 21 equity-focused fund indices increased by 2% or more, while six of the seven fixed-income fund indices increased by less than 1%, according to preliminary performance numbers today released by Morningstar Canada.

The best performer among all indices was the one that tracks the U.S. small/mid cap equity category, which increased by 4.4%.

Tied for second place were the U.S. equity and Canadian focused small/mid cap Eequity fund indices, each with a 3.7% increase.

The sector-specific energy equity fund index increased by 3.1%, while the North American equity fund index rounded out the top five performers with a 2.6% increase. Currency movements between the Canadian and U.S. dollars had a minimal impact on fund performance last month.

“North American economies have been improving in during the last few months,” said Achilleas Taxildaris, Morningstar manager analyst. “After a slow first quarter affected by a harsh winter, second-quarter growth numbers for Canada and the United States, which were announced in August, both came in above expectations, reaffirming forecasts for 3% annual growth. Strong corporate earnings numbers, also buoyed by an improving economy, helped to scare the bear away for now.”

The energy sector was the chief driver for domestic equity funds, as the other two main sectors of the Canadian economy—financial services and basic materials—were mostly flat during the month. The Canadian focused equity fund index posted an increase of 2.4%, while the fund indices that track the Canadian small/mid cap equity and Canadian dividend and income equity categories were both up 2.3%. The more broadly diversified Canadian equity fund index increased by 1.7%.

Among funds that focus on other regions, those that invest in emerging-markets equities had a good month with an average gain of 2.5%, owing in part to a nearly 10% rise by Brazil’s Bovespa Index. However, funds in the Asia Pacific equity, Asia Pacific ex-Japan equity, and Greater ChinaeEquity categories had more modest increases of 0.8%, 0.7%, and 0.1%, respectively. The worst-performing equity fund index was European equity, which eked out a 0.1% increase.

Against expectations, bond funds continued to deliver positive results in August. The best-performing category was Canadian long-term fixed income with a 2.3% increase, while the high yield fixed income and Canadian fixed income fund indices were both up 0.9%.

Final performance figures will be published next week.