All fund indices that track equity or balanced categories were in the red for June, as were most fixed-income indices, according to preliminary performance data for June and the second quarter of 2015 released on Friday by Toronto-based Morningstar Research Inc.
The only positive performers among the 42 fund indices were in the four least risky categories—Canadian Short Term Fixed Income and the three money market categories—which all increased by less than 0.1%. The majority of indices posted losses between 1% and 3%.
For the second quarter, 11 fund indices had positive results.
Funds in the Greater China equity category were the best performers overall for the second quarter of 2015, consistent with the first quarter, despite steep losses in June. The Greater China equity fund index decreased by 4.6% in June, but its strong showing in April and May brought its quarterly return to a healthy 5.5%. The index remains the best-performing fund index in Canada by a wide margin for the year to date with a 22.1% increase. However, the fund index has significantly underperformed the Shanghai Stock Exchange Index, Morningstar notes, which is up 32.2% for the same period. The returns of funds in this category were hampered by their exposure to Hong Kong and Taiwan stocks, which had much more modest results.
The fund indices that track the natural resources equity, energy equity, and precious metals equity categories were among the worst performers in June, with decreases of 4.1%, 4.6%, and 6.1%, respectively. For the second quarter of 2015, the precious metals equity fund Index ranks near the top with a 1.3% increase owing to its strong results in April and May, while the natural resources equity and energy equity fund indices are down 0.3% and 3.4%, respectively.
The major diversified equity categories were all negative for both the month and the quarter, with results mostly in the middle of the pack. The U.S. equity, global equity, Canadian equity, and international equity fund indices were down 1.6%, 2.0%, 2.5%, and 3.1% in June, respectively, while their quarterly results ranged between -0.9% and -1.8%.
Unlike the first quarter, currency movements were modest and had a limited effect on the performance of foreign equity funds in the second quarter, Morningstar notes. The Canadian dollar appreciated by 1.7% against the U.S. dollar and by 2% to 3% against most Asian currencies, but depreciated by 2.1% against the euro and 4.0% against the U.K. pound. Currency movements were in the 8-10% range in the first quarter of the year.
Final performance figures will be published next week.