The Morningstar Canada Fund Index that tracks funds in the Energy Equity category was the best performer in the second quarter with an increase of 13.7%, and it was third-best performing index for the month of June with a 6.3% increase. The Morningstar Natural Resources Equity Fund Index, whose constituent funds combine energy and basic materials stocks, including precious metals, was the third-best performer for the quarter with a 10.6% increase, the majority of which occurred in June.
"Fund returns in these two categories benefited from oil and gas stocks that rose with escalating oil prices, as the current conflict in
Precious Metals Equity was the second-best performing fund category in
"Gold stocks and stocks that are positively correlated to the price of gold were helped by geopolitical tensions in
The five domestic equity fund indices were all among the top 10 performers for the quarter, having posted positive results for three consecutive months in most cases. The purely domestic Canadian Small/Mid Cap Equity and Canadian Equity categories were up 6.2% and 5.8%, respectively, while the Canadian Focused Small/Mid Cap Equity and Canadian Focused Equity categories, which can allocate up to 49% of their holdings in foreign stocks, increased by 4.7% and 3.8%, respectively. The Morningstar Canadian Dividend & Income Equity Fund Index was up 5% for the quarter.
Foreign equity funds were mostly positive but their returns on average were less than those of funds that focus on resources-rich Canada. Notably, the Morningstar Emerging Markets Equity Fund Index increased 3.2% for the quarter;
The worst-performing fund indices--and the only ones in the red for the quarter--were Greater China Equity and U.S. Small/Mid Cap Equity, with decreases of 0.3% each, and European Equity, down 1.8%. European Equity was also the worst performer for the month of June with a 1.5% decrease.
"European stocks fell in June after reports and economic indicators pointed toward a slowdown in Eurozone business activity, as well as a decline in
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