9 out of 10 funds gain ground: Morningstar survey

By IE Staff |

Battered mutual fund investors received good news in the wake of April markets. Nine out of every 10 funds and 26 of 32 Morningstar Canada Fund Indices gained ground for the month. This is a big change from the first quarter, when 91% of funds and 26 of the indices were in the red.

For April, 93% of the more than 4,600 Canadian funds surveyed by Morningstar earned money for investors. This is the best showing since November, when 95% of funds were in positive territory.

"The end of the war in Iraq was topped off by strong earnings reports in the United States," said Gareth Tingling, manager of fund research for Morningstar Canada. "Both helped restore confidence and boost markets."

"Better still, as the majority of U.S. public companies reported results it became evident that analysts were not trimming earnings expectations going forward," Tingling said.

"However, the surge in the Canadian dollar offset returns on U.S. investments," said Tingling.

Top fund categories for April:

The Latin American Equity Fund Index was the top fund category for April with a 14.1% return. It was followed by the European Equity Fund Index at 9.3% and the International Equity Fund Index at 8.8%.

The Japanese Equity Fund Index had the worst return in April with a loss of 2.9%. It trailed the Precious Metals Fund Index, which lost 1.2%, and the Asia/Pacific Rim Equity Fund Index, which was down 0.9%.

The Canadian Equity Fund Index was up 3.9%. The Canadian Balanced Fund Index gained 2.9%. The Canadian Money Market Fund Index was positive at 0.2%, while the Global Equity Fund Index gained 6.6%. The Canadian Bond Fund Index rose 1.5%. The U.S. Equity Fund Index gained 5.2%.

CI Funds currently has 30 five-star funds, the highest total among Canadian fund companies. CI's total includes two in the newly rated Japanese Equity category. On a percentage basis, and among sponsors with at least three top-rated funds, I.A. Michael Investment Counsel continues to lead. All three of Michael's ABC Funds have five-star status.