Equity funds in Canada continued to lose value in November, as fears of a long and deep economic recession kept investors away.

This was the third consecutive month in which practically all equity fund categories were in the red, though the most recent losses were not nearly as severe as those suffered in September and October, according to preliminary performance data released Tuesday by Morningstar Canada.

Thirty-four of the 43 fund indices had negative returns in November, including 22 of the 24 equity-based fund indices. However, while the losses for most equity fund categories were deep into the double-digits in the previous two months, the only fund index to lose more than 10% last month was the real estate equity fund index, down 12.9%.

“November was a continuation of October, though not to the same extent,” said Philip Lee, fund analyst for Morningstar Canada, in a release. “It was looking pretty bleak heading into the last week of the month, with the S&P 500 Index nearly touching 750, a level last seen in 1997.”

Financial services stocks were hit especially hard last month. In Canada, the S&P/TSX capped financials index lost 8.1% amid very high volatility.

“Banks and insurance companies announced that higher asset impairment charges, lower assets under management and weaker capital markets activity were likely to hit their earnings. Also, a bleak outlook for the Canadian economy and a weak employment picture has caused banks to increase provisions for loan losses,” Lee said. The financial services equity fund index was the month’s second-worst performer, down 9%.

The declining financial sector had a negative effect on the more broadly diversified domestic equity funds, which on average allocate about a quarter of their assets to financials. The fund indices that track the Canadian focused equity, Canadian equity and Canadian dividend and income equity categories lost 5.3%, 5.6% and 7.4%, respectively, for the month.

Another big story affecting Canadian equity funds was the undoing of the BCE privatization deal after the company’s auditors stated that BCE would be technically insolvent under the new capital structure. “At this point, it’s unlikely that the deal will get done, and that sent BCE shares tumbling by about one third,” Lee said.

Precious metals funds provided one of the few bright spots last month, as the precious metals equity fund index gained 23.5%. Unfortunately, this comes in the wake of four consecutive months of double-digit losses, including a disastrous 32.7% drop in October. For the year to date, the fund index is still down 47.2%.

Final performance figures will be published on next week.

IE