Much like October, November was an excellent month all around for mutual funds. Forty-one of the 42 Morningstar Canada fund indices gained ground, according to preliminary data on investment-fund performance released today by Morningstar Canada. The lone exception was the Canadian high income equity fund index, whose constituent funds include many that invest heavily in income trusts.

Income trusts were hit with a nasty surprise from the federal government on Halloween night when Finance Minister Jim Flaherty announced that their distributions would be subject to a new tax. The next day, the high income equity fund index took a 7% hit, though many individual funds lost much more. These funds have since regained some of the lost ground, and the index finished the month with a 4.7% loss.

“Many institutional investors went bargain-hunting for trusts with strong and stable businesses that may have been oversold at the beginning of the month,” said Morningstar Canada senior fund analyst Mark Chow.

Funds that focus on gold and precious metals offered the best performance in November, as they have done many times since the beginning of the year. The precious metals equity fund index gained 13.2% for the month, adding to its already impressive year-to-date tally, which now stands at 53%.

“The return of the fund index slightly trailed that of the S&P/TSX Capped Gold Index, which was up 14.3%, while the price of gold itself rose roughly 5% in November and is up 22% for the year,” Chow said.

The second best performing fund index in November was Asia Pacific Rim ex-Japan equity with a 9.6% gain, while emerging markets equity was third with 8.1%.

The Canadian and U.S. dollars slipped against most of the world’s major currencies in November, which helped foreign equity funds to generally outperform their North-American equivalents last month. Most notably, the loonie fell more than 5% against the euro, nearly 3% versus the yen and 1.7% against the greenback. Among the small-cap equity categories, the global small/mid cap equity fund index gained 5.4%, while U.S. small/mid cap equity, Canadian small/mid cap equity and Canadian anchored small/mid cap equity were up 4.2%, 3.2% and 2.7% respectively.

While emerging markets clearly dominated the performance charts in November, the returns produced by funds that invest in the world’s more developed markets were nothing to sneeze at. European equity funds continued their excellent run by posting a collective return of 4.8% last month.

Elsewhere, the international equity fund index was up 4.1%, global equity gained 3.7% and U.S. equity returned 3.5%. The best performing Canada-focused diversified fund index was Canadian anchored equity with a one-month gain of 3.3%, followed closely by Canadian equity with 3.2%.

In a trend that is very similar to one observed in October, the top of the fund index rankings was stacked exclusively with equity-based categories in November, while the various portfolio categories occupied the middle ground and fixed income groupings were relegated to the bottom.

Once again, the highest return among portfolio categories in November belonged to the equity-heavy 15+ year target date portfolio fund index (up 3.2%), which includes life-cycle funds that have maturity dates longer than 15 years. The worst performing portfolio fund index was global fixed income tilt portfolio, which was flat for the month.

While fund indices that represent fixed-income categories significantly trailed their equity-based counterparts, they still offered relatively decent returns last month. The best of this group was global fixed income, whose 2.7% gain is by far the highest monthly return this index has had so far this year. Canadian long duration fixed income was second with a 1.5% gain while Canadian High Yield Fixed Income was third with 1.3%.

Final performance figures will be published next week.