The booming resource sector continued to fuel robust returns for holders of mutual funds that focus on these segments of the market in October.

The month also saw continued growth in the world’s emerging markets, which translated into solid gains for many foreign equity fund categories, according to preliminary performance data released today by Morningstar Canada.

Thirty of the 42 Morningstar Canada Fund Indices had positive returns for the month, led by the Morningstar precious metals equity fund index and its 8.6% gain.

“We’re not particularly surprised by the spectacular performance of precious metals funds in light of the price of gold climbing to its highest level since 1980,” says Bhavna Hinduja, fund analyst with Morningstar Canada.

The second best performing fund index was Asia Pacific ex-Japan equity, which gained 5.7% for the month despite depreciations in excess of 4% in the currencies of China, Hong Kong and South Korea versus the Canadian dollar. In particular, the Hong Kong Hang Seng index was up 15.5% and the Shanghai composite was up 7.2%.

Strength in Asia also benefited funds in the broader emerging markets equity category, which on average allocate nearly half of their assets to Asian markets. But these funds also got a helping hand from Latin American markets such as Mexico and Brazil, whose main stock indexes rose by 3.8% and 7.2%, respectively. The emerging markets equity fund index was the third best performer in October with a gain of 5.3%.

Surging commodity prices were a boon for natural resources funds; the natural resources equity fund index ended the month with a fourth-best 5.1% return.

Resource-rich Canadian equity funds also did well, particularly those that target smaller domestic companies: The Canadian focused small/mid cap equity and Canadian small/mid cap equity fund indices gained 4.9% and 4% and ranked fifth and sixth, respectively. Meanwhile, the Canadian equity category returned 3.5% for the month and came in seventh.

The U.S. equity fund index was near the bottom of the rankings with a 2.7% loss for the month, though this was again due to currency effects.

The strength of the Canadian currency also hit other foreign equity categories. The Japanese equity fund Index lost a 5.2%, while the European equity fund index lost 0.5% for the month.

As well, the international equity fund index shed 0.4%, and the global equity fund index was down 0.8% in October.

Morningstar will publish final performance figures next week.