Morningstar Canada is reporting that the median mutual fund lost 0.4% in August as 59% of funds lost money for the month. During the last five months the median fund has lost 11.5%. “This is the longest stretch of negative monthly performance in 15 years,” says Morningstar analyst Iain Giles. “It also represents the deepest five-month loss since 1988-a period that included the ’87 crash.”

Leading the retreat in August were internationally focused funds, particularly in the Pacific Rim. The median U.S equity fund lost money (-1.3%) and three of the Canadian stock categories were also in negative territory for median returns: Canadian equity (-0.3%); Canadian small cap equity (-0.5%); and Canadian large cap equity (-0.3%). Canadian dividend funds managed to stay positive at 0.5% and there was good news in the precious metals (14.1%), Latin American equity (3.9%) and natural resources (3.7%) categories.

As for individual fund sponsors, four of Mackenzie Financial Corp.’s funds lost their five-star status in August, leaving the firm with 16. Despite the loss, the firm remains the industry leader in terms of number of five-star funds offered. Gaining two five-star offerings and maintaining its hold on second place was CI Mutual Funds Inc., which now boasts 12 top-rated funds. Rounding out the top four firms were AIM Funds Management Inc. and Clarica Mutual Funds with ten and nine five-star funds, respectively. Three other companies, Franklin Templeton Investments Corp, Great West Life Assurance Co. and TD
Mutual Funds, tied for fifth spot with eight top-rated funds.

Overall, 196 funds qualified for a five-star rating as of August 31. Thirteen of those moved up from a four-star rating the previous month, while eight qualified for the top rating in their initial periods of rating eligibility. These funds included CI International, McLean Budden Canadian Equity Value, Templeton Global Smaller Companies RSP and Trimark RSP Select Growth.