Funds focused on income trust and other segments of the Canadian equity market rebounded in November, according to preliminary data released today by Morningstar Canada.

The Canadian income trust fund index was the month’s top performer, gaining 7.7%, as all but two of the 31 Morningstar Canada fund indices posted positive one-month returns.

Income trust prices were given a lift by the Liberal government’s proposal to even the taxation playing field between income trusts and dividend-paying stocks, as opposed to going the other direction and hiking taxes on income trusts, said Morningstar Canada analyst Brian O’Neill. “Investors reacted sanguinely to the news, and both dividend paying stocks and trusts enjoyed a swift valuation kick.”

Meanwhile, funds that invest in gold and other precious metals continued their volatile ways, this time making the precious metals fund index the month’s second best performer with a 7.2% gain. This index posted the best returns in September and June, but was the worst performer in April and January. It was the seventh worst performing fund index in October, losing 4.7%.

Both gold and platinum passed key milestones in November, with gold breaking through US$500 an ounce and platinum passing US$1,000. “After gold started the year at US$436, countless factors have caused its price to rise, including hefty Asian demand and the metal’s role as a hedge against global inflationary pressures and economic shocks,” O’Neill said.

The emerging markets equity fund ondex enjoyed another strong month, gaining 6.7%, and is up 22.5% since the beginning of 2005. Among the domestic equity fund indices, Canadian small cap equity and Canadian dividend stood out, rising 5% and 4.8% respectively.

The two fund indices that were in negative territory in November were foreign bond, down 1.4%, and Canadian short term bond and mortgage, off 0.04%. The two other bond fund indices, Canadian bond and high yield bond, barely broke even.

All of Morningstar’s equity-based fund indices had positive one-month returns in excess of 1% in November. Among the major categories, Canadian equity gained 3.9%, U.S. equity was up 3.2% and global equity rose 2.1%.

The top fund index year-to-date remained natural resources, which added 4.7% in November and is up 35.7% since Jan. 1. Emerging markets was the next best YTD performer, up 22.5%. Foreign bond remained the worst YTD performer, down 6.8%.