Mutual funds that focus on gold and other precious metals chalked up another month of fantastic performance in April, according to preliminary data released today by Morningstar. The Morningstar Canada precious metals fund Index posted a 10.2% return for the month, its third double-digit monthly gain so far this year.

The index returned 13.7% in March and 18.1% in January but stumbled in February with a 3.7% loss.

“It was a great month for precious metals overall,” said Morningstar analyst Mark Chow, in a release. “Gold finally broke through the US$600 ceiling and rose nearly 10% to the mid-US$600s per ounce. Continued geopolitical tension in the Middle East, supply fears and strong demand for the yellow metal appear to be the drivers.”

“Other precious metals such as platinum and silver saw high-single-digit increases for April and boast double-digit gains for the year,” Chow added.

The natural resources fund index was a distant second in the monthly performance ranking with a 4.4% gain. “Though precious metals stole much of the thunder last month, base metals also fared very well. Copper, for instance, rose by more than 30% in April and hit all-time highs amid fears of a supply shortage, stoked by news of strike action at several mines,” Chow said.

Fund indices that represent sector-specific categories also occupy the bottom two spots of the April ranking. After five consecutive months of slow but steady progression, the healthcare fund index lost 5.3% in April, the worst performance among all fund indices. In next-to-last place, funds in the ever-volatile science and technology category had another negative swing last month, collectively losing 3.2% after a healthy 4.7% bounce in March.

Both of these sectors have hefty holdings in U.S. stocks and were hit by the more than 4% depreciation of the U.S. dollar against the loonie. The falling greenback also had an adverse effect on the U.S. equity and U.S. small and mid cap equity fund indices, which lost 2.5% and 2.2% respectively. Without the currency effect, the S&P 500 index actually gained 1.2%, but when expressed in Canadian dollars, it lost 2.8%.

On the home front, it was a positive but unexciting month for funds in the broadly diversified Canadian equity (pure) and Canadian equity categories. The two indices representing these funds gained 0.8% and 0.7% respectively, basically matching the return of the S&P/TSX composite index. The Canadian small cap equity fund index, whose constituent funds are generally more concentrated in resources, did much better, rising 3.4%.

The Bank of Canada raised its key rate by a quarter of a point in April, the sixth consecutive time it has done so since September. “This increase in rates has hurt some of the interest sensitive areas in the market such as income trusts and dividend-payers,” Chow said. Funds in the Canadian income balanced and Canadian dividend categories felt the effects of this, as both of these fund indices lost value for the first time since last October, shedding 0.5% and 0.7% respectively.

Overseas, the Asia ex-Japan equity fund index was up 2.5%, while emerging markets equity gained 2.1%. Meanwhile the European equity fund index gained 1.1% for the month and is up more than 13% year to date on the heels of a strengthening German economy. Among other foreign equity fund categories, the international equity fund index was up 0.3% while global equity lost 0.6%.

The Japanese equity fund index continued its volatile ways in April with a 2% loss.

Morningstar Canada releases preliminary fund performance figures at the beginning of each month. Final performance figures will be published on at mid-month.