November was a winning month for mutual funds, led by another strong performance resource stocks. According to preliminary data, all 32 of the Morningstar Canada fund indices posted positive one-month returns, compared with 20 in October.

The month’s best performer was the Natural Resources Fund Index, with a one-month return of 7%, followed by the Latin American Equity index at 6.4%, and the Canadian Small Cap Equity index at 6%.

The worst performers were the U.S. and Canadian money market fund indices, which managed minimal returns of 0.02% and 0.04% respectively.

Natural Resources funds were fuelled by a rebound in the price of crude oil, said Morningstar Canada analyst Mark Chow. “Oil peaked in late October at over US$55 a barrel, and slumped during the middle of November to well below US$50, as speculators feared higher U.S. inventories,” he said. “But the price surged back to the mid-century mark as difficulties persisted at Yukos, Russia’s largest oil producer. As well, speculation that OPEC may scale back output hit the rumour mill, reinvigorating prices.”

The Precious Metals Fund Index was on the heels of Natural Resources throughout most of the month, and had compiled a 6% month-to-date return as of Nov. 29, before falling back on the last day of the month. The index ended with a 3.4% one-month return, the month’s 10th best performer. It remained the worst year-to-date performer, down nearly 9%.

“The price of gold climbed above US$450 an ounce during November, a level gold bugs have not seen in 16 years,” Chow said. “Much of gold’s strength has originated from the weakness in the U.S. dollar as the greenback hit all-time lows versus the euro in November.”

The Canadian Equity Fund Index slightly outperformed the U.S. Equity Fund Index, with a return of 2.41% compared with 2.39% for its U.S. counterpart. Both categories beat their respective benchmarks as the S&P/TSX Composite and the S&P 500 Composite returned 1.8% and 1.3% respectively. However, stripping out the U.S.-Canadian-dollar exchange rate effect, the S&P 500 returned nearly 3.9%, easily outperforming its Canadian counterpart.

“The S&P/TSX composite index reached heights during the month not seen since early 2001, closing above 9,000,” Chow said. He noted that index has been lifted by commodity-based business.”

These preliminary numbers are based on the change in funds’ net asset values per share during the month, and do not necessarily include end-of-month income distributions such as dividends, interest or capital gains. Final performance figures will be published by mid-month.