Most Fund Categories Tumble in August

By Andrew Rickard | September 04 2015 10:42AM

Morningstar Research says that most of its fund indices declined last month. Only four of its 42 categories recorded gains, while 26 of them posted losses of 3% or more.

photo_web_2102The top performers last month were all funds in the precious metals equities category, which increased by 3.8% after posting a 16.2% decrease in July. Morningstar notes that the only other funds that did not decline were in the three indices that track risk-free money market categories, and that these only posted modest gains.

The worst performers in August were in Morningstar's Greater China Equity category, which sank by 10.8% due to double-digit losses on both the Hong Kong and Shanghai stock exchanges. "This marks the third consecutive monthly decrease for the index, which has lost more than 20% since the beginning of June after being the best performer during the first five months of 2015 with a 28.1% increase in that period," says Morningstar, which points out that the Asia Pacific Equity, Emerging Markets Equity, and Asia Pacific ex-Japan Equity categories also posted heavy losses last month, decreasing by 7.6%, 8.3%, and 8.8% respectively.

Domestic equities fared slightly better, with the Canadian Dividend & Income Equity and Canadian Small/Mid Cap Equity categories each recording a decrease of 3.6%, followed by the Canadian Equity category which declined by 3.9%. Morningstar points out that its Canadian Focused Equity and Canadian Focused Small/Mid Cap Equity fund indices have larger allocations to foreign stocks and therefore finished lower in the rankings with decreases of 4.2% and 4.6% respectively.

All seven of Morningstar's fixed-income fund indices were also in the red last month, dropping between 0.3% and 4.2%. The investment research company says this is unusual for a period in which equity markets also saw declines.