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SOURCE Morningstar, Inc.
TORONTO, Jan. 3, 2018 /PRNewswire/ -- Morningstar Research Inc., a Canadian subsidiary of Chicago-based independent investment research provider Morningstar, Inc. (NASDAQ: MORN), today released preliminary 2017 year-end performance data for its 44 Morningstar Canada Fund Indices, which measure the aggregate returns of funds in various standard categories. Forty-one of the 44 fund indices increased during the calendar year, including 12 indices that increased by 10% or more.
Highlights from Morningstar's 2017 year-end preliminary performance report include:
- The best performer among the 44 Morningstar Canada Fund Indices was the one that tracks the Greater China Equity category, with a 35.9% increase, mirroring the 36.0% increase of Hong Kong's Hang Seng Index. Funds in this category that hedge their currency exposure will likely outperform their peers that do not, since the Hong Kong dollar depreciated by 7.3% against the Canadian dollar during the year.
- Other market indexes in the Asia/Pacific region also performed well last year, including South Korea's KOSPI, Japan's Nikkei 225, and the Taiwan Stock Exchange Weighted Index, which increased 21.8%, 19.1%, and 15.0%, respectively. As a result, the fund indices that track the Asia Pacific Equity and Asia Pacific ex-Japan Equity categories finished 2017 among the top performers with increases of 24.9% and 25.7%, respectively. The strength of Asian stocks also helped funds in the Emerging Markets Equity category, which collectively increased 24.3%.
- European equity funds benefited from a combination of strong market performance and favourable currency movements, and the Morningstar European Equity Fund Index posted a 14.6% increase for the year. Germany's DAX Index increased 12.5% in 2017 when measured in local currency, while France's CAC 40 and the United Kingdom's FTSE 100 were up 9.3% and 7.6%, respectively. Meanwhile, the euro and UK pound appreciated by 6.2% and 2.4%, respectively, against the Canadian dollar.
- In the United States, the S&P 500 Index posted a total return of 21.8%-its ninth consecutive calendar year in positive territory and best performance since 2013. However, Canadian fund investors only captured a fraction of this gain as the Morningstar U.S. Equity Fund Index increased 13.2% for the year, hampered by the loonie's 7% appreciation against the U.S. dollar.
- Domestic equity funds had positive results for the year but trailed their foreign counterparts. The Morningstar Canadian Equity Fund Index increased 7.7%, underperforming the benchmark S&P/TSX Composite Index which had a total return of 9.1%, while the fund indices that track the Canadian Dividend & Income Equity and Canadian Small/Mid Cap Equity categories were up 7.9% and 3.2%, respectively. Among Canada's three largest stock sectors, financial services and basic materials both contributed positively with total returns of 13.3% and 7.7%, respectively, while energy was a detractor with -10.6%.
- The worst-performing equity fund indices were Natural Resources Equity and Energy Equity, which decreased 3.4% and 13.1%, respectively. Though they partially recovered in the second half of the year, funds in these two categories suffered substantial losses in the first six months as oil prices tumbled.
- Despite the interest rate hikes enacted by central banks in many countries including Canada and the United States, seven of the eight fund indices that track fixed-income categories increased in 2017. By far the best-performing fund index in this area was Preferred Share Fixed Income with a 14.1% increase. Second-best was Canadian Long Term Fixed Income, one of the categories most sensitive to interest rates, which finished the year with a 6.3% increase, suggesting that the market may have been expecting more meaningful rate hikes from the Bank of Canada. The only fixed income category in the red was Canadian Inflation-Protected Fixed Income, down 0.03%.
To view the complete report about Morningstar's preliminary 2017 year-end performance data for Canadian funds, please visit https://goo.gl/Z21FoM.
Morningstar Canada's preliminary fund performance figures are based on change in funds' net asset values per share during the month, and do not necessarily include end-of-month income distributions. Final performance figures will be published on www.morningstar.ca next week.
About Morningstar Research Inc. and Morningstar, Inc.
Morningstar Research Inc. is a Canadian subsidiary of Chicago-based Morningstar, Inc., a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offers an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors, and institutional investors in the private capital markets. Morningstar provides data and research insights on a wide range of investment offerings, including managed investment products, publicly listed companies, private capital markets, and real-time global market data. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than US$220 billion in assets under advisement and management as of Sept. 30, 2017. The company has operations in 27 countries.
©2018 Morningstar, Inc. All rights reserved.
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