Canadian Funds Start 2003 in Negative Territory

February 14, 2003 (PLANSPONSOR.com) - The new year picked up where 2002 left off in Canada, with 26 of 32 Canadian Morningstar Fund Indices ringing up negative returns in January.

Eighty-eight percent of Canada’s funds ended January lower. The International Equity Fund Index had the worst returns in January with a loss of 7.4%. Right on its heels was the European Equity Fund Index, lower by 7%, and the Latin American Equity Fund Index that was down 6.7%, according to Morningstar’s survey of more than 4,500 Canadian mutual funds.

The other red ink returns in January included:

  • Global Equity Fund Index down 5.6%
  • US Equity Fund Index losing 5%
  • Canadian Equity Fund Index off 2%
  • Canadian Balanced Fund Index lower by 1.8%
  • Canadian Bond Fund Index down 0.6% .

January’s gainers were minor.   The biggest increases were in the Canadian Income Trust Fund Index, up a slight 1.5%, followed by the High Yield Bond Fund Index eking out a 0.8% increase,  the Real Estate Fund Index slightly higher at 0.4% and the Canadian Money Market Fund Index, better by a scant 0.2%.

Encore Performance?

Morningstar said that January does not necessarily call for an encore of 2002.  “While US Equity funds have shown a tendency to follow January’s performance, Canadian and International Equity funds have not demonstrated the same relationship,” says Morningstar’s Rob Chang.

Calendar year returns of US Equity funds have followed the trend of their January performance in 14 of the last 15 years.  However, Canadian and International Equity funds have only mimicked their January returns in nine out of the last 15.

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