Energy recovery continues in June; Canadian equity funds lead in Q2

Asian and emerging markets equity funds were the quarter's worst performers.

Christian Charest 4 July, 2018 | 5:00PM

The rally in energy stocks that began in March produced a fourth consecutive month of strong performance, with the S&P/TSX Capped Energy Index gaining 2.5% in June. Compounded with the index's 1.6% gain in May and its 12.3% surge in April, the energy sector produced a 16.9% total return in the second quarter of 2018. Besides fueling funds in the Energy Equity and Natural Resources Equity categories, which were the best performers overall with gains of 14.1% and 10.1% respectively for the quarter, the sector was the main contributor to the strong showing by diversified Canadian stock funds.

The Morningstar Canadian Equity Fund Index was the third-best performer in the second quarter among the 47 Morningstar Canada Fund Indices, which measure the aggregate returns of funds in various standard categories. It gained 6.2%, reflecting increases of 1.6% in April, 2.8% in May and 1.6% in June, according to preliminary performance data released today by Morningstar Canada.

Funds that invest in U.S. stocks were also among the best performers in the second quarter. The Morningstar U.S. Small/Mid Cap Equity Fund Index gained 5.6% while the fund index that tracks the larger-cap U.S. Equity category gained 4.4%. The S&P 500 Index had a total return of 3.4% for the three-month period, but Canadian investors also benefited from a 2.1% appreciation of the U.S. dollar versus its Canadian counterpart.

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Christian Charest

Christian Charest  

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