Fixed income was king in February: Morningstar data

Morningstar’s Canada fund indexes had a rough month in February, with only seven out of 44 increasing over that period, according to preliminary data released on Friday.

None of the seven indexes increased by more than 0.7%, Morningstar said in a release, while 12 of the 37 losing indexes fell 2% or more.

The top-performing indexes all tracked fixed income, the research firm adds, with the Morningstar Floating Rate Loans Fund index coming out on top: it rose 0.7%, while three other fixed income fund indexes rose between 0.1% and 0.3%.

In contrast, equity indexes were hit by February’s market dip. “All of the 22 fund indices that track equity categories were […] in the red,” the release says. After all, “Every major stock market in the world was down in February, with losses typically ranging from 3% to 6%.”

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One upside for many foreign fund categories was their losses were limited to 1% or less due to “the Canadian dollar [depreciating] against most foreign currencies,” says Morningstar.

Among its equity categories, the best-performing fund index was the Asia Pacific Equity, which dipped 0.01%. That was followed by theGlobal Small/Mid Cap Equity (down 0.04%) and the U.S. Small/Mid Cap Equity (down 0.2%).

Morningstar’s worst-performing fund indexes were “the ones that track the Energy Equity, Precious Metals Equity, and Natural Resources Equity fund categories, decreasing 7%, 5.7%, and 5.3%, respectively,” it says.

Even though fixed income prevailed, the research firm notes that not all of its fixed income fund indexes ended the month on a high note. “Three fixed-income fund [indexes] ended the month in negative territory, the worst of which was the Morningstar Preferred Share Fixed Income Fund Index, which decreased 1.0%,” the release says.

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Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.