Mutual funds bolt out of gate in January

OTTAWA — Canadian mutual funds had a stellar month in January, with all of the 42 funds tracked by research firm Morningstar posting positive results for the month.

The month was particularly good for equity funds. All of the 24 equity fund categories followed by Morningstar recorded gains of more than two per cent.

Even the European equity-fund category advanced 3.3 per cent despite the region’s continuing sovereign-debt problems.

The best performing funds were those that invest in riskier asset types. The top performer was the fund index that tracks the precious metals equity category, which rose 12.2 per cent for the month, Morningstar said.

It was followed by emerging markets (up 9.2 per cent), greater China equity (up 8.7 per cent) and Asia-pa- cific ex-japan (up 7.1 per cent).

Also faring well were Canadian-focused small- mid-cap equity (up 6.1 per cent), Canadian small- midcap equity (up 5.3 per cent) and global small- mid-cap equity (up five per cent).

During the month, Canada’s benchmark S&p/tsxcomposite index advanced 4.16 per cent.

“Widespread strength in riskier asset categories is an indication that broader macro factors, rather than company-specific events, are once again driving market movements,” said fund analyst Nick Dedes.

“While there were a number of U.s.-listed companies that reported estimate-beating earnings, it’s likely that steps toward a solution in Europe and accommodative centralbank policies had an outsized influence on the month’s results.”

Fixed-income funds also performed well, which is unusual when equity markets are doing well, indicating part of the investing public has less conviction about riskier assets, Morningstar said.