Sat, Sep 20, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Morningstar reports positive Q3 performance for E.M., European, international equity funds

Monday, October 19, 2009
From the Opalesque team: Morningstar, Inc. has reported the positive performance of its foreign equity funds domiciled in Europe and Asia in the third quarter.

In a statement (Source), the investment research firm said the Morningstar Emerging Markets Equity Fund gained 12.3% for the quarter, while European Equity and International Equity were up 12% and 10.5%, respectively, preliminary data indicated.

Morningstar, an international data provider, said the preliminary results fell short of expected returns posted in local currency terms by market indices including the UK's FTSE 1000 (20.8%), France's CAC 40 (20.9%), and Mexico's IPC (20%) because the Canadian dollar appreciated significantly against many currencies including the UK pound (11.4%), the euro (3.9%), and the Mexican peso (11%).

The Morningstar U.S. Equity Fund posted a 7% return for the quarter, which was half of the benchmark S&P 500 Index (15.6%) due to the weakness of the U.S. dollar at that time.

Fixed income categories hit double-digit returns

The Morningstar High Yield Fixed Income Fund Index, whose constituent funds invest in lower quality issues, had its second consecutive double-digit quarterly return with a 10.3% gain, while, the more conservative bond categories also registered positive returns.

“Reflecting the market's renewed appetite for risk were the performances of the various fixed income categories. Investment funds that focus on small-capitalization equities and those that target specific sectors dominated the performance rankings in the third quarter of 2009, as investors continued to reinvest their cash in riskier assets as they did in the second quarter,” said company analyst Christian Charet in the commentary.

The fixed income markets continued to show signs that confidence is returning, as a number of new issues came to market and credit spreads closed.

The only fund indices that failed to gain ground in the third quarter were Greater China Equity, down 0.5%, and Japanese Equity, down 3.1%.

Funds tracked went down

Industry consolidation continued to gather pace throughout the third quarter. The universe of European-domiciled funds continued to contract, with fund closures in 2009 surpassing fund launches for the first time since the start of the credit crunch.

From the 38,238 funds in European domiciles tracked by Morningstar as of 1st January 2009, approximately 2,968 have closed, while 1,560 funds have been launched. At the current rate of contraction, a total of 3,957 funds are projected to close by year-end, with new launches of 2,080 funds projected. That equates to net closures of 1,877 funds - roughly five per cent of the European domiciled fund universe.

“The industry is showing signs of significant contraction and while we believe this is for the best, we also believe there are significant dangers to investors,” said Christopher Traulsen, CFA, director of fund research for Morningstar Europe and Asia. “During the boom years we saw too many funds launched in an attempt to grab assets, and many funds were unable to gain economies of scale and have had to pay high fees for distribution. This has led to high costs for fund investors."


Be

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. SEC charges 19 investment firms and one trader for breach of Rule 105[more]

    Benedicte Gravrand, Opalesque Geneva: The Securities and Exchange Commission (SEC) started a push to enhance the enforcement of Rule 105 of Regulation M last year to uncover hedge funds and private equity firms that have illegally participated in an offering of a stock after short selling it duri

  2. Fund managers, bullish on Europe, anticipate monetary policy separation of Fed and ECB[more]

    Komfie Manalo, Opalesque Asia: At least 202 fund managers with $556bn of assets under management said that while the European Central Bank (ECB) has eased its monetary policy that sent sentiments towards Europe to pick up, the Fed is expected to hike its rate in the spring of 2015. Investor

  3. Institutions - North Carolina workers call on state pension to dump up to $6bn in hedge funds, UK pension fund criticizes hedge fund fees[more]

    North Carolina workers call on state pension to dump up to $6bn in hedge funds From Forbes.com: The State Employees Association of North Carolina this afternoon called on state Treasurer Janet Cowell to withdraw all investments in hedge funds, which appear to amount to approximately $6 b

  4. News Briefs - Limited partners of investment managers may be subject to self-employment taxes, Just one week left until NYC's Rocktoberfest[more]

    Limited partners of investment managers may be subject to self-employment taxes On September 5, 2014, the Internal Revenue Service (“IRS”) issued Chief Counsel Advice 201436049, concluding that members of an investment manager were subject to self-employment taxes with respect to their e

  5. Institutions - Adviser's faith in hedge funds unshaken by CalPERS' move Advisers weigh in on CalPERS’ decision, Gina Raimondo sees no reason to follow California’s lead, exit hedge funds, Danish pension funds step up 'alternative investments'[more]

    Adviser's faith in hedge funds unshaken by CalPERS' move From WSJ.com: Financial advisers who use hedge funds in their clients' portfolios say they aren't rethinking that approach after a huge California pension fund announced plans to exit the hedge-fund market. The decision by the Cali