Thirty-nine of the 44 Morningstar Canada fund indices increased during 2016, including 10 that increased by 10 per cent or more. Canadian stocks had their best calendar year performance since 2009 with the S&P/TSX Composite Index posting a total return of 21.1 per cent. The five Canada fund indices that track domestic equity fund categories all ended the year among the best performers, with increases ranging from 11.8 per cent to 17.9 per cent. Canada’s three largest sectors ‒ financial services, energy, and basic materials ‒ all contributed positively with total returns of 24.2 per cent, 39.6 per cent, and 41.2 per cent, respectively. Currency effects detracted from performance for most foreign equity fund categories during 2016 as the Canadian dollar appreciated against many of the world’s major currencies. This was most notable in the European equity category where funds collectively lost 5.5 per cent despite strong market performances in France, Germany, and the United Kingdom.
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