Mutual funds in Canada that invest in domestic equities posted gains in August, while those that target foreign markets saw generally flat or negative performance as 12 of the 22 Morningstar Canada Fund Indices increased during the month. For the second consecutive month, the best-performing fund index was the Precious Metals Equity, which increased by 12.1 per cent in August. This followed its 9.6 per cent increase in July as the gold rally continued, with low prices boosting demand for jewelry, bars, and coins in Asia. However, despite these two solid months of performance, precious metals funds are still deep in negative territory for the year to date after a 46 per cent decline in the first six months of 2013. For most foreign equity funds, market declines in the United States and many European and Asian countries were mitigated by the depreciation of the Canadian dollar against many of the world’s currencies in August. A notable exception was the Greater China Equity Fund Index, which was the second-best performer overall with a 4.1 per cent increase, owing to a strong gain in the Shanghai Composite Index as well as favourable currency effects.
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