All Canadian equity sectors ended May with losses, and only eight of the 42 categories tracked by Morningstar Canada Fund had flat or positive results.

Fixed-income categories experienced the best results, with Canadian long-term fixed income and inflation-projected fund up 4.1% and 3.9% respectively.

“Investors continue to ignore the prospect of rising rates and are flocking to the safety they perceive in fixed income,” says Morningstar Fund analyst Nick Dedes. “That popularity is driving yields lower and prices higher.”

There were only slight decreases in real-estate equity (0.2%) and health-care equity (0.5%), making the sectors them two best performers among all categories.

Meanwhile, natural-resources equity funds plunged 10.2%, reflecting a drop of 14% in the price of Brent crude oil as concerns heightened about weakening economic growth and the slowing demand for fuel.

The European equity index slumped 7.8%, the worst regional equity performance in May—pressure on the Spanish banking sector, the Greek election in coming weeks and JP Morgan losses all weighed heavily on results.

Most overseas markets also suffered substantial losses, with the Japanese (5.7%) and greater China equity index (7%) falling.

And North America wasn’t immune; in Canada, where high levels of household debt and expensive homes are a concern, the equity market slipped by 6%. The U.S market only dipped 4%.

Copyright © 2020 Transcontinental Media G.P. Originally published on benefitscanada.com

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