Non-U.S. stocks endured a tumultuous quarter and finished the period little changed from the end of 2013. Developed markets generated mixed results in March, following seesaw returns in January (lower) and February (higher). European markets performed best, led by Denmark, Ireland, and Italy, as eurozone economies, especially those in the periphery, continued to emerge from recession. Developed Asian markets were hurt by moderate losses in Japan and Hong Kong amid slowing economic growth in China. Emerging markets equities fell slightly amid slowing growth in various economies and geopolitical tensions related to Ukraine.
The International Equity Index Fund returned 0.59% in the quarter compared with 0.61% for the FTSE All World Developed ex North America Index and 0.08% for the Lipper International Large-Cap Core Funds Average. For the 12 months ended March 31, 2014, the fund returned 16.73% versus 17.33% for the FTSE All World Developed ex North America Index and 15.46% for the Lipper International Large-Cap Core Funds Average. The fund's average annual total returns were 16.73%, 15.86%, and 6.50% for the 1-, 5-, and 10-year periods, respectively, as of March 31, 2014. The fund's expense ratio was 0.50% as of its fiscal year ended October 31, 2013.
For up-to-date standardized total returns, including the most recent month-end performance, please click on the Performance tab, above.
Current performance may be lower or higher than the quoted past performance, which cannot guarantee future results.
Share price, principal value, and return will vary and you may have a gain or loss when you sell your shares.
The International Equity Index Fund charges a 2%
redemption fee on shares held 90 days or less.
The performance information shown does not reflect the deduction of the redemption fee;
if it did, the performance would be lower.
The fund strives to match the performance of the FTSE All World Developed ex North America Index, which includes major markets in the UK, Japan, and developed countries in Europe and the Pacific Rim. It is constructed by sorting the market in each country in the index by industry groups and targeting a significant portion of the stocks in these groups for inclusion. The fund attempts to replicate the index by investing in stocks in proportion to their weighting in the index. Utilities and health care generated very strong returns for the quarter, followed by the energy sector. Consumer staples and industrials and business services sectors were both positive, slightly outpacing the index. Financials, information technology, materials, consumer discretionary, and telecommunication services sectors all returned losses.
We believe Europe's anemic economic recovery will continue as austerity gradually eases and the U.S. recovers. Although optimistic about Japan's longer-term prospects, we are looking for signs that its policymakers will address key structural reforms. Emerging markets face slower growth amid a fading commodity super cycle and much slower growth in China. Over the longer term, we believe that the secular growth drivers for the emerging market asset class remain in place. Shareholders should note that we do not make investment decisions based on market forecasts or prospects for individual companies. Rather, our mission is to provide low-cost exposure to non-U.S. equities through a diversified portfolio designed to replicate the performance of our benchmark index in all market conditions.