U.S. equities rebounded from third-quarter losses as corporate earnings were better than initially expected. U.S. economic and employment growth were solid despite tepid or slowing expansion in other parts of the world. Corporate merger activity and anticipation of additional stimulus measures in Europe were also supportive. The Federal Reserve began to raise short-term interest rates in mid-December, but this widely expected move did not derail the broad equity market, nor did continued commodity price weakness. Large-cap shares outperformed small- and mid-caps for the quarter, and growth stocks outperformed value stocks across all market capitalizations.
The Total Equity Market Index Fund returned 6.37% in the quarter compared with 6.28% for the S&P Total Market Index and 4.90% for the Lipper Multi-Cap Core Funds Index. For the 12 months ended December 31, 2015, the fund returned 0.33% versus 0.47% for the S&P Total Market Index and −1.47% for the Lipper Multi-Cap Core Funds Index. The fund's average annual total returns were 0.33%, 12.00%, and 7.31% for the 1-, 5-, and 10-year periods, respectively, as of December 31, 2015. The fund's expense ratio was 0.30% as of its fiscal year ended August 1, 2015.
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 Total Equity Market Index Fund charges a 0.5%
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 portfolio provides investors with exposure to the entire U.S. stock market by tracking the Standard & Poor's Total Market Index, which includes large-, mid-, small-, and micro-cap companies. Information technology and financials are the largest components of the index. The health care, information technology, and materials sectors produced strong results. Facing continued pressure from declining oil prices, energy was the only sector to record a loss for the period.
While heightened volatility is likely, there are reasons to take a cautiously optimistic view about equity returns overall despite the difficult environment that the energy and industrial sectors will likely continue to face. The U.S. economy seems poised to continue its growth trend. The Fed's normalization of monetary policy is expected to proceed at a gradual pace, and the global monetary environment should remain supportive as many central banks continue to pursue accommodative policies. A continuation of the global boom in mergers and acquisitions along with high levels of share buybacks could also support equity markets.