Stocks in Asia ex-Japan slumped as China's efforts to stem a stock market sell-off and its currency devaluation in August highlighted the country's economic slowdown. China's unexpected move to let the yuan decline raised fears that other countries would devalue their currencies to make their exports more competitive and caused currencies to sink across the region. Most Asian markets posted double-digit losses. Chinese A shares fell the most, roughly 33%, while markets in Indonesia and Malaysia each dropped nearly 20% as declining commodities prices weighed on their resource-driven economies. Stocks in the Philippines and India held up better with single-digit declines. India's pace of economic growth largely disappointed investors, however, and its central bank announced a surprisingly large interest rate cut in August.
The New Asia Fund returned −14.13% in the quarter compared with −16.94% for the MSCI All Country Asia ex Japan Index and −14.17% for the Lipper Pacific Ex Japan Funds Average. For the 12 months ended September 30, 2015, the fund returned −11.21% versus −12.15% for the MSCI All Country Asia ex Japan Index and −12.18% for the Lipper Pacific Ex Japan Funds Average. The fund's average annual total returns were −11.21%, 0.94%, and 8.92% for the 1-, 5-, and 10-year periods, respectively, as of September 30, 2015. The fund's expense ratio was 0.94% as of its fiscal year ended October 31, 2014.
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China, Hong Kong, and India represented the fund's largest absolute country positions. Our holdings in China are concentrated in Internet, consumer staples, and clean energy companies. Hong Kong and India accounted for the largest overweight markets relative to the benchmark. On the other hand, South Korea and Taiwan remained significant underweight markets due to a lack of attractive growth opportunities. We eliminated our exposure to Malaysia, which has been hit by the commodities downturn and rising political instability. Sector allocations reflect our preference for areas driven by domestic consumption. Information technology and consumer discretionary were the largest overweight sectors as of September 30, 2015, while telecommunication services was the largest underweight.
Slowing economies, currency weakness, and the prospect of the Federal Reserve's first interest rate increase in many years have raised worries that Asia will experience significant outflows and a possible repeat of the 1997-1998 financial crisis. Rather than another full-blown currency crisis in the region, we think that continued deceleration will be the most likely scenario in the coming years. Most Asian economies are fundamentally stronger than they were 18 years ago, with less external debt, larger reserves, and flexible currencies. In China, we believe that the yuan will continue to depreciate in a controlled fashion and that economic growth will grind lower over time. We anticipate that corporate earnings growth in Asia will be positive next year, a welcome change after several years of disappointing earnings growth.