After stumbling in early April, U.S. stocks posted solid gains in the second quarter, lifting large-cap indexes to new all-time highs in June. Equities climbed amid signs that the economy was recovering from the weather-driven economic contraction in the first quarter. Corporate merger activity was supportive, and signs that Russia wants to de-escalate tensions with Ukraine, whose eastern region is experiencing violent separatism, were encouraging. Investors were undeterred by the Federal Reserve's continued tapering of its asset purchases or by rising oil prices late in the quarter in response to a sharp increase in sectarian violence in Iraq.
The Equity Index 500 Fund returned 5.15% in the quarter compared with 5.23% for the S&P 500 Index and 5.15% for the Lipper S&P 500 Funds Index. For the 12 months ended June 30, 2014, the fund returned 24.25% versus 24.61% for the S&P 500 Index and 24.26% for the Lipper S&P 500 Funds Index. The fund's average annual total returns were 24.25%, 18.51%, and 7.51% for the 1-, 5-, and 10-year periods, respectively, as of June 30, 2014. The fund's expense ratio was 0.28% as of its fiscal year ended December 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 Equity Index 500 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 seeks to provide broad exposure to large-cap U.S. stocks by replicating the structure and performance of the S&P 500 Index. All sectors of the index produced positive returns for the quarter. Energy stocks strongly outperformed, helped by an increase in global oil prices stemming from fears of Iraqi oil production disruptions. Utilities and information technology shares also did well. Materials, consumer staples, and health care stocks performed mostly in line with the broad market. Financials, telecommunication services, consumer discretionary, and industrials and business services stocks lagged with milder gains.
While we don't believe that investors can expect a repeat of last year's strong stock market performance, we do expect returns to benefit from corporate earnings growth, which we think will continue through the year at a moderate pace. Nevertheless, unitholders should note that we do not make investment decisions based on market forecasts or prospects for individual companies.