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 Equity Index 500 Fund returned 6.96% in the quarter compared with 7.04% for the S&P 500 Index and 6.92% for the Lipper S&P 500 Funds Index. For the 12 months ended December 31, 2015, the fund returned 1.11% versus 1.38% for the S&P 500 Index and 1.07% for the Lipper S&P 500 Funds Index. The fund's average annual total returns were 1.11%, 12.27%, and 7.04% for the 1-, 5-, and 10-year periods, respectively, as of December 31, 2015. The fund's expense ratio was 0.27% as of its fiscal year ended December 31, 2014.
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 Standard & Poor's 500 Index. All of the 10 sectors in the index posted positive returns for the quarter, with materials, health care, and information technology recording the largest gains. The energy sector was the weakest performer as benchmark U.S. oil prices fell to multiyear lows below $35 per barrel, and utilities stocks also significantly underperformed.
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 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.