The S&P 500 Stock Index gained modestly in the second quarter, as relief over resilient corporate earnings growth and enthusiasm about a reaccelerating U.S. economy was partially offset by worries over the ongoing Greek debt crisis. The blue chip benchmark set all-time highs in the period but closed lower after a sharp sell-off amid Greece's financial crisis. For most of the period, merger activity and a strengthening economy supported the stock market as did signs that the strong dollar and lower oil prices would not hurt corporate earnings as much as initially feared.
The Equity Index 500 Fund returned 0.21% in the quarter compared with 0.28% for the S&P 500 Index and 0.22% for the Lipper S&P 500 Funds Index. For the 12 months ended June 30, 2015, the fund returned 7.17% versus 7.42% for the S&P 500 Index and 7.12% for the Lipper S&P 500 Funds Index. The fund's average annual total returns were 7.17%, 17.03%, and 7.63% for the 1-, 5-, and 10-year periods, respectively, as of June 30, 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 S&P 500 Stock Index. The sector performance of the index was mixed with health care stocks leading gains, lifted by strength in biotechnology shares and merger activity. Consumer discretionary, financials, and telecommunication services also outperformed the broad market. Energy, consumer staples, and industrials and business services shares declined. Utilities stocks, which often behave like bonds because of their relatively high dividend yields, extended their first-quarter losses as long-term interest rates increased in response to a strengthening economy and the likelihood of a Fed rate hike later this year.
The outlook for U.S. equities remains generally positive. However, after a six-year bull market run during which the S&P 500 rose more than 200% without a major reversal, we think investors may have grown too complacent about volatility. Nevertheless, shareholders should note that we do not make investment decisions based on market forecasts or prospects for individual companies.