Large-capitalization growth stocks posted solid first-quarter gains. In general, growth stocks outperformed value shares across all market capitalizations, but large-caps trailed the returns of small- and mid-cap stocks. From a sector perspective, health care and consumer discretionary generated outsized returns within the broad-based S&P 500 Index, while utilities, energy, and financials declined. Growth in the U.S. economy slowed sharply in the first quarter, though harsh winter weather appears to have played a substantial role. Currency translation stemming from the strong U.S. dollar is pressuring revenues and earnings of multinational corporations by both reducing the attractiveness of U.S. exports and weighing on capital expenditures by internationally focused U.S. firms.
The Growth Stock Fund returned 6.04% in the quarter compared with 3.84% for the Russell 1000 Growth Index and 3.44% for the Lipper Large-Cap Growth Funds Index. For the 12 months ended March 31, 2015, the fund returned 16.85% versus 16.09% for the Russell 1000 Growth Index and 14.26% for the Lipper Large-Cap Growth Funds Index. The fund's average annual total returns were 16.85%, 16.23%, and 9.92% for the 1-, 5-, and 10-year periods, respectively, as of March 31, 2015. The fund's expense ratio was 0.69% as of its fiscal year ended December 31, 2013.
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The portfolio invests in companies that we believe can generate above-average earnings and cash flow growth. We employ a bottom-up stock selection strategy and focus on companies that can grow organically and don't depend on economic expansion to perform well. The information technology, consumer discretionary, and health care sectors remained the portfolio's largest allocations (and significant overweights versus the S&P 500 Index), accounting for about three-quarters of assets. Stock selection in each of these sectors generated strong contributions to absolute and relative performance. Compared with the benchmark, the portfolio has significant underweight allocations to financials, energy, and consumer staples stocks. The telecommunication services sector was the only detractor from relative performance.
We remain optimistic about the environment for growth stocks, barring an exogenous negative event. In our view, U.S. market returns will be driven predominately by earnings growth and, to a much lesser extent, by expansion of valuation multiples. Growth in Europe, Japan, and several of the larger emerging markets, such as China and Brazil, has lagged the U.S. We expect the strengthening U.S. dollar and weaker end markets abroad to continue to weigh on the earnings of many multinational corporations. Given this backdrop, we are focused on investing in what we call all-season growth companies, which are those with the ability to grow earnings regardless of macroeconomic conditions.