Developed non-U.S. equity markets narrowly lagged most U.S. shares in the second quarter, while emerging markets outperformed. Among developed Asian markets, Hong Kong performed best. Japanese stocks did well in dollar terms, even though the economy struggled in the wake of an April 1 sales tax increase. In Europe, low inflation prompted the European Central Bank to reduce interest rates and establish a program offering inexpensive four-year loans to banks. Stocks in Spain and Belgium were strong, while shares in Greece and Ireland fell sharply. Outside of the eurozone, Norway and the UK were top performers.
The Global Stock Fund returned 4.02% in the quarter compared with 5.23% for the MSCI All Country World Index and 3.63% for the Lipper Global Multi-Cap Growth Funds Average. For the 12 months ended June 30, 2014, the fund returned 30.82% versus 23.58% for the MSCI All Country World Index and 22.54% for the Lipper Global Multi-Cap Growth Funds Average. The fund's average annual total returns were 30.82%, 14.77%, and 8.16% for the 1-, 5-, and 10-year periods, respectively, as of June 30, 2014. The fund's expense ratio was 0.91% as of its fiscal year ended October 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 Global Stock Fund charges a 2%
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.
Our holdings in the health care, consumer discretionary, and information technology sectors weighed on fund performance during the quarter, as many of our earlier winners suffered in the period. Strong stock selection in materials and telecommunication services, however, were beneficial. At the end of June, we were overweight in consumer discretionary and industrials and business services and underweight in energy. Our sector weights are primarily the result of bottom-up stock selection. Our regional weightings helped performance slightly, thanks to our exposure to emerging markets.
The leading indicators continue to point to a slowly improving economic picture, especially in Europe. Overall, investor sentiment is generally optimistic, which is somewhat reflected in rising European stock prices. Higher prices, coupled with sluggish but improving earnings, lead us to be somewhat cautious in the near term. However, over the long term, we believe that performance will be determined by how well individual companies execute their plans. Many European companies should benefit from reducing costs and improving their market positions over time. While we remain optimistic about Japan's intermediate-term prospects, we would be more positive if policymakers would actively implement structural reforms to labor markets, tax and regulatory regimens, and social spending. Valuations in many emerging markets appear attractive.