In the fourth quarter of 2015, global equity markets reclaimed some of the ground lost during the third quarter. The MSCI All Country World Index gained 5.15%. U.S. stocks rose over the period. The Federal Reserve raised short-term rates in mid-December, but this widely telegraphed move did not derail the broad equity market rally. Commodity prices weakened further in the quarter as did the strengthening of the U.S. dollar. Emerging markets equities rose but underperformed the developed market.
The Global Stock Fund returned 9.36% in the quarter compared with 5.15% for the MSCI All Country World Index and 5.58% for the Lipper Global Multi-Cap Growth Funds Average. For the 12 months ended December 31, 2015, the fund returned 7.09% versus −1.84% for the MSCI All Country World Index and 0.59% for the Lipper Global Multi-Cap Growth Funds Average. The fund's average annual total returns were 7.09%, 9.23%, and 5.63% for the 1-, 5-, and 10-year periods, respectively, as of December 31, 2015. The fund's expense ratio was 0.89% as of its fiscal year ended October 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 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.
During the period, we trimmed some of our best performers where growth had subsequently become priced in to their valuations. We added and initiated positions in stocks that demonstrated continued growth prospects and favorable valuations. The portfolio's sector weights shifted during the quarter, with moves out of consumer staples and consumer discretionary and into information technology and health care. Within the sector, we also added new positions in the semiconductor space, an area we think will benefit from a cyclical upswing in the near term. Our additions to health care, our third largest sector weight, were stock-specific during the quarter.
We believe that the U.S. and European economies are improving. Opportunities in Japan, where growth remains weak and valuations look somewhat expensive, are limited. Pockets within emerging markets offer great opportunity, we believe. But we are taking a cautious approach. We think China's consumer and technology sectors hold the greatest opportunities. Overall, we favor stocks that have exposure to normalizing and accelerating growth, increasing consumer demand and higher wage growth.