Global technology stocks offered modest returns in the first quarter, although gains were clustered in hardware and services firms, with Internet-related firms generally faring poorly. More economic concerns in China and a renewed drop in commodity prices raised questions about global growth early in the quarter and sent stocks sharply lower, although they recovered some ground in late February and March. Generally, an aversion to risk caused high-multiple stocks to underperform, while investors favored lower-multiple stocks despite little evidence of improved fundamentals.
The Global Technology Fund returned −4.20% in the quarter compared with 1.60% for the MSCI All Country World Index Information Technology and −2.47% for the Lipper Global Science / Technology Funds Index. For the 12 months ended March 31, 2016, the fund returned 11.36% versus 2.40% for the MSCI All Country World Index Information Technology and 1.50% for the Lipper Global Science / Technology Funds Index. The fund's average annual total returns were 11.36%, 16.45%, and 13.24% for the 1-, 5-, and 10-year periods, respectively, as of March 31, 2016. The fund's expense ratio was 0.91% as of its fiscal year ended December 31, 2015.
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Our focus on the fastest-growing and leading global technology companies was not in favor in the period, as risk-averse investors turned toward cheaper and slower-growing firms. The portfolio's cloud-based software holdings provided the biggest boost to returns in the period, although performance in the group varied widely. E-Commerce, software services, and media holdings performed worst.
Despite a rocky start, we remain optimistic that 2016 will prove to be a good year for the portfolio and the overall market. Over the short term, however, our hesitancy to invest in value-oriented technology incumbents with plenty of cash but scarce future prospects could remain a headwind to relative performance. Late in 2015, we observed that fundamentals remained strong for most leading companies. At the same time, order books for Chinese component manufacturers and other signals suggested that trends were bottoming in many of the more troubled segments of the global technology market. For the most part, little has changed in 2016, and fundamentals have even strengthened for some leading companies. We remain convinced that a focus on the companies that are likely to dominate industries-or even groups of industries-in the future is the best way to build on the portfolio's solid, long-term track record.