Global technology stocks suffered a sharp pullback in the third quarter as investors worried about the slowing Chinese economy and the prospect of higher interest rates in the U.S. Hardware and semiconductor stocks performed worst among the major categories in our investment universe, while information services shares were the sole segment to manage a gain.
The Global Technology Fund returned −3.15% in the quarter compared with −6.52% for the MSCI All Country World Index Information Technology and −8.24% for the Lipper Global Science / Technology Funds Index. For the 12 months ended September 30, 2015, the fund returned 8.54% versus −0.77% for the MSCI All Country World Index Information Technology and 0.36% for the Lipper Global Science / Technology Funds Index. The fund's average annual total returns were 8.54%, 19.49%, and 13.00% for the 1-, 5-, and 10-year periods, respectively, as of September 30, 2015. The fund's expense ratio was 0.91% as of its fiscal year ended December 31, 2014.
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Although semiconductor stocks were hit hard in the quarter, we continue to believe that some semiconductor firms are well positioned over the longer term to benefit from increasing uses in industrials and the global adoption of mobile devices. Select companies within the semiconductor capital equipment industry should also reap the rewards from industry consolidation and chipmakers' need to reduce their size while improving processing capabilities. More recently, valuations within the semiconductor industry have become more reasonable, driven largely by fears about the Chinese economy. We have since seized the opportunity to expand our holdings in the industry given our expectation for improved conditions in the Chinese economy.
As 2015 began, we suspected that a moderating global growth environment would provide a narrowing set of opportunities for technology investors, and this has largely been proven the case. Companies with unique advantages have continued to prosper-particularly those adept at using technology to wrest market share away from traditional competitors in industries as diverse as retailing, Internet, software, and manufacturing. At the same time, more cyclically oriented technology firms have fared poorly. This has been particularly true for semiconductor firms, which have suffered from slowing demand from manufacturers in China and elsewhere. Several recent data points suggest to us that China is beginning to emerge from its inventory correction phase, however, and we have increased our semiconductor investments in response. Pullbacks in the valuations of some leading companies have also provided us what we believe are attractive entry points to open new positions or, in some cases, rebuild previous ones. More broadly, we have become somewhat more sanguine in our outlook for the global economy, although we are aware that investing in leading firms does not come cheaply and that future pullbacks are possible for even the best companies.