Most of the major U.S. stock indexes recorded modest gains in the quarter and reached new or multiyear highs as investors balanced favorable corporate earnings against economic and geopolitical concerns. Some information technology stocks saw sharp declines late in the period, however, as investors shunned fast-growing companies with elevated valuations. Equities in developed non-U.S. markets recorded slight gains and lagged U.S. shares. Emerging markets equities fell slightly against a backdrop of slowing growth in various economies and geopolitical tensions related to Ukraine. Telecommunication services stocks performed exceptionally well among global technology shares in the quarter, followed by electronic components makers. IT stocks lagged.
The Global Technology Fund returned 6.36% in the quarter compared with 2.19% for the MSCI All Country World Index Information Technology and 0.85% for the Lipper Global Science / Technology Funds Index. For the 12 months ended March 31, 2014, the fund returned 42.89% versus 24.41% for the MSCI All Country World Index Information Technology and 29.55% for the Lipper Global Science / Technology Funds Index. The fund's average annual total returns were 42.89%, 29.18%, and 12.31% for the 1-, 5-, and 10-year periods, respectively, as of March 31, 2014. The fund's expense ratio was 0.97% as of its fiscal year ended December 31, 2012. Investors should note that the fund's short-term performance is highly unusual and unlikely to be sustained.
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We hold a large overweight in semiconductors and continue to believe many semiconductor companies are well positioned to benefit from global adoption of smartphones and tablets. Growing electronic penetration and the proliferation of semis in industrial products and other areas outside of traditional tech should be another driver for the sector.
We do not expect the level of choppiness we have seen in the market in recent weeks to continue in the coming months, but we also do not expect previously frothy areas such as software as a service to regain favor over the near term. We continue to focus on identifying attractive, durable companies through rigorous fundamental research. In particular, we believe it is likely that semiconductor capital equipment names will be the beneficiaries of a ramp-up in spending by foundry, logic, and memory companies