Health care stocks continued to outperform the broad market as represented by the S&P 500 Index in the second quarter, building on gains from the past several years. Within the health care sector, the largest industry groups posted the best gains. The biotechnology, pharmaceuticals, and services segments, which represent more than four-fifths of the Lipper Health and Biotechnology benchmark, posted strong second- quarter gains. The products and devices and life sciences industry groups that make up the balance of the benchmark recorded modest losses.
The Health Sciences Fund returned 5.50% in the quarter compared with 0.28% for the S&P 500 Index and 4.02% for the Lipper Health/Biotechnology Funds Index. For the 12 months ended June 30, 2015, the fund returned 43.42% versus 7.42% for the S&P 500 Index and 37.31% for the Lipper Health/Biotechnology Funds Index. The fund's average annual total returns were 43.42%, 33.79%, and 19.31% for the 1-, 5-, and 10-year periods, respectively, as of June 30, 2015. The fund's expense ratio was 0.77% as of its fiscal year ended December 31, 2014. Investors should note that the fund's short-term performance is highly unusual and unlikely to be sustained.
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The portfolio's biotechnology holdings, which account for a bit less than one-third of assets, generated solid absolute and relative performance and outperformed the biotech segment in the Lipper benchmark due to strong stock selection. However, our underweight allocation to biotechnology stocks detracted from relative returns. We remain focused on biotech companies that develop medicines that prevent disease, relieve symptoms, and provide cures. Our pharmaceuticals and services holdings, which together make up about half of the portfolio's assets, generated strong absolute results. We have added to our overweight allocation in the services segment because we like the prospects for managed care companies that can benefit from an extended period of low health care utilization. There were no meaningful detractors from relative performance on a sector basis, although our products and devices holdings detracted from absolute returns.
Health care stocks have generated strong long-term performance that has surpassed our expectations. Therefore, we believe that health care will perform more in line with the broad market going forward. However, if the market experiences a downswing, we think health care can continue to outperform given the defensive nature of many companies in the sector. The health care universe is diverse and dynamic, and we believe that it represents one of the most attractive growth areas in the global economy. The development of new drugs and therapies to address major medical needs should continue to help support growth in the sector.