U.S. equities enjoyed strong gains in the third quarter of 2013 as continued monetary stimulus and signs of a global economic rebound outweighed concerns about slowing corporate profit growth. The Federal Reserve bolstered investor sentiment early in the quarter by quelling worries that it would soon increase short-term interest rates. Markets peaked in mid-September after the Fed unexpectedly delayed tapering its asset purchase program. Natural resources stocks also received a boost from signs that the eurozone recession had ended and that emerging market economies, particularly China, seemed to be regaining traction. Markets fell in the period's closing weeks, however, due to concerns about the underlying strength of the U.S. recovery and the potential impact from a looming budget stalemate in Washington. Oil prices rose largely due to events in the Middle East, including unplanned outages of Libyan production, unrest in Egypt, and potential U.S. intervention in Syria.
The New Era Fund returned 8.85% in the quarter compared with 5.24% for the S&P 500 Index and 10.58% for the Lipper Global Natural Resources Funds Index. For the 12 months ended September 30, 2013, the fund returned 9.75% versus 19.34% for the S&P 500 Index and 9.36% for the Lipper Global Natural Resources Funds Index. The fund's average annual total returns were 9.75%, 2.78%, and 11.15% for the 1-, 5-, and 10-year periods, respectively, as of September 30, 2013. The fund's expense ratio was 0.67% as of its fiscal year ended December 31, 2012.
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North American petroleum and exploration companies were among our strongest performers amid the ongoing U.S. economic recovery and continuing optimism about the prospects for shale oil production. A modest exposure to agricultural stocks weighed on our performance. In terms of positioning, we are focused on energy exploration and production companies that are moving down the cost curve and accelerating growth through the development of their assets, with North American shale producers as prime examples. We are also looking at commodity-related companies whose input costs are declining while product sales are increasing, including refining companies, utilities, and specialty chemicals. The significant increase in North American oil and gas supply needs to find a home in domestic and international markets. As a result, pipelines, railroads, even barges will be key beneficiaries of North American energy supply growth.
We believe that the recent rally in energy and commodity stocks is probably not sustainable over the longer term, and that we are in the initial years of a typical down cycle in commodities. The run up in oil prices since late June is due primarily to planned and unplanned supply interruptions, the specter of further unplanned interruptions, and some volatility added due to the uncertainty around Fed tapering. Over the long run, we suspect that oil prices will sustain a slow downward trend. The natural resources environment could remain challenging over the intermediate term, but with wide performance disparities between industries and companies. We are pleased to see such a prolific line of new investments, despite our view of a relatively challenging environment for broader commodities. We remain committed to our bottom-up stock selection process and our philosophy of buying and holding a diverse selection of fundamentally sound natural resources companies with solid balance sheets and talented management.