U.S. stocks gained in the quarter, but volatility was high amid overseas terrorist attacks, geopolitical instability, and uncertainty over monetary policies in the U.S. and abroad. Terror attacks, as well as concerns about tepid economic growth and smaller-than-expected monetary stimulus measures, weighed on sentiment in Europe. Japanese stocks gained for the quarter as the economy narrowly avoided another recession and showed signs of improvement in industrial output and retail sales. Emerging markets stocks rose, but the environment for emerging markets remained muted overall as commodities weakness, geopolitical turmoil, and slowing economic growth weighed on the asset class.
The Spectrum Growth Fund returned 5.90% in the quarter compared with 6.27% for the Russell 3000 Index and 4.90% for the Lipper Multi-Cap Core Funds Index. For the 12 months ended December 31, 2015, the fund returned 0.75% versus 0.48% for the Russell 3000 Index and −1.47% for the Lipper Multi-Cap Core Funds Index. The fund's average annual total returns were 0.75%, 9.27%, and 6.61% for the 1-, 5-, and 10-year periods, respectively, as of December 31, 2015. The fund's expense ratio was 0.78% as of its fiscal year ended December 31, 2014.
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The fund's exposure to diversifying sectors generally detracted from performance, with the inclusion of non-U.S. equities and real assets equities weighing on results for the period. Stock selection in several of our domestic equity portfolios was beneficial, particularly among growth stocks across a range of market capitalizations and large-cap value shares. Underweight allocations to real assets stocks and U.S. small-cap stocks versus the benchmark helped to offset some of the weakness in these segments.
The U.S. economy grew at a 2.0% annualized rate in the third quarter, supported by resilient consumer spending. Weaker global growth and a stronger dollar are likely to weigh on business inventory spending and exports, but expansionary fiscal spending should support growth in 2016. European economic growth is modest, supported by accommodative monetary policies, low energy prices, and reduced fiscal headwinds. Japan's economy narrowly avoided a recession last year, but growth remains uneven and somewhat fragile. There is considerable disparity among emerging markets. Many commodity exporters will continue to feel the pain of weak oil and materials prices, while net commodity consumers should be in better shape.