Greater certainty over monetary policy underpinned strong performance among non-U.S. developed markets in the quarter. The U.S. Federal Reserve decided to taper its asset purchases beginning January 2014, while Europe's central bank cut its key lending rate in November. European stocks generated strong gains, benefiting from moderating austerity measures, progress on structural reforms in some countries, and an end to the Continent's recession. Performance across developed Asia was poor, though Japan eked out a small return in U.S. dollar terms as it continued edging toward recovery. Conditions in emerging economies were mixed, with many opting for tighter monetary policies to defend their currencies and contain inflation. Stocks in emerging Asian markets advanced, while emerging Europe and Latin American equities declined.
The Spectrum International Fund returned 5.97% in the quarter compared with 4.81% for the MSCI All Country World Index ex USA and 6.09% for the Lipper International Multi-Cap Growth Funds Average. For the 12 months ended December 31, 2013, the fund returned 18.17% versus 15.78% for the MSCI All Country World Index ex USA and 19.47% for the Lipper International Multi-Cap Growth Funds Average. The fund's average annual total returns were 18.17%, 15.45%, and 8.03% for the 1-, 5-, and 10-year periods, respectively, as of December 31, 2013. The fund's expense ratio was 0.96% as of its fiscal year ended December 31, 2012.
For up-to-date standardized total returns, including the most recent month-end performance, please click on the Performance tab, above.
Current performance may be lower or higher than the quoted past performance, which cannot guarantee future results.
Share price, principal value, and return will vary and you may have a gain or loss when you sell your shares.
The Spectrum International Fund charges a 2%
redemption fee on shares held 90 days or less.
The performance information shown does not reflect the deduction of the redemption fee;
if it did, the performance would be lower.
The Spectrum International Fund invests for long-term capital appreciation primarily in mid- to larger size companies across both developed and emerging markets. The European Stock Fund, which invests primarily in developed countries, contributed the most to absolute returns, while the New Asia and Latin American funds were the largest detractors. We favor emerging markets over developed markets, although we trimmed our overweight to emerging market equities in light of slowing growth and the potential for Fed tapering to weigh on emerging markets currencies. We are modestly overweight to value stocks. Although challenged by the muted economic growth environment, value stocks outside the U.S. are supported by attractive valuations and the prospects for improvement as systemic risks abate.
Our expectations for global growth remain modest. The U.S. economic recovery continues, supported by accommodative monetary policy. While the eurozone has emerged from recession, economic headwinds continue, and Japan's government will continue to face challenges as it attempts to undertake reforms to bolster the country's economy. Emerging markets economies face slower growth than in recent years and remain vulnerable to potential rising U.S. rates.