Developed Non-U.S. stocks posted solid returns overall in the second quarter, with European markets trailing those in the Asia-Pacific. Europe's best-performing countries included Norway, the UK, Belgium, Spain, and Finland, while Ireland and Greece fell sharply. In the Asia-Pacific region, Japan and Hong Kong posted strong gains, while Australia generated a modest positive return, and New Zealand posted a small loss. The Japanese economy continues to make strides toward recovery as Prime Minister Shinzo Abe's reforms proceed. While economic growth In Europe appears to be slowly improving, the European Central Bank (ECB) announced new stimulus measures in an attempt to revive growth and spark inflation.
The Spectrum International Fund returned 4.11% in the quarter compared with 5.25% for the MSCI All Country World Index ex USA and 3.35% for the Lipper International Multi-Cap Growth Funds Average. For the 12 months ended June 30, 2014, the fund returned 22.06% versus 22.27% for the MSCI All Country World Index ex USA and 20.25% for the Lipper International Multi-Cap Growth Funds Average. The fund's average annual total returns were 22.06%, 13.08%, and 8.28% for the 1-, 5-, and 10-year periods, respectively, as of June 30, 2014. The fund's expense ratio was 0.94% as of its fiscal year ended December 31, 2013.
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. Our underlying investment in the International Stock Fund, which invests primarily in non-U.S. growth companies, contributed the most performance, while the European Stock Fund contributed the least. We favor emerging markets over developed markets and have increased our overweight as valuations are at attractive levels versus developed markets. We continue to prefer value stocks as many non-U.S. economies are in earlier stages of economic expansion, which should be supportive for the asset class as growth and earnings improve.
We expect modest global growth over the coming months. Europe's economy continues to gradually improve as challenges in the eurozone periphery recede. Concerns remain, however, over the slow progress toward economic reforms by some member states, persistently elevated unemployment, and declining inflation. While Japan's fiscal and monetary policies have revived economic output and improved the inflation outlook, further progress will depend on the passage of structural reforms, increased real wages, and the economy's ability to weather the hike in the national sales tax that took effect this past April.