Developed non-U.S. stock markets advanced as concerns about the eurozone debt crisis ebbed despite the latest flare-up in Cyprus. Developed Asian markets fared best, led by Japan, where a new government has promised a more aggressive approach to monetary policy. Eurozone markets were mixed in dollar terms, as inconclusive election results in Italy and a bank crisis in Cyprus weighed on the euro and certain stock markets. Emerging markets stocks declined as investors favored developed markets, where the growth outlook has lately improved in contrast to slowing growth in China, Brazil, and other key markets. Weak commodity prices and currencies across the developing world also weighed on emerging markets stocks. However, stocks in several smaller emerging countries fared very well, such as the Philippines and Turkey, both of which benefited from sovereign credit rating upgrades.
The Spectrum International Fund returned 3.20% in the quarter compared with 3.27% for the MSCI All Country World Index ex USA and 3.85% for the Lipper International Multi-Cap Growth Funds Average. For the 12 months ended March 31, 2013, the fund returned 8.66% versus 8.87% for the MSCI All Country World Index ex USA and 8.78% for the Lipper International Multi-Cap Growth Funds Average. The fund's average annual total returns were 8.66%, 1.20%, and 11.05% for the 1-, 5-, and 10-year periods, respectively, as of March 31, 2013. The fund's expense ratio was 0.96% as of its fiscal year ended December 31, 2011.
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 International Growth & Income Fund, which invests in non-U.S. value stocks, contributed the most to absolute returns, while the Emerging Markets Stock Fund contributed the least. Our current strategy favors emerging over developed markets. Many emerging economies face lighter debt and fiscal problems than developed economies and are expected to enjoy higher growth rates over the long term. Recent indicators show emerging markets growth is stabilizing after slowing during much of 2012. However, weak global growth may challenge the more export-driven economies, while rising inflation may constrain accommodative monetary policies in many emerging markets.
Our global growth expectations remain modest for the next several quarters. The housing recovery, moderate job growth, and an uptick in personal income growth are supporting gradual improvement in the U.S. economy, but the ongoing fiscal policy debate and its effect on growth remains uncertain. Much of Europe continues to struggle with austerity and recession. The Cyprus bank rescue highlights the continuing challenges in the eurozone debt crisis and the market's susceptibility to them. On the positive side, U.S. corporate balance sheets and profit margins remain healthy, and earnings and revenue growth are consistent with modest economic growth. China's economic growth has slowed from higher levels, but signs of improving data have materialized. We believe the uneven global outlook and other near-term risks reinforce the value of the fund's broadly diversified investment approach.