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. Terrorism, tepid economic growth, and a smaller-than-expected monetary stimulus extension weighed on sentiment in Europe. Japanese stocks gained as the economy avoided a recession and showed signs of improvement in industrial output and retail sales. Emerging markets stocks rose, but the environment remained muted overall as commodities weakness, geopolitical turmoil, and slowing economic growth weighed on the asset class. Global industrials stocks reflected investor concerns about slowing global economic growth and declined for the period.
The Global Industrials Fund returned 5.89% in the quarter compared with 7.01% for the MSCI ACWI Index Industrials + Automobiles & Auto Components. For the 12 months ended December 31, 2015, the fund returned −1.37% versus −2.06% for the MSCI ACWI Index Industrials + Automobiles & Auto Components. The fund's 1-year and Since Inception (10/24/2013) average annual total returns were −1.37% and 0.55%, respectively, as of December 31, 2015. The fund's expense ratio was 2.53% as of its fiscal year ended December 31, 2014.
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Our building products stocks generated the fund's largest absolute gains during the period due in large part to the relatively healthy commercial and residential construction markets in the U.S. Our automobile, aerospace and defense, and electrical equipment stocks also rose strongly. Transportation infrastructure, airlines, and industrial machinery stocks posted the largest declines amid concerns about slowing global economic growth. Information technology, building products, and industrial machinery are our largest overweights versus the portfolio's benchmark. Automobiles, road and rail, and aerospace and defense are our largest underweights.
There are some clear positives and negatives affecting the global industrials space. On the plus side, central bank policies in Europe and Japan are accommodative, corporate balance sheets are generally strong, and low energy prices help consumers and countries that are net importers of oil. On the minus side, low prices for energy and other commodities represent a clear headwind as they weigh on capital expenditures, which impact revenues for many industrials companies. The likelihood of less accommodative monetary policy in the U.S. in the coming months poses an additional headwind. The challenging environment highlights the importance of company-specific fundamentals, using our in-depth proprietary research to find companies with sustainable competitive advantages that are getting stronger relative to their peers.