U.S. stocks posted decent gains in a volatile first quarter. Shares fell in January as the Federal Reserve began to taper its asset purchases but rebounded in February amid favorable U.S. economic data and good corporate earnings. Equities fell in March due to geopolitical tensions in Ukraine and signs of a slowdown in China. Non-U.S. developed markets stocks registered more modest overall gains, with Europe generating the biggest gains and Japan declining after stellar returns in 2013. Emerging markets equities declined slightly on concerns about slowing global growth, geopolitical risks, and less accommodative U.S. monetary policy. Global industrials stocks managed a slight overall gain but underperformed the broader market.
The Global Industrials Fund returned 0.10% in the quarter compared with the next generation. The Since Inception (10/24/2013) total return was 4.10% as of March 31, 2014. The fund's expense ratio was 1.24% as estimated on the fund's inception date, October 24, 2013.
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Our airline holdings generated the portfolio's largest gains, followed by commercial services and supplies stocks and the electronic equipment and instruments industry. Road and rail, software, and automobiles were our weakest performers. Current areas of focus include component suppliers, commercial aerospace, and industrial technology designed to improve productivity. From a geographic perspective, North America accounted for 55% of our portfolio at the end of the period and is the fund's largest overweight versus its benchmark due to the region's relatively strong growth prospects. Europe is our next-largest regional allocation, followed by Japan and smaller positions in the Pacific ex-Japan and Latin America.
We expect modest global economic growth over the next few quarters. The U.S. recovery is supported by improved housing and labor markets, muted energy prices, and diminished fiscal headwinds. Economic data suggest that Europe's shallow economic recovery will continue, helped by the gradual easing of austerity measures, supportive monetary policy, and positive impacts from the U.S. recovery. Japan's stimulative policies have breathed life into the economy, but sustainability will depend on more challenging structural reforms. Emerging markets remain vulnerable to rising U.S. interest rates, with nations highly dependent on external funding most at risk. We continue to find opportunities in companies that research, manufacture, and distribute industrial products, services, and equipment, looking for those that enjoy strong competitive advantages and good earnings growth operating in attractive industries.