Stocks recorded solid gains in the final quarter of the year, helping reverse the previous quarter's slide and pushing large-cap benchmarks back into positive territory for 2015 on a total return (including dividends) basis. Most of the rebound occurred in the first month of the quarter, and stocks became volatile in the closing weeks of the year as terrorist attacks, geopolitical instability, and uncertainty over monetary policies periodically took tolls on sentiment. Mid-caps trailed large-caps, while growth stocks outperformed their value counterparts. Among major segments of the mid-cap growth universe, consumer staples and health care stocks performed best, while consumer discretionary shares declined a bit.
The Mid-Cap Growth Fund returned 5.16% in the quarter compared with 4.12% for the Russell Midcap Growth Index and 3.40% for the Lipper Mid-Cap Growth Funds Index. For the 12 months ended December 31, 2015, the fund returned 6.56% versus −0.20% for the Russell Midcap Growth Index and −0.96% for the Lipper Mid-Cap Growth Funds Index. The fund's average annual total returns were 6.56%, 13.19%, and 10.12% for the 1-, 5-, and 10-year periods, respectively, as of December 31, 2015. The fund's expense ratio was 0.77% as of its fiscal year ended December 31, 2014.
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.
While the full ramifications of the plunge in oil and other commodity prices have yet to be seen, the drop has caused most energy stocks to be priced for a full-blown economic recession and many industrial shares to be priced for at least a substantial slowdown. While we share the general apprehension toward the energy sector, we have begun making selective investments in broken-down industrial stocks that offer good long-term value and may fare better than expected if the economy remains on track. We are focusing on less-cyclical industrial names and increasing our exposure to steadier-growth business services companies.
Investors have recently begun to turn some of their attention away from highflying biotechnology, social media, Internet, and consumer stocks and toward the slower but more reliable growers; the companies that have long been our focus. "Growth at any price" has been challenged a bit in 2015, suggesting that more valuation sensitivity is likely in 2016. Generally, we are keeping a close eye on whether a stronger U.S. consumer, whose fortunes are boosted by lower gasoline and heating costs, will be able to compensate for continued weakness in commodity prices and commodity-producing emerging markets.