U.S. equities overcame U.S. fiscal uncertainty and eurozone instability and rose strongly in the first quarter, with several major indexes hitting multiyear highs. Stocks advanced as the economic recovery continued to grind ahead, buoyed by accommodative monetary policies and improvements in the housing and employment markets. Equities in non-U.S. developed markets trailed U.S. shares but still posted solid gains. Emerging markets stocks trailed developed markets amid concerns about weaker growth, lower commodity prices, and higher inflation. Within the UBS World Infrastructure & Utilities Index, Japan and North America posted strong gains. Emerging markets rose modestly, while developed Europe declined. Road and rail, gas utilities, and diversified telecommunication services were among the top-performing industries, while construction and engineering stocks were among the weakest.
The Global Infrastructure Fund returned 6.88% in the quarter compared with 6.73% for the UBS World Infrastructure & Utilities Index and 1.89% for the Lipper Specialty/Miscellaneous Funds Average. For the 12 months ended March 31, 2013, the fund returned 12.62% versus 9.89% for the UBS World Infrastructure & Utilities Index and 4.09% for the Lipper Specialty/Miscellaneous Funds Average. The fund's 1-year and Since Inception (01/27/2010) average annual total returns were 12.62% and 7.05%, respectively, as of March 31, 2013. The fund's expense ratio was 1.81% as of its fiscal year ended October 31, 2012.
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 Global Infrastructure 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.
Benchmark Definitions
Our utilities and energy stocks boosted results. Our electric utilities exposure was particularly positive versus the portfolio's benchmark, benefiting from good security selection and a substantial underweight. Industrials and business services shares posted good gains but trailed the benchmark. From a regional perspective, our relative lack of exposure to developed Europe helped results, while an underweight in the strong North American region weighed on performance. We took advantage of recent strength to reduce positions in some stocks that are more exposed to the global economic recovery. We continue to have a large overweight in emerging markets, where China and India remain our largest allocations and our largest overweights. In Europe, we increased our exposure to some high-quality infrastructure stocks after near-term weakness resulted in attractive valuations.
Our global growth expectations remain modest over the next several quarters. Gradual improvement in U.S. economic activity is supported by the housing recovery, modest job growth, and an uptick in personal income growth, yet also is challenged by fiscal uncertainty. The Federal Reserve's pledge to continue its accommodative policy provides further support but also highlights concerns about its overall effectiveness and an eventual exit strategy. We are encouraged by signs of structural improvement and supportive policies in Europe. Although the macroeconomic environment remains challenging, valuations remain below historical averages despite recent strength. Japan's markets received a boost from new policies targeting higher inflation and higher growth, while growth in emerging markets appears to be stabilizing following moderation in 2012. Over the long term, our asset class should benefit as emerging markets expand their infrastructure and utilities and developed countries make up for decades of underfunding.
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