U.S. stocks advanced in the first quarter as the Federal Reserve signaled that a rate hike was not imminent. Mid-cap stocks outpaced large-cap stocks but trailed small-caps. Growth stocks outperformed value in the mid-cap universe, according to Russell indexes. Sector returns in the Russell Midcap Value Index were generally positive with some exceptions. The utilities sector fell the most as investors favored growth stocks, while energy stocks declined on continued oil price weakness. Health care was the strongest performing sector with double-digit gains, while consumer discretionary was also strong. U.S. economic growth slowed to a 2.2% annual rate in last year's final quarter from the third quarter's 5% pace, the government reported in March. The report also showed that U.S. corporate after-tax profits posted their largest quarterly drop since 2011 as the strong dollar and weak global demand hurt profitability for many companies.
The Mid-Cap Value Fund returned 2.88% in the quarter compared with 2.42% for the Russell Midcap Value Index, 2.77% for the Lipper Mid-Cap Value Funds Index, 1.25% for the Lipper Multi-Cap Value Funds Index. For the 12 months ended March 31, 2015, the fund returned 9.70% versus 11.70% for the Russell Midcap Value Index, 8.57% for the Lipper Mid-Cap Value Funds Index, 8.59% for the Lipper Multi-Cap Value Funds Index. The fund's average annual total returns were 9.70%, 13.34%, and 9.73% for the 1-, 5-, and 10-year periods, respectively, as of March 31, 2015. The fund's expense ratio was 0.80% as of its fiscal year ended December 31, 2013.
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The portfolio's sector allocations remained broadly unchanged over the quarter. Consumer staples represents the largest overweight sector versus the benchmark. Historically, we have found attractive valuations in the food products and food and staples retailing industries. The portfolio is also overweight in energy. Crude oil's plunge in 2014 has caused many investors to fixate on near-term oil price volatility rather than company fundamentals. We have purchased several high-quality businesses at attractive prices and remain focused on their long-term potential. Utilities and information technology remain the biggest underweight sectors. Within utilities, however, we favor independent power producers due to their attractive valuations and a trend of industry consolidation in recent years.
Increased buyout activity and a rising trend of shareholder activism have had a positive impact on several of the portfolio's holdings. Because we focus on identifying undervalued or underperforming assets, some holdings are bound to draw the attention of activist shareholders who seek to unlock value through a change in management practices. The stock market's rise for the past several years has made our task of finding companies trading below their intrinsic value more challenging. However, we remain focused on our investment approach and continue to seek underappreciated companies with a favorable risk and reward trade-off.