U.S. equities rose in the first quarter of 2013, lifting several major indexes to multiyear, if not all-time, highs. Share prices advanced as the economy continued to expand, the labor market improved somewhat, and the Federal Reserve persisted with its asset purchase plans to suppress interest rates and stimulate growth. Merger activity also raised investor sentiment, although sentiment was tempered by concerns that the European debt crisis would flare up again. Cyprus temporarily closed its banks to prevent a run on deposits but finally agreed to a controversial bailout plan from the European Union and the International Monetary Fund involving losses to some depositors.
The U.S. Large-Cap Core Fund returned 9.02% in the quarter compared with 10.61% for the S&P 500 Index and 10.54% for the Lipper Large-Cap Core Funds Index. For the 12 months ended March 31, 2013, the fund returned 13.96% versus 13.96% for the S&P 500 Index and 14.00% for the Lipper Large-Cap Core Funds Index. The fund's 1-year and Since Inception (06/26/2009) average annual total returns were 13.96% and 16.41%, respectively, as of March 31, 2013. The fund's expense ratio was 1.53% as of its fiscal year ended December 31, 2011.
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.
Our top-performing stocks during the period included pharmaceutical, biotechnology, aerospace and defense, life sciences, and diversified communications companies. On a negative note, real estate; chemicals; software; computers and peripherals; and hotels, restaurant, and leisure shares were among our biggest losers. Our weighting in the health care and consumer staples sectors contributed positively to fund performance, while stock selection in information technology was the major detractor. Health care stocks made up our largest sector weighting at the end of the period, followed by information technology and financials.
Considering the strong run in stocks during the past few months, we would not be surprised to see a short-term correction. That said, the positives outweigh the negatives in our view. The U.S. economy should continue to expand at a moderate pace with contained inflation, propelled by housing and growing strength in the labor market. The U.S. is in a good position relative to other developed markets. The industrials and business services sector is performing better, and Congress and the Obama administration appear less contentious than at the end of last year. The Federal Reserve is likely to keep its stimulus programs in place a while longer. Eurozone risks remain with us, but they could decline in the months ahead. Price/earnings multiples look attractive, and any expansion in multiples would add a boost to stock market performance.