U.S. large-cap stocks advanced in the first quarter as the Federal Reserve signaled that a rate hike was not imminent. The S&P 500 Index rose to a record in late February following assurances from Fed Chair Janet Yellen that policymakers were in no rush to raise interest rates, but pared much of those gains and ended the quarter modestly higher. Value stocks declined while growth stocks rose in the large-cap universe, according to Russell indexes. U.S. economic growth slowed to a 2.2% annual rate in the fourth quarter of 2014 from the prior quarter's 5% pace, the government reported in March. The report also showed U.S. corporate after-tax profits fell in last year's fourth quarter in the largest quarterly drop since 2011 as the strong dollar and weak global demand hurt profitability for many companies.
The Value Fund returned 0.89% in the quarter compared with 0.95% for the S&P 500 Index and −0.07% for the Lipper Large-Cap Value Funds Index. For the 12 months ended March 31, 2015, the fund returned 10.36% versus 12.73% for the S&P 500 Index and 8.43% for the Lipper Large-Cap Value Funds Index. The fund's average annual total returns were 10.36%, 14.96%, and 8.60% for the 1-, 5-, and 10-year periods, respectively, as of March 31, 2015. The fund's expense ratio was 0.84% as of its fiscal year ended December 31, 2013.
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Sector allocations stayed largely unchanged from the previous quarter. Financials and health care represented the largest overweight sectors as of March 31, 2015. Financials stocks have rebounded from the 2008 global financial crisis, but we believe that valuations of select companies still appear reasonable on a normalized earnings basis and that the sector provides good leverage to the improving economy. In health care, the portfolio's largest exposure is to the pharmaceuticals industry, where companies generate strong cash flow and offer attractive dividend yields. We were net sellers in the health care sector on strength and added to industrials and business services stocks. Information technology and consumer discretionary, respectively, remain the largest underweight sectors.
Our near-term outlook is cautious given that we have not experienced a meaningful stock market correction in some time. The magnitude of the market's climb in recent years has been surprising given widespread expectations of higher U.S. interest rates sometime in 2015. We would not be surprised to see more subdued stock market returns coupled with higher volatility, which has hovered at below-average levels in recent years. Valuations in the large-cap universe remain elevated, making it difficult to find attractive investment opportunities. Still, we continue to find select companies that are priced below their intrinsic value with relatively limited downside risk. We remain focused on our strategy of seeking quality companies at attractive prices and maintaining a longer-term horizon to allow the market to recognize the value of our holdings.