Stocks in Asia ex-Japan rose in the final quarter of 2015 as large gains in October outweighed losses in November and December. Global stock markets rallied in October after China's central bank unexpectedly loosened monetary policy to boost the economy. Despite the quarterly gain, the environment for Asian stocks was bearish as commodities weakness, China's slowing growth, and the strong dollar weighed on the asset class. Countries that lagged the most in earlier months led gainers. Indonesian stocks rose the most, surging nearly 21%, while Chinese A shares added about 15% after plunging roughly 33% the previous quarter. Indian stocks declined. In December, India's government slashed its growth forecast for the fiscal year ending in March 2016 due to weak global demand. However, the country is still on track to be Asia's fastest-growing major economy in 2015.
The New Asia Fund returned 6.04% in the quarter compared with 3.87% for the MSCI All Country Asia ex Japan Index and 4.37% for the Lipper Pacific Ex Japan Funds Average. For the 12 months ended December 31, 2015, the fund returned −5.09% versus −8.90% for the MSCI All Country Asia ex Japan Index and −6.61% for the Lipper Pacific Ex Japan Funds Average. The fund's average annual total returns were −5.09%, 1.87%, and 8.99% for the 1-, 5-, and 10-year periods, respectively, as of December 31, 2015. The fund's expense ratio was 0.94% as of its fiscal year ended October 31, 2014.
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if it did, the performance would be lower.
China, Hong Kong, and India represented the fund's largest absolute country positions at year-end. Our holdings in China are concentrated in businesses exposed to domestic consumption, particularly select Internet and consumer staples names. Hong Kong and India accounted for the largest overweight markets relative to the benchmark. On the other hand, South Korea and Taiwan remained significant underweight markets due to a lack of attractive growth opportunities. We had no exposure to Malaysia. Sector allocations reflect our preference for areas driven by domestic consumption. Information technology and consumer discretionary were the largest overweight sectors at the end of the quarter, while telecommunication services was the largest underweight.
Despite the disappointing stock market and economic performance across Asia in 2015, we see several reasons to be hopeful for a turnaround in the coming years. Valuations in Asia have fallen to attractive levels on an absolute and relative basis compared with the U.S. and other developed markets. Lower commodity prices have been a windfall for energy importers and should boost companies that benefit from lower raw materials costs. Reform urgency is rising in India and Indonesia, whose governments are slowly making changes long sought by investors. Our outlook for China is more guarded, yet we are finding companies there that are still growing as the economy cools. While China's deceleration will continue to weigh on the region, we are still finding attractively valued businesses in Asia that are adjusting to lower topline growth, taking market share, showing innovation, and generating value for shareholders.