Global equity markets were volatile in the first quarter but managed to end with slight gains. Profit-taking from last year's strong run, as well as the Federal Reserve's decision to taper its asset purchases, shook markets early in the year, but investors regained their optimism in February. In March, geopolitical tensions surrounding Russia's annexation of Crimea, and anxiety about an economic slowdown in China, weighed on global sentiment. March saw the best-performing stocks of 2013 pulling back in favor of stocks with less challenging valuations. In the U.S., most of the major indexes recorded modest gains as investors balanced favorable corporate earnings against economic and geopolitical concerns.
The Global Stock Fund returned 1.78% in the quarter compared with 1.21% for the MSCI All Country World Index and 0.36% for the Lipper Global Multi-Cap Growth Funds Average. For the 12 months ended March 31, 2014, the fund returned 26.21% versus 17.17% for the MSCI All Country World Index and 18.98% for the Lipper Global Multi-Cap Growth Funds Average. The fund's average annual total returns were 26.21%, 18.80%, and 7.79% for the 1-, 5-, and 10-year periods, respectively, as of March 31, 2014. The fund's expense ratio was 0.91% as of its fiscal year ended October 31, 2013.
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 Stock 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.
We trimmed some of our biggest winners in 2013 in favor of stocks that had struggled but have favorable outlooks, in our view. Deleveraging cycles are ending in the U.S., but there are notable signs of progress in Europe, which creates the potential for high incremental returns. Valuations are more challenging in the U.S., but we see several tailwinds for growth, which aided our performance during the quarter. We significantly increased our exposure to emerging markets, reflecting our optimism about stronger growth in Mexico, the United Arab Emirates, and other areas where we see strong fundamentals and attractive valuations. Our sector weights are primarily the result of bottom-up stock selection, which has resulted in a heavy allocation to technology, where our holdings are hybrids of technology and media companies.
February's rebound strengthens our view that investor sentiment has become positive, while March's rotation into lower-quality stocks is an indication that investors are becoming more confident about investing in broader regions of the globe. This is not surprising given the stage of recovery we have reached. Our focus is on constructing a high-conviction portfolio that will meet the challenges ahead. Given our robust research platform, we believe we can find unique growth companies before their potential for substantial prosperity becomes obvious to other investors.