Non-U.S. equities in developed markets generally lagged U.S. shares. Eurozone markets fared best and performed mostly in line with large-cap U.S. shares, helped by improving economic growth and a European Central Bank rate cut in November. Also, stronger European currencies versus the greenback lifted returns to U.S. investors in dollar terms. Shares in Germany and several peripheral countries were among the region's top performers. Developed Asian markets were lackluster. Hong Kong and Japan led with relatively mild gains, while emerging markets equities were weak overall.
The Global Stock Fund returned 9.10% in the quarter compared with 7.42% for the MSCI All Country World Index and 8.04% for the Lipper Global Multi-Cap Growth Funds Average. For the 12 months ended December 31, 2013, the fund returned 32.55% versus 23.44% for the MSCI All Country World Index and 26.58% for the Lipper Global Multi-Cap Growth Funds Average. The fund's average annual total returns were 32.55%, 17.31%, and 7.86% for the 1-, 5-, and 10-year periods, respectively, as of December 31, 2013. The fund's expense ratio was 0.88% as of its fiscal year ended October 31, 2012.
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.
Stock selection is expected to be the primary source of our outperformance over time. Our strategy is to have bigger positions in our highest-conviction names, where the risk and potential reward are favorably balanced. We actively monitor regional and sector positions, but they are largely an outcome of our bottom-up stock decisions. Our stock holdings based on corporate fundamentals resulted in high allocations to information technology, financials, and industrials and business services companies. We have been less enamored of the intermediate-term prospects for telecommunication services, consumer staples, and materials firms. The areas that helped most during the quarter were computers and peripherals and Internet names, while those that detracted included commercial banks and capital market holdings.
We remain optimistic about the recovery in the U.S. economy and see it improving into 2014. The housing market is strong, the labor market has improved, and consumers are in the latter stages of deleveraging. We believe inflation will continue to be restrained, and capacity utilization also looks promising. We do not think the energy revival has been fully appreciated yet, and increasing supply could lead to lower costs for consumers. Europe is also improving, including the peripheral nations of Italy and Spain. The European recovery lags behind the U.S., but it is following a similar track. We are optimistic about some sectors of the Japanese economy, although we maintain a more cautious stance toward emerging markets.