Global technology stocks recorded modest losses in the second quarter, as optimism over earnings and U.S. economic growth gave way to concerns about financial instability elsewhere, particularly in Greece and China. Global software shares fared best in the period, while information services stocks suffered the biggest pullback. U.S. dollar strength, which had been a significant factor in returns over the last several quarters, moderated in the past three months. An appreciating U.S. dollar detracts from the returns for dollar-based investors who own nondollar-denominated securities and weighs on the earnings of U.S. exporters.
The Global Technology Fund returned 3.98% in the quarter compared with −0.79% for the MSCI All Country World Index Information Technology and 2.49% for the Lipper Global Science / Technology Funds Index. For the 12 months ended June 30, 2015, the fund returned 15.32% versus 8.66% for the MSCI All Country World Index Information Technology and 10.38% for the Lipper Global Science / Technology Funds Index. The fund's average annual total returns were 15.32%, 23.86%, and 14.18% for the 1-, 5-, and 10-year periods, respectively, as of June 30, 2015. The fund's expense ratio was 0.91% as of its fiscal year ended December 31, 2014.
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The central focus of our approach is on companies that are using technology either to exploit new markets, such as social networking, or to seize market share in established industries. We are significantly underweight in the hardware sector, which is subject to more cyclical risk than several other areas of technology. Conversely, we are significantly overweight in media, where many companies are benefiting from the increased global penetration of Internet connectivity and adoption of online services. Market-leading firms continue to benefit from the increased global demand for data, content, and e-commerce.
We expect the coming quarter to be much like the previous one, a period of meandering markets that offers only select opportunities for global technology investors. As recent earnings have demonstrated, we have entered a low-return environment in which fundamentals are not accelerating for most firms. For this reason, we continue to focus on the limited number of companies that are either capturing lucrative market share from slower-footed firms, as with software-as-a-service providers in the U.S., or are exploiting increasingly rare fast-growing markets, as with the e-commerce/Internet industry in China. On a relative performance basis, the short-term risk to our approach is that a market meltdown and subsequent flight to safety will cause a rush toward large, cash-rich incumbents in the tech sector, firms to which we have only minimal exposure. Nevertheless, we continue to believe that the best and most risk-aware way to seek superior long-term performance is by investing in companies with superior long-term prospects.