Stocks recorded modest overall gains in the second quarter, but only after enduring significant volatility at the end of the period. Telecommunication services stocks recorded good gains, while media shares fared poorly and declined for the quarter.
The Media & Telecommunications Fund returned 3.67% in the quarter compared with 2.52% for the Lipper Telecommunication Funds Average. For the 12 months ended June 30, 2016, the fund returned 7.41% versus 4.29% for the Lipper Telecommunication Funds Average. The fund's average annual total returns were 7.41%, 13.69%, and 13.12% for the 1-, 5-, and 10-year periods, respectively, as of June 30, 2016. The fund's expense ratio was 0.79% as of its fiscal year ended December 31, 2015.
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.
Overall, we remain comfortable with how the portfolio is positioned. We are invested in a diverse range of companies that have strong underlying fundamentals with long runways for growth, firms that should perform well regardless of the macroeconomic environment. We think online advertising and e-commerce are still two of the most durable secular trends in any industry. Public cloud computing adoption also continues to strengthen, and we believe its spread will exceed expectations both near and long term. Conversely, we are underweight in legacy telecom companies with large, fixed-line telecom businesses. Investors have been drawn to the dividend yields offered by telecom incumbents in recent months, but we think their longer-term prospects are less promising.
We expect current concerns regarding global economic and political uncertainty will likely persist. The potential for headwinds, such as slowing economic growth and fallout from the UK's decision to exit the European Union and the upcoming U.S. presidential election, leads us to maintain a cautious near-term outlook. However, our focus on investing in solid, growing companies that can provide value in a range of economic scenarios leaves our positive longer-term outlook largely unchanged.