U.S. stocks generated strong gains in the quarter as the economy strengthened and investors welcomed the Federal Reserve's announcement that it would begin tapering its asset purchase program in January 2014, which removed an element of uncertainty from markets. European stocks also rose, benefiting from a central bank rate cut, reduced emphasis on austerity measures, and signs of a nascent economic recovery. Japanese stocks performed well for the year amid aggressive economic stimulus measures, but gains were modest in the quarter. Emerging markets' performance was mixed as Asian markets generally advanced and Latin American shares declined. Natural resources stocks posted decent overall gains but lagged broader equity markets against a backdrop of modest global economic growth.
The New Era Fund returned 5.43% in the quarter compared with 10.51% for the S&P 500 Index and 3.27% for the Lipper Global Natural Resources Funds Index. For the 12 months ended December 31, 2013, the fund returned 15.72% versus 32.39% for the S&P 500 Index and 13.02% for the Lipper Global Natural Resources Funds Index. The fund's average annual total returns were 15.72%, 13.04%, and 9.85% for the 1-, 5-, and 10-year periods, respectively, as of December 31, 2013. The fund's expense ratio was 0.67% as of its fiscal year ended December 31, 2012.
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North American petroleum and exploration companies were among our strongest performers amid the ongoing U.S. economic recovery and continuing optimism about the prospects for shale oil production. A modest exposure to agricultural stocks weighed on our performance. In terms of positioning, we are focused on energy exploration and production companies with decreasing costs and accelerating growth through the development of their assets, with North American shale producers as prime examples. We are also looking at commodity-related companies whose input costs are declining while product sales are increasing, including refining companies, utilities, and specialty chemicals. The significant increase in North American oil and gas supply needs to find a home in domestic and international markets. As a result, pipelines, railroads, and even barges will be key beneficiaries of North American energy supply growth.
We believe that we are in the initial years of a typical down cycle in commodities and that the midterm outlook remains challenging, with wide dispersion between industries and companies. Over the long term, we suspect that oil prices will sustain a slow downward trend as North American supplies come online over the next few years. Although commodity prices may no longer be rising, we are heartened by the fact that we are seeing such a large number of new investment opportunities. Our expansive global research platform continues to assist in identifying companies that can provide long-term capital appreciation for our clients. Even if the near-term environment presents challenges, we believe the market will reward our disciplined and consistent approach to investing over the long term.