Large-cap U.S. stocks generated strong gains in the fourth quarter of 2014 as the market found support in steady U.S. economic growth and renewed stimulus efforts in the eurozone and Japan. However, natural resources stocks fell sharply in the period as the prices paid for many global commodities plummeted. A combination of increased supply, ample production capacity, a stronger U.S. dollar, and tepid demand growth contributed to a particularly steep decline in oil prices. Forest products and specialty chemicals, which benefited from reduced input costs as a result of lower commodity prices, were among the few bright spots in the natural resources universe.
The New Era Fund returned −12.93% in the quarter compared with 4.93% for the S&P 500 Index and −15.44% for the Lipper Global Natural Resources Funds Index. For the 12 months ended December 31, 2014, the fund returned −7.83% versus 13.69% for the S&P 500 Index and −14.80% for the Lipper Global Natural Resources Funds Index. The fund's average annual total returns were −7.83%, 2.64%, and 6.13% for the 1-, 5-, and 10-year periods, respectively, as of December 31, 2014. The fund's expense ratio was 0.66% as of its fiscal year ended December 31, 2013.
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Electric and multi-utilities, paper and forest products, and specialty chemicals turned in good absolute gains and were among the portfolio's best-performing industries. Stocks in companies exposed to oil prices struggled, including our U.S. oil exploration and production firms. We have significant overweight exposure to specialty chemical stocks, which should benefit from lower input costs. Despite their recent weakness, we also like U.S. shale oil exploration and production companies and are looking for low-cost producers with good balance sheets that are likely to emerge from the current environment in a stronger competitive position.
The medium term is likely to remain challenging for natural resources stocks as it is likely that a stronger U.S. dollar, a sluggish global economy, and production overcapacity for many commodities will continue to weigh on global commodities pricing. Short-term volatility, such as that arising from heightened geopolitical turmoil, could give commodity and energy prices a boost and offer new investment opportunities. There are also a number of attractive long-term opportunities even in such a challenging environment. We will continue to rely on our independent global research platform to identify and evaluate such opportunities for our clients.