U.S. equities rebounded from third-quarter losses as corporate earnings were better than initially expected. U.S. economic and employment growth were solid despite tepid or slowing expansion in other parts of the world. The Federal Reserve began to raise short-term interest rates in mid-December, but this widely expected move did not derail the broad equity market. Global energy and materials stocks were flat to down during the quarter and significantly underperformed the broader equites market. Energy and materials stocks posted deep losses as prices for oil and other commodities were broadly pressured by a continued oversupply in the global market, as well as expectations for softer global demand, particularly from China.
The New Era Fund returned 1.58% in the quarter compared with 7.04% for the S&P 500 Index and 0.42% for the Lipper Global Natural Resources Funds Index. For the 12 months ended December 31, 2015, the fund returned −18.76% versus 1.38% for the S&P 500 Index and −22.21% for the Lipper Global Natural Resources Funds Index. The fund's average annual total returns were −18.76%, −5.21%, and 1.26% for the 1-, 5-, and 10-year periods, respectively, as of December 31, 2015. The fund's expense ratio was 0.65% as of its fiscal year ended December 31, 2014.
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The investment opportunity set has narrowed somewhat as balance sheets in the already hard-hit energy and materials sector continue to feel the pressure of a long-term downturn in global commodities prices. With that said, we continue to see compelling investment opportunities. Areas of interest include energy exploration and production companies that are lowering their cost of production and accelerating growth through the development of their assets. North American shale producers are the best example. We are also looking at commodity-related companies whose input costs are declining while product sales are increasing due to the health of their end markets. These include specialty chemicals and packaging, among others.
We continue to believe the natural resources market is in the initial years of a secular down cycle for oil and other commodities. Within this challenging environment, however, we expect to see wide dispersion among industries and companies and are mindful that cyclical dislocations could boost select commodity prices. We maintain the structural integrity of our portfolio in the context of our longer-term down cycle view, while being mindful of short-term trading rallies, and will make tactical portfolio shifts as appropriate. We currently have a focus on companies with lower financial leverage and no hidden counterparty risk, given the presence of wide credit spreads and bankruptcy potential in the commodities marketplace.