U.S. stocks were narrowly mixed in the second quarter. Major indices reached all-time highs in May or June but closed below their best levels of the quarter following a sharp sell-off at the end of June. For most of the period, the market was supported by merger activity, a strengthening economy, and signs that the stronger dollar and lower oil prices did not hurt first-quarter corporate earnings as much as initially feared. As the quarter ended, global markets reacted negatively to events in Greece, including a one-week closure of its stock market and banks, the implementation of capital controls to stem ATM withdrawals, a missed payment to the International Monetary Fund, and the expiration of its bailout agreement.
The Science & Technology Fund returned 1.14% in the quarter compared with 0.28% for the S&P 500 Index and 0.45% for the Lipper Science & Technology Funds Index. For the 12 months ended June 30, 2015, the fund returned 9.65% versus 7.42% for the S&P 500 Index and 9.84% for the Lipper Science & Technology Funds Index. The fund's average annual total returns were 9.65%, 17.60%, and 9.53% for the 1-, 5-, and 10-year periods, respectively, as of June 30, 2015. The fund's expense ratio was 0.84% as of its fiscal year ended December 31, 2014.
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Current performance may be lower or higher than the quoted past performance, which cannot guarantee future results.
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We hold a large overweight in the media sector, where our holdings are concentrated in the Internet industry. We like market-leading companies that benefit from the massive secular shift to online advertising. The software sector is also a large allocation for the portfolio. Companies within this sector generally offer better and more durable businesses than many other areas of the technology industry. Our holdings are predominantly allocated to the infrastructure and applications software industries. We have limited exposure to telecommunication services.
We continue to observe the Internet as a source of value creation, and cloud computing continues to be a growing influence in the enterprise technology world. We are finding opportunities in the hardware industry and continue to focus on firms with attractive prospects. We remain dedicated to applying rigorous analysis and fundamental research to achieve in-depth knowledge of companies and the industry and uncover attractive stocks.