Stocks recorded solid gains in the final quarter of the year, helping reverse the previous quarter's slide and pushing large-cap benchmarks back into positive territory for 2015 on a total return (including dividends) basis. Most of the rebound occurred in the first month of the quarter. Stocks became volatile in the closing weeks of the year as terrorist attacks, geopolitical instability, and uncertainty over monetary policies periodically took tolls on sentiment. Information technology stocks outperformed the broader market for both the quarter and the year.
The Science & Technology Fund returned 13.75% in the quarter compared with 7.04% for the S&P 500 Index and 8.84% for the Lipper Science & Technology Funds Index. For the 12 months ended December 31, 2015, the fund returned 8.61% versus 1.38% for the S&P 500 Index and 4.78% for the Lipper Science & Technology Funds Index. The fund's average annual total returns were 8.61%, 12.26%, and 9.34% for the 1-, 5-, and 10-year periods, respectively, as of December 31, 2015. The fund's expense ratio was 0.84% as of its fiscal year ended December 31, 2014.
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.
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 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 allocated predominantly to the infrastructure and applications software industries.
We continue to see the Internet as an important source of value creation and recognize the growing influence of cloud computing in the enterprise technology world, and we have substantial positions in firms that appear likely to enjoy durable growth.