Most major U.S. stock indexes rose in the second quarter as the market was able to hang onto gains from April and May despite a challenging period in June when the United Kingdom voted to exit the European Union (Brexit). Value stocks outperformed growth stocks across all market capitalizations in the second quarter. Small- and mid-cap stocks outperformed their large-cap counterparts.
The Growth Stock Fund - I Class returned −0.65% in the quarter compared with 2.46% for the S&P 500 Index and 0.61% for the Russell 1000 Growth Index. For the 12 months ended June 30, 2016, the fund returned −2.61% versus 3.99% for the S&P 500 Index and 3.02% for the Russell 1000 Growth Index. The fund's average annual total returns were −2.61%, 12.07%, and 8.44% for the 1-, 5-, and 10-year periods, respectively, as of June 30, 2016. The fund's expense ratio was 0.52% as of the fiscal year-end reported in the most recent Prospectus.
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.
Information technology represents our largest sector allocation, and we believe our Internet software and service holdings have strong longer-term potential. We like health care, but we have reduced our exposure to biotechnology-focused companies partly due to a string of disappointing product launches. We continue to avoid the energy sector as we believe too much oil supply will continue to drive prices lower.
U.S. equity markets are likely to continue muddling through amid heightened uncertainty and accompanying volatility. However, we think operating profits could turn positive sometime in the latter half of the year. We are cautious given the uncertainties surround Brexit and the ongoing U.S. presidential election process. With market expectations coming down, we could have a favorable setup for stocks as we approach year-end.