Developed non-U.S. generally outperformed U.S. shares despite a stronger dollar versus several major currencies. Asian markets outperformed their European peers, with Japanese shares rising more than 10% and reaching a 15-year high as Japanese public pension funds stepped up their equity purchases. European markets did very well in local currency terms, but a sharp drop in the euro versus the dollar resulted in milder returns in dollar terms. Emerging markets equities underperformed shares in developed non-U.S. markets, as weaker emerging markets currencies reduced returns in dollar terms.
The Spectrum International Fund returned 4.95% in the quarter compared with 3.59% for the MSCI All Country World Index ex USA and 4.69% for the Lipper International Multi-Cap Growth Funds Average. For the 12 months ended March 31, 2015, the fund returned 0.71% versus −0.57% for the MSCI All Country World Index ex USA and −0.17% for the Lipper International Multi-Cap Growth Funds Average. The fund's average annual total returns were 0.71%, 7.00%, and 6.57% for the 1-, 5-, and 10-year periods, respectively, as of March 31, 2015. The fund's expense ratio was 0.94% as of its fiscal year ended December 31, 2013.
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.
The Spectrum International Fund charges a 2%
redemption fee on shares held 90 days or less.
The performance information shown does not reflect the deduction of the redemption fee;
if it did, the performance would be lower.
The Spectrum International Fund invests for long-term capital appreciation primarily in mid- and large-cap companies across both developed and emerging markets. The fund's outperformance was led by developed non-U.S. equity holdings, with the Japan Fund performing best as actions by central banks, lower energy costs, and a strong dollar supported developed market growth. Emerging markets equity holdings generated smaller gains as performance was uneven, with our Latin American equities holdings falling roughly 6.8% despite outperforming their style-specific benchmark.
In our view, non-U.S. equities values remain modestly attractively relative to U.S. equities, which are at or above historical averages. Non-U.S. economies and companies are expected to benefit from their relatively weaker currencies and support from aggressive monetary policies. We favor emerging markets stocks over developed markets equities. However, the potential for slowing emerging markets economic growth and increased volatility remain near-term risks as China moves toward a consumer-focused economy, sanction-fueled economic woes in Russia continue, and the U.S. Federal Reserve moves toward interest rate normalization. We remain overweight to non-U.S. value versus growth stocks based on valuations as well as prospects for improved earnings.