Non-U.S. stocks endured a tumultuous quarter and finished the period little changed from the end of 2013. Developed markets generated mixed results in March, following seesaw returns in January (lower) and February (higher). European markets performed best, led by Denmark, Ireland, and Italy, as eurozone economies, especially those in the periphery, continued to emerge from recession. Developed Asian markets were hurt by moderate losses in Japan and Hong Kong amid slowing economic growth in China. Emerging markets equities fell slightly amid slowing growth in various economies and geopolitical tensions related to Ukraine.
The Spectrum International Fund returned 1.02% in the quarter compared with 0.61% for the MSCI All Country World Index ex USA and −0.16% for the Lipper International Multi-Cap Growth Funds Average. For the 12 months ended March 31, 2014, the fund returned 15.68% versus 12.80% for the MSCI All Country World Index ex USA and 14.82% for the Lipper International Multi-Cap Growth Funds Average. The fund's average annual total returns were 15.68%, 18.42%, and 7.62% for the 1-, 5-, and 10-year periods, respectively, as of March 31, 2014. The fund's expense ratio was 0.96% as of its fiscal year ended December 31, 2012.
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-to-larger size companies across both developed and emerging markets. The underlying Africa & Middle East portfolio, which invests primarily in developing countries contributed the most to absolute returns, while the Japan and Emerging Market Europe portfolios were the largest detractors. We favor emerging markets as valuations are at attractive levels versus developed markets, and we have increased our overweight to value stocks outside the U.S. Many non-U.S. economies are in the earlier stages of economic expansion, which should be supportive for value stocks as economic activity and earnings improve.
We believe Europe's anemic economic recovery will continue as austerity gradually eases and the U.S. recovers. Although we are optimistic about Japan's longer-term prospects, we are looking for signs that its policymakers will address key structural reforms. Emerging markets face slower growth amid a fading commodity supercycle and much slower growth in China. Over the longer term, we believe that the secular growth drivers for the emerging market asset class remain in place.