Equities in the final three months of the year were driven higher by better-than-expected corporate earnings, strong sector performance in all but energy-related stocks, and easing of monetary policy around most of the world. However, amid a slowdown in China's economic growth and subsequent fears of a global recession, equity markets sold-off in the first six weeks of 2016, and investors sought out safer-haven opportunities. Weakness in financial, commodity, and energy stocks punished both emerging and developed market equities.
The Global Growth Stock Fund returned −0.59% in the quarter compared with 0.38% for the MSCI All Country World Index and −2.18% for the Lipper Global Multi-Cap Growth Funds Average. For the 12 months ended March 31, 2016, the fund returned −4.25% versus −3.81% for the MSCI All Country World Index and −5.38% for the Lipper Global Multi-Cap Growth Funds Average. The fund's average annual total returns were −4.25%, 6.45%, and 15.81% for the 1-, 5-, and Since Inception (10/27/2008) periods, respectively, as of March 31, 2016. The fund's expense ratio was 1.15% as of its fiscal year ended October 31, 2015.
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 Global Growth Stock 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.
While the portfolio has an overweight allocation to emerging markets, there is little to no exposure to markets tied to energy and commodities in order to focus on faster-growing, demographically driven economies with a rising middle class, low debt, and an increasing cap that represents almost one-quarter of total net assets. We are underweight the U.S., where valuations tend to be higher than in other regions, and Japan, where we think that poor corporate governance and slowness in implementing structural reforms will restrain returns. Although our overarching philosophy is to be sector-neutral versus the benchmark, our bottom-up fundamental analysis of stocks can result in some overweights or underweights.
Overall, we remain constructive on global equities, especially relative to other asset classes, and we believe we are in an environment that should be fertile for stock picking, with fundamentals becoming more dispersed across regions, countries, sectors.