U.S. large-cap stocks advanced in the first three months of 2016 as gains in the quarter's second half outweighed earlier losses. U.S. stocks followed global markets lower in the first six weeks of the year as investors reacted to poor manufacturing data out of China and a renewed decline in crude oil prices, which touched a 13-year low in February. Starting in mid-February, stocks recovered as oil prices climbed on reports that oil-producing countries might agree to freeze or even cut output. Sentiment improved after the Federal Reserve left short-term interest rates unchanged at its March policy meeting and signaled a slower-than-expected pace of rate increases this year. Eight of 10 sectors in the S&P 500 advanced. The health care and financials sectors each fell more than 5%. Value stocks outperformed growth stocks across all market capitalizations.
The Value Fund returned 0.58% in the quarter compared with 1.35% for the S&P 500 Index and 0.84% for the Lipper Large-Cap Value Funds Index. For the 12 months ended March 31, 2016, the fund returned −2.05% versus 1.78% for the S&P 500 Index and −2.78% for the Lipper Large-Cap Value Funds Index. The fund's average annual total returns were −2.05%, 10.98%, and 7.00% for the 1-, 5-, and 10-year periods, respectively, as of March 31, 2016. The fund's expense ratio was 0.81% as of its fiscal year ended December 31, 2015.
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Health care was the fund's largest overweight sector as of quarter-end. Our health care holdings are concentrated in the pharmaceuticals and health care providers and services industries. The fund has a large overweight in utilities, which features many companies that deliver stable cash flows and higher dividend yields with relatively little downside risk. Financials remain a significant allocation. Financials stocks have rebounded from the 2008 global financial crisis, but we think that valuations of select companies still appear reasonable on a normalized earnings basis and that the sector provides good leverage to the improving U.S. economy. Information technology remains the largest underweight sector, followed by consumer discretionary.
The S&P 500 Index ended the first quarter up 1.35% including dividends, extending the current U.S. bull market into its eighth year. The advance has pushed valuations to levels that appear stretched, in our view, making it harder to find quality investments trading at attractive valuations. China's ability to manage its slowdown remains a concern for the global economy. Meanwhile, tepid wage growth and recession-like conditions in the energy sector are among the headwinds weighing on U.S. growth. We anticipate muted returns for the economy and stock market and have positioned the fund more defensively with overweight allocations to health care, consumer staples, and utilities. Despite relatively expensive valuations in the large-cap universe, we continue to find high-quality, attractively valued companies that we believe are agnostic to wider market swings. We remain focused on buying quality companies at attractive prices and maintaining a long-term horizon to give our holdings time to become fully valued.