Positive returns for international markets were fueled to some extent by the favorable impact of extremely accommodative monetary policy on the part of global central banks. However, foreign equities underperformed U.S. stocks as measured by the 10.61% return of the S&P 500® Index. This shortfall was primarily the result of news from Cyprus, where turmoil in the banking sector fueled fears that Europes debt crisis was set to return to the headlines. Currency translation also played a part, as weakness in the euro, the Japanese yen and the British pound relative to the U.S. dollar hurt returns for U.S. holders of international stocks.
The top-performing countries in the MSCI EAFE® Index were Greece and Ireland, with returns of 14.02% and 12.61%, respectively. The worst country-level performance came from Italy, Spain and Austria, which returned -9.77%, -5.58% and -4.67%, respectively. From a sector standpoint, the best performance came from health care, which returned 12.00%, and consumer staples, which returned 11.11%. Even amid a positive environment characterized by healthy risk appetite, investors continued to gravitate toward stocks with reliable earnings and above-average dividends. The worst-performing sectors were materials, energy and utilities, which returned -4.83%, -1.74% and -1.06%, respectively.
If you're a moderate risk investor seeking competitive long-term investment returns through a broadly diversified portfolio, this Fund may be appropriate for you. It offers a high degree of relative predictability in an uncertain stock market by seeking investment results, before expenses, approximating the aggregate price and dividend performance of the securities included in the MSCI EAFE Index.
- Passively managed, the Fund seeks to duplicate the investment composition and overall performance of the stocks included in the MSCI EAFE® Index.
- The MSCI EAFE® Index consists of 21 developed countries, primarily in Europe and Asia.
- Use proprietary quantitative techniques designed to minimize trading costs.