The International Equity Index Fund returned 11.52% during the third quarter. The Funds benchmark, the MSCI EAFE® Index, returned 11.56% and outperformed the U.S. market, which returned 5.24% as measured by the S&P 500® Index. This marks a significant reversal from the international markets underperformance in the first half of the year. Currency translation helped the Indexs performance, as the rising value of foreign currencies relative to the dollar augmented stock market returns.
The top-performing countries were Greece, which returned 33.63%, and Finland, which returned 26.59%. The worst country performers were Israel and Singapore, but the two markets nonetheless gained 2.19% and 4.65%, respectively. From a sector standpoint, the best performance came from telecommunications services and materials, which returned 17.68% and 14.87%, respectively, while the bottom-performing sectors were health care, which returned 5.88%, and consumer staples, which returned 6.72%.
The performance of international stocks received a substantial boost from the strength in European equities, which staged a strong rally on increasing evidence of green shoots of growth in the region. Peripheral European countries delivered positive performance, reflecting growing optimism regarding the European recovery. Greece staged a strong rally, due in part to its economic recovery plan and an improvement in its unemployment rate, and Spain gained ground mainly as a result of its structural reforms and large cuts in public spending. Japanese stocks also finished the quarter in positive territory, but they lagged the broader Index as the market paused to digest substantial second-quarter gains there.
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.