The Fund posted a total return of 11.76% for the quarter, compared with 10.51% for the Fund's benchmark, the S&P 500® Index. The change in market leadership benefited the Fund's performance, aided primarily by stock selection in the industrials and energy sectors. Stock selection within the consumer discretionary sector detracted from performance.
Market volatility likely will continue into the first quarter, driven by macroeconomic data, Fed statements and earnings data. Investors remain concerned about further economic cooling in the larger emerging market nations, particularly China, along with the impact of higher taxes in 2014 and the implementation of Obamacare. Nevertheless, expectations for sustained growth in the real estate market and continued improvements in the unemployment rate, along with a positive outlook on corporate earnings, outweigh those concerns.
We believe the outlook for risk-taking will continue to improve, as better economic data are released. We believe the Fund is well-positioned as investors move beyond the broad economic data and refocus their attention on company fundamentals.
If you're seeking a low cost, disciplined approach to investing in equities, this fund may be appropriate for you. It seeks long term growth of capital and dividend income and invests primarily in a broadly diversified portfolio of established, large-cap companies. The Fund is intended for use as a core equity investment.
- Use a multi-factor proprietary quantitative stock selection model with the goal of providing additional total return versus the S&P 500® Index.
- Create a portfolio with risk, style, capitalization and characteristics similar to the S&P 500® Index while potentially providing excess returns by overweighting or underweighting stocks that have the potential to achieve the Fund's objective.
- Sell securities when they are no longer attractive based upon evaluation criteria, such as valuation, price momentum and earnings quality.