The U.S. equity market continued its upward trend during the fourth quarter as investors were encouraged by U.S. dollar strength, more certainty in Federal Reserve policy, and the potential for higher consumer spending due to falling gasoline prices and low interest rates. There was cause for concern as the conflict between Russia and Ukraine persisted, and weak economic data from Europe and Japan dampened global growth prospects. The Fed's bond-buying program ended in October, and many investors believe that actual monetary tightening won't occur until the second half of 2015. Interest rates have remained low, making the equity market attractive relative to other asset classes.
The Equity Income Fund returned 3.02% in the quarter compared with 4.93% for the S&P 500 Index and 3.89% for the Lipper Equity Income Funds Index. For the 12 months ended December 31, 2014, the fund returned 7.49% versus 13.69% for the S&P 500 Index and 10.69% for the Lipper Equity Income Funds Index. The fund's average annual total returns were 7.49%, 13.33%, and 6.83% for the 1-, 5-, and 10-year periods, respectively, as of December 31, 2014. The fund's expense ratio was 0.67% as of its fiscal year ended December 31, 2013. Continue Reading »