Concerns of US monetary tightening, weakening global growth, and the Greek debt crisis pressured global equity markets in the month of June. All but one developed market, Ireland, delivered negative returns in the period. Other top performing markets in the developed world included Belgium, Israel, Singapore, and Japan. The biggest laggards in our investable universe included New Zealand, Australia, South Korea, Switzerland, and Norway. The best performing sectors in the MSCI World Index ("Index") were telecommunication services, consumer discretionary, health care, financials, and consumer staples. The worst performing sectors in the Index were utilities, materials, information technology, energy, and industrials. Every major currency except the Canadian dollar appreciated versus the US dollar during the period, thus improving overall returns on overseas assets for US dollar-based investors.
The Fund modestly underperformed the Index during the month. Fund holdings in the software & services, automobiles & components, and capital goods industry groups, along with an overweight position in the technology hardware & equipment industry group and an underweight position in the retailing industry group, detracted from relative performance versus the Index in June. Fund holdings in the consumer durables & apparel, consumer services, and pharmaceuticals & biotechnology industry groups, as well as an overweight position in the telecommunication services industry group and an underweight position in the semiconductors & semi equipment industry group, offset some of this relative underperformance. The largest single detractor from performance was digital wireless communications equipment manufacturer, QUALCOMM, Inc. (QCOM, Financial) (United States). Other notable detractors included automaker, Hyundai Motor Co., Ltd. (XKRK:005389, Financial) (South Korea), enterprise management software provider, Oracle Corp. (ORCL, Financial) (United States), energy management firm, Schneider Electric SE (France), and software giant, Microsoft Corp. (United States). The largest individual positive contributor to return was apparel designer & manufacturer, PVH Corp. (United States). Additional top contributors during the period included pharmaceutical giant, Eli Lilly & Co. (United States), telecommunication services provider, KDDI Corp. (Japan), cruise ship operator, Carnival Corp. (United States), and life insurer, Prudential Financial, Inc. (United States).
The market commentary expresses the portfolio managers’ views as of the date of this report and should not be relied on as research or investment advice regarding any stock. These views and the Fund holdings and characteristics are subject to change. There is no guarantee that any forecasts made will come to pass. Any securities identified and described in this report do not represent all of the securities purchased, sold or recommended for client accounts. The reader should not assume that an investment in the securities identified was or will be profitable. Diversification does not protect against market loss.
