From a sector perspective, performance was unanimously in positive territory as all sectors within the Russell 3000® Index advanced during the quarter. Seven of nine sectors posted double-digit gains with the best performance coming from the more defensive health care and consumer staples sectors. The weakest performing sectors were the more cyclical technology and materials & processing sectors which still posted solid single-digit gains during the quarter.
Companies with lower quality and lower beta characteristics generally outperformed during the quarter. In terms of equity market capitalization, small-cap companies outperformed their large-cap counterparts as the Russell 2000® Index posted a first-quarter return of 12.39%, while the Russell 1000® Index advanced 10.96%. Style differentiation was evident in the quarter as value-oriented stocks generally outpaced growth-oriented stocks. In the large capitalization segment, the Russell 1000® Value Index and Russell 1000® Growth Index had quarterly returns of 12.31% and 9.54%, respectively.
International equity markets also advanced but not to the same extent as U.S. equities. The MSCI-EAFE Index (Net), a measure of international developed country returns, posted a positive return of 5.13%, bringing the one-year trailing return to 11.26%. Emerging markets underperformed developed markets during the quarter as the MSCI Emerging Markets Index (Net) posted a quarterly return of -1.62%, bringing the one-year trailing performance to 1.96%.
Most regions within the MSCI® All Country World ex-U.S. Index (representing both developed and emerging international markets) ended the quarter in positive territory. The best performing markets were predominantly in Europe and included countries such as Switzerland, Ireland and Greece. Some of the worst performing markets were in the Africa/Mideast region and included countries such as Egypt and South Africa. Japan generated a double-digit gain for the quarter, while the U.K. was positive but finished behind the overall market.
From a sector perspective, seven of ten sectors posted positive results during the period. Health care and consumer staples comfortably outperformed all other sectors, while materials, energy and utilities were the only negative performing sectors.
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