- Making Green from Gold, Palladium and Pollution
- March 7, 2014
By Frank Holmes
CEO and Chief Investment Officer
U.S. Global Investors
Gold’s Bull Days Are Back?
Gold is coming back with a vengeance, experiencing a clear recovery and grabbing the attention of market cynics. Analysts from Noruma Securities even upgraded its outlook for gold, expecting bullion to climb over the next three years, according to Barron’s.
Nomura analysts attribute their increased gold forecast to real interest rates that “don’t seem to be heading anywhere at the moment.” In addition, there appears to be “long-term demand support from Asian nominal income growth, an evolving post-QE macroeconomic environment and lower disinvestment potential.”
Gold is also gleaming a little brighter in Japan, as its central bank announced that monetary policies will remain very accommodative. With a weakening yen, gold will likely be seen as a store of value for Japanese investors.
Palladium Near Its Highest Level in Almost a Year
Two global events colluded this week that dramatically affected the palladium and platinum market. The situation in Ukraine and Russia along with six-week-long strikes in South Africa began raising concerns that these palladium-rich countries may not be able to continue supplying the commodity at normal levels.
Currently South Africa supplies around 37 percent of the world’s palladium; Russia supplies close to 40 percent of the world’s palladium.
What does this all mean for the palladium and its sister platinum? It seems that fear surrounding the international political landscape is helping to push the precious metals prices higher and higher.
You can see the effect the political landscape is having on palladium. Over the past year, the metal has mainly traded sideways, but this week hit its highest level in almost a year. The precious metal reached $775 per ounce while its sister, platinum, climbed to nearly $1,500 an ounce.
In January, I indicated that platinum and palladium looked extremely compelling. There were supply and demand drivers I felt would drive the metals higher.
Just this week, the U.S. Mint is “ending a four-year exit from the market” by selling one-ounce American Eagle platinum bullion coins, writes Frank Tang from Reuters. According to a wholesaler this week, initial demand is strong, as 1,000 coins have already been scooped up.
Like I discussed with Resource Investing News at the Vancouver Resource Investment Conference, industrial demand has been gaining strength. Take rising automobile sales in the U.S. that I talked about a few months ago. With interest rates on car loans so low, Americans have been replacing their clunkers with more fuel efficient cars, which is positive for platinum and palladium.
It’s a similar story in emerging markets. In Africa, the GDP without a leveraged economy is still growing at 5 percent, and you definitely need platinum and palladium for their vehicles, even if they are diesel.
In China, vehicle sales last year rose faster than expected, climbing nearly 14 percent compared to a year earlier, according to the China Association of Automobile Manufacturers. The country is already the biggest automobile market in the world and millions of new cars on the roads add up fast.
We’re pleased that our technical models signaled initial bullish signs, as our palladium- and platinum-related holdings helped boost the returns of the Gold and Precious Metals Fund (USERX) and the World Precious Minerals Fund (UNWPX.
Renewable Energy Could Get You More Green
In our webcast this week, Brian Hicks, portfolio manager of the Global Resources Fund (PSPFX), talked about four opportunities he sees in resources over 2014.
One relates to China’s focus on alternative energy.
In BP’s latest Energy Outlook 2035, you can see the incredible long-term growth anticipated in the renewable energy industry. In terms of volume growth, China is expected to surpass the European Union countries by 2035. Based on this secular transformation, the local clean energy sector should continue to benefit.
Specifically, wind power and solar look especially attractive, especially given the excessive pollution in the Asian giant. Take a look at CLSA data: In 2009, the country had about 0.2 percent of the global market. By 2014, it’s estimated to grow to one third of the global market.
China isn’t the only country with a growing renewable energy market. After the massive earthquake hit Japan in 2011, the solar market is taking off there too.
If you were too busy to tune into our webcast this week, you missed a good discussion among Brian Hicks, John Derrick and me. It was an hour chock-filled with investing ideas in the U.S. market, emerging countries, resources and gold. However, it’s not too late to watch the replay at your leisure this weekend.
- Major market indices finished higher this week. The Dow Jones Industrial Average rose 0.80 percent. The S&P 500 Stock Index gained 1.00 percent, while the Nasdaq Composite advanced 0.65 percent. The Russell 2000 small capitalization index rose by 1.71 percent this week.
- The Hang Seng Composite fell 0.64 percent; Taiwan gained 0.86 percent while the KOSPI fell 0.27 percent. The 10-year Treasury bond yield rose 14 basis points this week to 2.79 percent.
Domestic Equity Market
The S&P 500 Index rose to new highs again this week. The market was led by both financials and traditional cyclical areas as confidence in an economic recovery continues to build. Economic data was generally good and anything that even hinted of a weather impact was given a pass.
- The financials sector was the leader this week as banks and insurance names were strong. Bank of America and MetLife were among the best performers this week. It was a broad-based rally in financials with many stocks appearing to “catch up” with the market after lagging through February.
- The industrials sector was also strong this week, with transportation companies particularly robust. Delta Air Lines, Kansas City Southern, CSX Corp. and Union Pacific were all among the best performers. Delta and airline names were strong after a positive February update from Delta. Railroad companies were buoyed by rising coal demand after such a cold winter in much of the country.
- Valero Energy was the best performer in the S&P 500 rising 10.44 percent this week. Enthusiasm among investors is building for profitability to improve in coming months.
- The utilities sector underperformed. It was another “risk on” week and bond yields moved sharply higher, hurting the attractiveness of traditional utilities.
- The health care sector took a breather this week as it has been a very strong area over the past year. Biotechnology names came under pressure after New York Federal Reserve Bank President Bill Dudley commented that biotech stocks could have gotten ahead of themselves from a valuation perspective, along with farmland and leveraged loans.
- Staples Inc. was the worst performer in the S&P 500 this week, falling 15.53 percent. The company reported disappointing earnings and revenue along with a weaker forecast, announcing the closure of 225 stores to cut costs.
- The current macro environment remains positive as economic data remains robust enough to give investors confidence in an economic recovery, but not too strong as to force the Federal Reserve to aggressively change course in the near term.
- Money flows are likely to find their way into domestic U.S. equities and out of bonds and emerging markets.
- The improving economic situation could possibly drive equity prices well into 2014.
- A short-term market consolidation period after such strong performance over the past six months cannot be ruled out.
- Higher interest rates are a threat for the whole economy. The Fed must walk a fine line and there is potential for policy error.
- A lot of good news is potentially priced into the market and the economy will need to deliver to maintain the positive momentum.
Treasury bond yields moved sharply higher this week as economic data was generally supportive of continued economic recovery as well as maintaining the current quantitative easing (QE) taper pace. Two key pieces of economic data were released this week, the ISM manufacturing index and the employment report. The ISM Manufacturing Index bounced back in February, ahead of expectations. Nonfarm payrolls grew ahead of expectations by 175,000 in February, and considering all the bad weather, the market embraced this number. One other indicator that is not normally highlighted can be seen in the chart below, which shows that household net worth grew by nearly 14 percent in the fourth quarter versus a year ago. That is close to a $3 trillion change in net worth in the fourth quarter, partially explaining some of the enthusiasm for equities and the housing market.
- The ISM Manufacturing Index rose to 53.2 in February, back into expansion territory even with poor weather during the month.
- The February employment report was generally well received as nonfarm payrolls grew by 175,000, beating low expectations.
- Household wealth surged by almost $3 trillion in the fourth quarter. The Federal Reserve was aiming to create a wealth effect through QE to spur on the economy, and they appear to have accomplished just that.
- The ISM Non-Manufacturing Index fell to 51.6, the worst reading in four years, and a counterpoint to the better ISM manufacturing data.
- Auto sales at General Motors and Ford fell in February. The companies cited bad weather, but that still creates a question mark for the economy.
- A debt default by a solar company in China raised concerns this week for the broader financial sector in China, along with the country’s ability to continue growing at the government-set 7.5 percent.
- The Federal Reserve member commentary this week more-or-less confirms that tapering would proceed as planned.
- The International Monetary Fund (IMF) released a report recently highlighting the deflation risk in Europe. It is exactly this type of thinking that could spur additional easing policies from the European Central Bank (ECB), even though that did not happen this week.
- There are many moving parts to the taper decision and although the Fed began the process, it is very possible that tapering could be delayed if the economy stumbles.
- Several emerging market countries are raising interest rates at an aggressive pace to either deal with inflation or a weak currency. It could be the beginning of a new global interest rate cycle for higher rates.
- Trade and/or currency “wars” cannot be ruled out which may cause unintended consequences and volatility in the financial markets.
- China remains a wildcard for economic recovery and the economy has shown some cracks in recent months. This is similar to how last year started and China found its footing, something similar needs to happen this time around.
For the week, spot gold closed at $1340.42, up $13.98 per ounce, or 1.05 percent. Gold stocks, as measured by the NYSE Arca Gold Miners Index, climbed 1.40 percent. The U.S. Trade-Weighted Dollar Index was down 0.03 percent for the week.
- The analysts at CIBC World Markets published an interesting note comparing the current 2014 rally with the rally in 2009, both of which were preceded by a 29-percent drop from the highs during those times. Equities have outperformed bullion by roughly 14 percent during this 2014 rally, still shy of the 32 percent outperformance during the 2009 rally. In addition, the outperformance in the juniors and intermediates over the first months of 2014 could continue for the remainder of the year if we were to take a page from history. This was indeed exactly the case in 2009.
- A series of debt deals were launched this week in the gold sector as the fixed-income market reopens for junior Canadian mining companies on the back of a recovery in the gold price and improved investor confidence. In one of the announced transactions, Imperial Metals Corp. plans to sell $325 million of high-yield bonds, and C$200 million of loans to fund the development of its highly prospective Red Chris copper and gold deposit in British Columbia.
- A Manhattan federal court filed a class action lawsuit claiming that five banks that oversee the century-old London gold-fix benchmark colluded to manipulate it. Authorities around the world are already investigating the manipulation of the gold market benchmark for signs of wrongdoing. Canadian hedge fund billionaire Eric Sprott cites the investigations into gold price manipulation as one of the triggers for a gold re-rating to $2,400 per ounce in a twelve-month span.
- The Perth Mint, Australia’s largest, announced that its February gold coin and bar sales reached 47,003 ounces, compared to 64,818 ounces in January. In addition, prices at the Shanghai Gold Exchange have been at parity, or at a mild discount to international prices, over the past few days as a result of a somewhat expected seasonal liquidity withdrawal by the People’s Bank of China (PBOC) as the high demand from Chinese New Year came to an end.
- Barrick Gold could face higher fines or even a revocation of the environmental license for its controversial Pascua Lama project, after a higher court annulled a record fine imposed to the company by the Chilean environmental agency. The judges ruled that each of the detected breaches must be dealt with independently, which leaves the company exposed to a significantly greater fine than the original of $16.4 million.
- In commenting on the current strikes and unrest in the country, South Africa’s Minister of Mineral Resources, Susan Shabangu, did not display a great deal of optimism. The Minister said we are definitely looking at a rationalization to a much smaller sector, where labor intensity declines over time. In her view, the problem is on how to get traditional mining companies to restructure into highly mechanized operations that can remain profitable in a new gold price environment.
- Palladium has soared to an eleven-month high on worries that economic sanctions against Russia could disrupt exports of the metal from the world‘s largest producer, and exacerbate an already tight supply situation. According to Kitco, the worries come when the market was already dealing with reduced supplies as a result of a nearly six-week-old strike in South Africa’s platinum-group-metals mining sector. South Africa is the world’s second-largest producer of palladium.
- Paradigm Capital published a report on the supply demand equation for gold this year, citing four significant factors that bode well for gold prices going into 2014. The ETF unwinding is practically unlikely to repeat, China became the largest consumer of gold in 2013 (and this year is off to an even better start), central banks are net buyers, and lastly, hedging is a drag for a higher gold price (for now remaining muted). According to Paradigm’s analysts, the magnitude of global demand for gold is in the 4,000- to 4,400-tonne range. This bodes incredibly well for gold, especially at a time when the biggest gold producers say global output will fall short of expectations.
- Gold jewelers in India are planning a nationwide shutdown to demand easing of curbs on precious metals imports. Jewelers want the import tax cut to 2 percent from 10 percent, and a relaxation of re-export requirements. The pressure on the government is mounting, especially following the recent release of the third fiscal quarter trade numbers, showing the nation’s current account deficit narrowed to the lowest in at least four years.
- ABN AMRO, the largest Dutch bank by assets, reports that China’s gold demand is likely to be lower in 2014 as investor sentiment improves, and confidence in the Chinese policymakers’ ability to manage the economic transition is bolstered. Similarly, UBS says the rapid rise in speculative long gold trades raises the potential for a short-term “wash-out” as geopolitical risks come off recent highs.
- The Obama administration’s $4 trillion budget for fiscal year 2015 targets, among other things, the elimination of wasteful spending, providing a “fair return” to taxpayers from mineral development. This “fair return” includes charging a royalty on hardrock minerals such as gold, silver and copper, as well as a quest to levy an abandoned mine’s lands fee.
- CEO of Sibanye Gold Limited, Neal Froneman, was quoted saying that South African miners will resist government proposals for black empowerment ownership to be kept above 26 percent, even in cases where empowerment groups sell their stakes. The South African Department of Mineral Resources will publish a proposal later this year to force black empowerment ownerships to remain above 26 percent, even as companies argue that previous deals have diluted shareholders.
- Nickel climbed to a nine-month high as the Indonesian export ban begins to impact China’s stockpiles, while Philippine nickel ore (containing 1.8 percent nickel) prices have risen 29 percent since the January ban.
- Wheat posted its biggest weekly gain in 19 months amid concern that freezing weather damaged winter crops in the U.S. along with concerns over delayed shipments following unrest in Ukraine.
- U.S. corn futures held steady on Friday, but the grain was poised to record its biggest weekly rise in 10 months on potential disruptions to supplies from Ukraine and strong demand for U.S. stocks.
- China steel inventories rose for the eleventh-straight week to 20.9 million tonnes at week ending February 28, and 1 percent from the prior week.
- Low prices are forcing aluminum smelters in China to shut up to 2 million tonnes of capacity, according to industry sources. Chinese spot aluminum traded below 13,000 yuan per tonne ($2,100 and -9 percent year-to-date) this week, the lowest since mid-2009.
- A slackening in demand from Chinese steel mills has pressed down iron ore prices during each of the past six trading days. China buys around 60 percent of the iron ore traded by sea, which it uses to make steel for industries ranging from construction to automobile manufacturing. In recent days, China's steelmakers have been spooked by concerns that credit to property developers is drying up, as that could portend a slump in the real-estate market and a tumble in demand for building materials.
- China will allocate $35 billion to environmental protection and energy conservation in 2014 in an attempt to control pollution. 50,000 coal fired furnaces will be shut and 6 million high emission vehicles will be removed from roads, while diesel grades will also be raised.
- China plans to phase out 27 million tonnes of steel capacity in 2014 to enhance environmental protection, energy consumption and technology standards. China’s crude steel capacity reached 1,025 million tonnes by the end of 2013, while 30 million tonnes of new capacity will be built in 2014.
- China plans to raise city gate prices of natural gas consumed by non-residential users later this year, the National Development and Reform Commission said in its work report issued Wednesday at the start of the annual session of the National People's Congress. This would be the first natural gas price hike since July last year, when the central government increased city gate prices for non-residential gas consumers by an average 15.4 percent across the country, resulting in an average city gate price of yuan 1.95 per cubic meter, or about $8.90 per million British thermal units.
- Given the importance of Russian commodity production and exports for world markets, the threat of economic sanctions on Russia could have important implications for commodity markets.
- Non-commercial speculative positions in the oil market now stand at the highest level we have on record. If this begins to unwind it could be an additional source of potential downside risk to oil prices near term. Indeed, the share of net long positions held by speculators within the total open interest as reported by the Commodity Futures Trading Commission (CFTC) rose last week to 25 percent.
- Poland's economic growth accelerated in the December quarter. Gross domestic product (GDP) increased 2.7 percent on an annual basis in the fourth quarter, from 1.8 percent growth recorded in the third quarter. In addition, the HSBC Poland Manufacturing PMI Index rose to 55.9 last month from 55.4 in January.
- India’s current account deficit narrowed to a four-year low in the fiscal third quarter, aided by a decline in gold imports and a revival of exports. The deficit stood at 0.9 percent of GDP in the three months ending December 31.
- The Philippines’ government budget deficit in 2013 came in at 1.4 percent of GDP, lower than 2 percent targeted and 2.3 percent in 2012, as revenue grew twice-as-fast as spending on a year-over-year basis. The Philippine peso continued to strengthen by 0.76 percent in the last week, trading at the highest level in two months.
- Brazil’s primary budget surplus narrowed in January, marking a weak start for the government’s effort to boost savings and regain credibility with investors this year. The shrinking primary budget surpluses have widened the country’s overall budget deficit, which includes interest payments to a three-year high of 3.28 percent of GDP.
- Eurozone manufacturing PMI slowed to 53.2 in February from a stronger 54.0 in January, with the German print falling but still staying in growth territory. The overall survey is consistent with the most recent eurozone industrial output growing at 1 percent. The new orders data shows the block is still in expansion, but the pace has weakened from recent months.
- Taiwan’s exports in February contracted by 8.3 percent month-over-month, after adjusting for seasonality and distortions related to Chinese New Year, while imports rose marginally. The trade surplus declined to $1.6 billion in February from $3 billion in January.
- Despite concerns related to current account deficit last year, aggregate foreign direct investment into the five largest Southeast Asian countries rose 7 percent in 2013 to $128.4 billion, overtaking the $117.6 billion into China. Younger demographics, lower labor costs, robust domestic demand, and rising geopolitical competition among superpowers should help sustain favorable investment cycles in Southeast Asia, especially in faster growing countries like the Philippines and Indonesia.
- In spite of the “Black Monday” sell-off in Russia, resulting from speculation of Western sanctions being imposed on the country, some Russian stocks are set to outperform based on strong fundamentals. While familiar Russian companies such as Gazprom and Lukoil are highly exposed to the political tensions in the region, we prefer dynamic, independent, shareholder-driven companies such as Mail.Ru Group, an Internet company focused on social networks and gaming, along with Yandex, the dominant Internet portal in Russia. Both of these companies are removed from the negative sociopolitical perception that triggered Monday’s Russian sell-off.
- The Bank of Greece has released the results of the stress tests on the back of the BlackRock review, showing the Greek banking sector requires an extra 6.4 billion euros in capital. Piraeus Bank announced a 1.75 billion euros financing to shore up its Tier 1 capital ratio, and to repay preferred shares of 750 million euros. The repayment of preferred shares makes sense in the long run, and together with the shoring up of its balance sheet, removes a large overhang for Piraeus Bank. Over the course of the past months, European banks that have come to market to recapitalize and shore up capital positions have largely outperformed those who haven’t.
- On Thursday, J.P. Morgan downgraded its view of Russia to underweight from overweight, arguing that the biggest economic loser from a protracted standoff between Russia and the west would almost certainly be Russia itself. The crisis erased $58 billion from Russian equities in three days, and with global emerging market funds still a relative overweight in Russia, a continuation of the standoff makes further downside possible.
- Angst over Russian expansionism is spreading across the former Soviet Union, as President Putin held snap military drills in the Baltic Sea, just as Russian troops descended into Ukraine’s Crimean Peninsula. Putin, who labeled the Soviet breakup as the greatest geopolitical catastrophe of the century, has the potential to continue destabilizing the region as he claims that former Soviet states are actively supporting anti-Russian movements in Eastern Europe.
- China’s first onshore corporate bond default this week may potentially raise the specter of more negative credit events, especially from industries ridden with overcapacity and high leverage, as well as any associated ripple effect.
The tables show the weekly, monthly and quarterly performance statistics of major equity and commodity market benchmarks of our family of funds.
Weekly Performance Index Close Weekly
DJIA 16,452.72 +131.01 +0.80% S&P 500 1,878.04 +18.59 +1.00% S&P Energy 640.16 +1.80 +0.28% S&P Basic Materials 300.89 +4.25 +1.43% Nasdaq 4,336.22 +28.10 +0.65% Russell 2000 1,203.32 +20.29 +1.71% Hang Seng Composite Index 3,147.94 -20.29 -0.64% Korean KOSPI Index 1,974.68 -5.31 -0.27% S&P/TSX Canadian Gold Index 200.92 +2.54 +1.28% XAU 100.64 +1.09 +1.09% Gold Futures 1,340.20 +18.60 +1.41% Oil Futures 102.59 0 0% Natural Gas Futures 4.62 +0.01 +0.15% 10-Yr Treasury Bond 2.79 +0.14 +5.32% Monthly Performance Index Close Monthly
DJIA 16,452.72 +1,007.48 +6.52% S&P 500 1,878.04 +122.84 +7.00% S&P Energy 640.16 +36.18 +5.99% S&P Basic Materials 300.89 +27.17 +9.93% Nasdaq 4,336.22 +304.70 +7.56% Russell 2000 1,203.32 +100.47 +9.11% Hang Seng Composite Index 3,147.94 -332.01 -14.83% Korean KOSPI Index 1,974.68 +87.83 +4.65% S&P/TSX Canadian Gold Index 200.92 +18.91 +10.39% XAU 100.64 +10.09 +11.14% Gold Futures 1,340.20 +89.00 +7.11% Oil Futures 102.59 +5.40 +5.56% Natural Gas Futures 4.62 -0.76 -14.12% 10-Yr Treasury Bond 2.79 +0.16 +6.05% Quarterly Performance Index Close Quarterly
DJIA 16,452.72 +432.52 +2.70% S&P 500 1,878.04 +72.95 +4.04% S&P Energy 640.16 +7.23 +1.14% S&P Basic Materials 300.89 +22.53 +8.09% Nasdaq 4,336.22 +273.70 +6.74% Russell 2000 1,203.32 +71.93 +6.36% Hang Seng Composite Index 3,147.94 -162.71 -4.91% Korean KOSPI Index 1,974.68 -5.73 -0.29% S&P/TSX Canadian Gold Index 200.92 +49.96 +33.09% XAU 100.64 +19.84 +24.55% Gold Futures 1,340.20 +110.60 +8.99% Oil Futures 102.59 +4.94 +5.06% Natural Gas Futures 4.62 +0.50 +12.20% 10-Yr Treasury Bond 2.79 -0.07 -2.35%
Please consider carefully a fund’s investment objectives, risks, charges and expenses. For this and other important information, obtain a fund prospectus by visiting www.usfunds.com or by calling 1-800-US-FUNDS (1-800-873-8637). Read it carefully before investing. Distributed by U.S. Global Brokerage, Inc.
With respect to the Fidelity Institutional Money Market Treasury Portfolio, which is distributed by Fidelity Distributors Corporation, an investment in a money market fund is neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although money market funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund.
All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor.
Foreign and emerging market investing involves special risks such as currency fluctuation and less public disclosure, as well as economic and political risk. By investing in a specific geographic region, a regional fund’s returns and share price may be more volatile than those of a less concentrated portfolio.
The Emerging Europe Fund invests more than 25 percent of its investments in companies principally engaged in the oil & gas or banking industries. The risk of concentrating investments in this group of industries will make the fund more susceptible to risk in these industries than funds which do not concentrate their investments in an industry and may make the fund’s performance more volatile.
Because the Global Resources Fund concentrates its investments in a specific industry, the fund may be subject to greater risks and fluctuations than a portfolio representing a broader range of industries.
Gold, precious metals, and precious minerals funds may be susceptible to adverse economic, political or regulatory developments due to concentrating in a single theme. The prices of gold, precious metals, and precious minerals are subject to substantial price fluctuations over short periods of time and may be affected by unpredicted international monetary and political policies. We suggest investing no more than 5 percent to 10 percent of your portfolio in these sectors.
Bond funds are subject to interest-rate risk; their value declines as interest rates rise. Tax-exempt income is federal income tax free. A portion of this income may be subject to state and local income taxes, and if applicable, may subject certain investors to the Alternative Minimum Tax as well. The Near-Term Tax Free Fund may invest up to 20 percent of its assets in securities that pay taxable interest. Income or fund distributions attributable to capital gains are usually subject to both state and federal income taxes. The Near-Term Tax Free Fund may be exposed to risks related to a concentration of investments in a particular state or geographic area. These investments present risks resulting from changes in economic conditions of the region or issuer.
Investing in real estate securities involves risks including the potential loss of principal resulting from changes in property value, interest rates, taxes and changes in regulatory requirements.
Past performance does not guarantee future results.
Some link(s) above may be directed to a third-party website(s). U.S. Global Investors does not endorse all information supplied by this/these website(s) and is not responsible for its/their content.
These market comments were compiled using Bloomberg and Reuters financial news.
Holdings as a percentage of net assets as of 12/31/13:
Gazprom OAO: Emerging Europe Fund, 4.22%
Lukoil OAO: Emerging Europe Fund, 5.01%
Yandex NV: Emerging Europe Fund, 3.08%
Mail.Ru Group Ltd.: Emerging Europe Fund, 3.62%
Imperial Metals Corp.: Gold and Precious Metals Fund, 2.45%; World Precious Minerals Fund, 2.82%
Barrick Gold Corp.: Gold and Precious Metals Fund, 2.93%; World Precious Minerals Fund, 0.45%
Sibanye Gold Ltd.: 0.0%
Bank of America Corp.: All American Equity Fund, 3.00%; Holmes Growth Macro-Trends Fund, 2.09%
MetLife Inc.: 0.0%
Delta Airlines Inc.: 0.0%
Kansas City Southern Railway Co.: Holmes Growth Macro-Trends Fund, 0.46%
CSX Corp.: 0.0%
Union Pacific Corp.: 0.0%
Valero Energy Corp.: 0.0%
Staples Inc.: 0.0%
General Motors Co.: 0.0%
Ford Motor Co.: 0.0%
*The above-mentioned indices are not total returns. These returns reflect simple appreciation only and do not reflect dividend reinvestment.
The Dow Jones Industrial Average is a price-weighted average of 30 blue chip stocks that are generally leaders in their industry.
The S&P 500 Stock Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies.
The Nasdaq Composite Index is a capitalization-weighted index of all Nasdaq National Market and SmallCap stocks.
The Russell 2000 Index® is a U.S. equity index measuring the performance of the 2,000 smallest companies in the Russell 3000®, a widely recognized small-cap index.
The Hang Seng Composite Index is a market capitalization-weighted index that comprises the top 200 companies listed on Stock Exchange of Hong Kong, based on average market cap for the 12 months.
The Taiwan Stock Exchange Index is a capitalization-weighted index of all listed common shares traded on the Taiwan Stock Exchange.
The Korea Stock Price Index is a capitalization-weighted index of all common shares and preferred shares on the Korean Stock Exchanges.
The Philadelphia Stock Exchange Gold and Silver Index (XAU) is a capitalization-weighted index that includes the leading companies involved in the mining of gold and silver.
The U.S. Trade Weighted Dollar Index provides a general indication of the international value of the U.S. dollar.
The S&P/TSX Canadian Gold Capped Sector Index is a modified capitalization-weighted index, whose equity weights are capped 25 percent and index constituents are derived from a subset stock pool of S&P/TSX Composite Index stocks.
The S&P 500 Energy Index is a capitalization-weighted index that tracks the companies in the energy sector as a subset of the S&P 500.
The S&P 500 Materials Index is a capitalization-weighted index that tracks the companies in the material sector as a subset of the S&P 500.
The S&P 500 Financials Index is a capitalization-weighted index. The index was developed with a base level of 10 for the 1941-43 base period.
The S&P 500 Industrials Index is a Materials Index is a capitalization-weighted index that tracks the companies in the industrial sector as a subset of the S&P 500.
The S&P 500 Consumer Discretionary Index is a capitalization-weighted index that tracks the companies in the consumer discretionary sector as a subset of the S&P 500.
The S&P 500 Information Technology Index is a capitalization-weighted index that tracks the companies in the information technology sector as a subset of the S&P 500.
The S&P 500 Consumer Staples Index is a Materials Index is a capitalization-weighted index that tracks the companies in the consumer staples sector as a subset of the S&P 500.
The S&P 500 Utilities Index is a capitalization-weighted index that tracks the companies in the utilities sector as a subset of the S&P 500.
The S&P 500 Healthcare Index is a capitalization-weighted index that tracks the companies in the healthcare sector as a subset of the S&P 500.
The S&P 500 Telecom Index is a Materials Index is a capitalization-weighted index that tracks the companies in the telecom sector as a subset of the S&P 500.
The NYSE Arca Gold Miners Index is a modified market capitalization weighted index comprised of publicly traded companies involved primarily in the mining for gold and silver.
The Consumer Price Index (CPI) is one of the most widely recognized price measures for tracking the price of a market basket of goods and services purchased by individuals. The weights of components are based on consumer spending patterns.
The J.P. Morgan Global Purchasing Manager’s Index is an indicator of the economic health of the global manufacturing sector. The PMI index is based on five major indicators: new orders, inventory levels, production, supplier deliveries and the employment environment.
The ISM manufacturing composite index is a diffusion index calculated from five of the eight sub-components of a monthly survey of purchasing managers at roughly 300 manufacturing firms from 21 industries in all 50 states.
The ISM Nonmanufacturing index based on surveys of more than 400 non-manufacturing firms' purchasing and supply executives, within 60 sectors across the nation, by the Institute of Supply Management (ISM). The ISM Non-Manufacturing Index tracks economic data, like the ISM Non-Manufacturing Business Activity Index. A composite diffusion index is created based on the data from these surveys that monitors economic conditions of the nation.
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