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Continuing a Winning Formula for 2014

Please note: The articles listed below contain historical material. The data provided was current at the time of publication. For current information regarding any of the funds mentioned in these presentations, please visit the appropriate fund performance page.

January 10, 2014

By Frank Holmes
CEO and Chief Investment Officer
U.S. Global Investors

In any competition, sports or investment management, there are lessons to learn to improve and better results. That’s why football players and coaches sit side-by-side for hours poring over the team’s performance. What worked? What didn’t? Every play, despite whether the game was won or lost, is dissected.

We replay our “game film” of the funds on a daily basis, scrutinizing our stock selection process along with macro factors to analyze what contributed to or detracted from performance.

Here’s one of the many charts we review that compares the Holmes Macro Trends Fund (ACBGX) against its benchmark S&P 1500 Index. You can see the fund’s attractive risk and return profile over the past year, as it outperformed its benchmark while only adding a few basis points of risk. See the fund’s performance history.

In Recent Days, U.S. energy, Industrials, Materials Stocks Catch Up
click to enlarge

But, just as every great coach or experienced investment manager tries to answer, how is that performance repeated and is it possible to further boost absolute returns?

We believe there’s a way that increases the odds of winning. It’s by combining a bottom-up approach with a top-down strategy: Find great, fast-growing and shareholder-focused companies and focus on the best stocks in the sectors experiencing positive momentum. That’s the approach the Holmes Macro Trends Fund takes.

Bottom-Up: Finding “True Growth” Companies

Where-Will-Gold-Head-in-2014

Fast-growing and shareholder-focused companies are bred with distinct strands of DNA that drive their success. “True growth” businesses typically have revenues growing at more than 10 percent (or about five times faster than U.S. nominal GDP), generate a high 20 percent earnings growth rate, and have at least 20 percent return on equity.

Research shows that companies with these superior growth qualities have outperformed over time.

Top-Down: Emphasis on Strongest Sectors

However, depending on the market cycle, certain sectors can be in or out of favor.  Sometimes cyclical stocks outperform; other times, defensive stocks rise in value.
Oftentimes, there are factors that drive or inhibit their performance. It could be government policies, such as Obamacare boosting many health care companies. Or it could be the falling price of a resource that narrows the profit margins of miners.

The result is wide price fluctuations among sectors from year-to-year. If you look at the annual returns over the past decade of each of the 10 sectors in the S&P 500 Index, in any given year the average difference between the best-performing sector and the worst-performing sector has been around 36 percent.

Identifying and overweighting the top-performing sectors increases the odds that the portfolio will outperform its benchmark. Alternatively, it is just as important to minimize investing in the bottom sectors.

Therefore, the goal is to tactically allocate capital to the most robust sectors with identifiable long-term trends and underweight sectors with the weakest trends.

Today, our proprietary model tells us the top sectors are consumer discretionary, health care and industrials and the data is backed by several familiar trends. For consumer discretionary, we see growth in retailers and consumer Internet companies. In health care, there are new products, favorable demographics and visible growth. The synchronized global economic recovery and energy infrastructure are driving industrials.

Over the past several months, we’ve published many times on the great U.S. energy boom, but we continue to believe many investors are underestimating the impact this spectacular renaissance will have on the global oil and gas landscape for years to come. In fact, take a look at the chart in the natural resources section below that highlights the fact that U.S. crude oil production is at a 25-year high!

Our new Special Energy Report expands on this topic as well as what you should look for when investing in the sector. Download your copy here.

Reasons for a Growth-Oriented Market in 2014
Since the Federal Reserve first announced Operation Twist in September 2011, the cheapest stocks gained the most, according to Credit Suisse. During a period of very low interest rates, declining volatility, and extremely low price-to-earnings, there was “strong outperformance of deep value stocks.”

In the face of higher interest rates, “investors can look to transition to a more growth-oriented market,” says CS. This environment gives us even more confidence in our belief that the Holmes Macro Trends Fund has a winning strategy for 2014. Take a closer look at ACBGX today.

While the performance of U.S. stocks demonstrates a stronger domestic economy, I’m eager to get a reading on the global economy and resources from leaders around the world when I travel to five countries across four continents in the next few months.

Where-Will-Gold-Head-in-2014

The Vancouver Resource Investment Conference will be my first stop. There I’ll be speaking on a panel alongside resources experts Frank Giustra and Ned Goodman. Frank Giustra is the founder of Lionsgate Entertainment, which is one of the largest independent film companies in the world. He also launched Wheaton River, which was acquired by Goldcorp and Silver Wheaton.

Ned Goodman, founder, president and CEO of Dundee Capital Markets in Toronto, is widely recognized as one of Canada’s most successful investment counselors. He sold DundeeWealth’s asset management unit to the Bank of Nova Scotia back in 2011 and in a Bloomberg News article, he is even “more bullish on gold now than I’ve ever been,” because he believes, “it’s only a matter of time before currencies lose value and inflation rises.”

These two men have been my mentors for years and I’m excited to be able to exchange ideas with them. For all investors, it’s valuable to stay curious and discover how they’ve succeeded in business and life.

After Vancouver, I’ll spend a few days in Los Angeles at a global leadership conference for CEOs, getting ideas and sharing experiences with business leaders.

In February, I’ll fly to Cape Town, South Africa to speak at the 2014 Mining Indaba. This conference brings together national mining ministers and government leaders from all over Africa, as well as hundreds of mining services executives interested in African mining. While on the continent, I plan to visit a few companies that the funds own, kicking the huge tires of mining trucks and getting my boots dirty out in the field.

Then I’ll be heading to Hong Kong for the Mines and Money conference where I’ll be a keynote speaker and I’ll wrap up my global travels with an “adventure investing” trip to Turkey where investors are invited to come along to explore this dynamic economy that offers great growth potential. If you’d like to learn more about this opportunity, feel free to email us at editor@usfunds.com.

So over the next several months, you can look forward to insights from this resourceful road warrior on the psychology and science of resources and world markets.

Total Annualized Returns as of 12/31/13
  One-Year Five-Year Ten-Year Gross Expense Ratio
Holmes Macro Trends Fund 39.38% 15.69% 6.89% 1.86%
S&P 1500 Index 32.79% 18.37% 7.77% NA
 

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Index Summary

  • Major market indices finished mixed this week.  The Dow Jones Industrial Average fell 0.20 percent. The S&P 500 Stock Index gained 0.60 percent, while the Nasdaq Composite advanced 1.03 percent. The Russell 2000 small capitalization index moved higher by 0.73 percent this week.
  • The Hang Seng Composite rose 0.13 percent; Taiwan fell 0.20 percent while the KOSPI dropped 0.39 percent. The 10-year Treasury bond yield fell 14 basis points this week at 2.86 percent.
In the News
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January 8, 2014
Frank Holmes Talks Gold with Porter Stansberry
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January 7, 2014
Investing Ideas from the “Superstars of Resource Investing”
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January 2, 2014
Where to Find a Fixed-Income Component for Your 2014 Portfolio
www.usfunds.com/in-the-news

Domestic Equity Market

The S&P 500 Index ended the week higher and shrugged off a weak jobs report on Friday. Health care and utilities led the way this week as investors embraced biotechnology stocks and medical device companies. Utilities rallied on Friday as Treasury yields dropped sharply after the weak payroll report.

S&P Economic Sectors
click to enlarge

Strengths

  • The health care sector was the best performer this week led by Forest Labs. The company rose by more than 15 percent as it announced its acquisition of Aptalis Pharma (a private company). Other strong performers included Intuitive Surgical, Boston Scientific and McKesson.
  • The utilities sector was not far behind, rising by more than 2 percent. Most of the gains occurred on Friday, and virtually every constituent in the index was higher as Treasury yields fell sharply after a weak employment report.
  • Forest Labs was the best performer in the S&P 500 this week rising 15.73 percent, but Constellation Brands was a close second, rising 15.36 percent. The company reported earnings on Wednesday that were well ahead of expectations and also raised its fiscal 2014 guidance.

Weaknesses

  • The telecom services sector was the worst performer this week. AT&T fell by more than 3 percent as competition heats up with T-Mobile.
  • The materials sector was also weak as Alcoa reported earnings that disappointed, while steel and base metals also sold off. Cliffs Natural Resources, US Steel and Freeport-McMoRan were among the worst performers.
  • Bed Bath & Beyond was the worst performer in the S&P 500 this week, falling 13.10 percent. The company reported quarterly results that were shy of forecasts.

Opportunities

  • The current macro environment continues to be 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.

Threats

  • A market consolidation could occur in the near term after such strong performance.
  • Higher interest rates are a threat for the whole economy. The Fed must walk a fine line and the potential for policy error is large.
  • A lot of potentially good news is priced into the market and the economy will need to deliver to maintain the positive momentum in the market.

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The Economy and Bond Market

Treasury bond yields fell sharply this week on the back of a weak employment report released on Friday. Nonfarm payrolls grew a meager 74,000, well below the roughly 200,000 that was estimated. Nonfarm payroll growth is a key indicator of the health of the economy and will force the Fed to reconsider its recently implemented taper of quantitative easing.

10-Year Treasury Yield
click to enlarge

Strengths

  • Factory orders rose 1.8 percent in November, validating the other strong data points in manufacturing.
  • The trade deficit fell to a four-year low with declining oil imports a significant part of the story.
  • Various sentiment indices in Europe continue to improve and some are at multi-year highs. These readings reinforce the idea of continued economic improvement in Europe.

Weaknesses

  • Nonfarm payroll growth was very disappointing.
  • Retailers reported significant discounting during the holiday season as consumers apparently needed additional motivation to be persuaded to buy.
  • The ISM Non-Manufacturing Index unexpectedly weakened in December, driven lower by the new orders component.

Opportunities

  • The Fed continues to remain committed to an overall accommodative policy. With this week’s data, newly confirmed Fed Chairman Janet Yellen likely will not deviate from an accommodative path.
  • Key global central bankers remain in easing mode such as the European Central Bank (ECB), Bank of England and the Bank of Japan. ECB President Mario Draghi vowed to take “decisive action” if needed to combat deflation.
  • There are many moving parts to the taper decision and while the Fed began the process, it is very possible that tapering could be delayed if economic data slows.

Threats

  • Inflation in some corners of the globe is getting the attention of policy makers and may be an early indicator for the rest of the world.
  • Trade and/or currency “wars” cannot be ruled out which may cause unintended consequences and volatility in the financial markets.
  • The recent bond market sell off may be a “shot across the bow” as the markets reassess the changing macro dynamics.

Invest in America

 

World Precious Minerals Fund - UNWPX • Gold and Precious Metals Fund - USERX

Gold Market

For the week, spot gold closed at $1,246.35, up $9.34 per ounce, or 0.76 percent. Gold stocks, as measured by the NYSE Arca Gold Miners Index, rose 0.44 percent. The U.S. Trade-Weighted Dollar Index lost 0.18 percent for the week.

Strengths

  • According to Bloomberg, gold analysts are the most bullish in a year on speculation that investors are covering near-record short positions. Following the first annual decline in 13 years, fifteen analysts surveyed by Bloomberg expect gold to rise this week, while two are bearish and four are neutral; that is the highest proportion of bulls on record since December 2012.
  • Tiffany & Co., the world’s second-largest luxury jeweler retailer, reported a 4 percent increase in holiday sales, with positive sales growth in all regions. Demand was largely driven by an 11 percent increase in Europe, a 6 percent rise in the Americas and a 5 percent boost in Asian sales.
  • Klondex Mines, the Nevada based high-grade producer that recently purchased Newmont’s Midas mine, was featured in Grant’s Interest Rate Observer this Friday. Pierre Lassonde, the legendary Chairman of Franco-Nevada, commented that Klondex is expected to do 150,000 ounces a year at a very high grade, resulting in one of the lowest costs in the industry. In addition, Lassonde gave a vote of confidence to CEO Paul Huet, who demonstrated an exceptional knowledge of the deposit and the Midas mill while working for him during his tenure at Newmont.

U.S. Condition of All Federal Reserve Banks Total Assets, December 27, 2013 $4.0 Trillion
click to enlarge

Weaknesses

  • India’s Economic Affairs Secretary Arvind Mayaram announced that the restrictions on gold imports are likely to continue until at least the end of March, unless a significant improvement takes place with regard to the nation’s current account deficit. It is worth mentioning that pressure has been building as Central Bank Governor Raghuram Rajan has voiced his inclination to remove the restrictions, which encourages smuggling.
  • Bank of America lowered its 2014 gold price forecast by 11 percent to $1,150 per ounce, arguing that physical purchases from Indian and Chinese buyers will weaken. In a similar note, ABN AMRO analysts say gold may drop back below $1,180 per ounce if U.S. macro data continues on the strong side.
  • Scotia Mocatta had a look at the continued redemptions in gold ETF products, which have not ceased in the new year. In its view, good macro data is encouraging further liquidations as investors continue to look for “risk on” trades. The most recent behavior revalidates the opinion of some analysts who argue the gold price has dissociated itself from ETF flows, forming a bullish, technical double bottom – a trait that has evidenced quite strongly this January.

Opportunities

  • The Swiss National Bank’s gold holdings are the target of a national initiative and called by citizens collecting signatures, demanding that at least 20 percent of the central bank’s assets be in the form of gold. The measure would also bar the central bank from selling any of its holdings and would require the repatriation of the SNB’s gold holdings with the Bank of Canada and the Bank of England.
  • Valuations of gold miners are approaching their cheapest relative to book value in at least two decades, precisely at the time when free cash flow generation has bottomed and cost reductions are kicking in. The current valuations present opportunities for junior miners to acquire mining assets, just like Northern Star Resources did by purchasing the Plutonic mine from Barrick, based solely on the value of the proven and probable reserves.
  • The recent shift in Canadian government policy is having a pronounced effect on the value of the “loonie,” or the Canadian dollar. The Canadian government appears to have shifted gears and decided that a weaker currency, via monetary policy accommodation, is now required to hasten the rebalancing of the Canadian economy. The implications for Canada’s exporting industries, which encompass gold producers, are enormous. We discussed earlier how a decrease in the value of the Canadian dollar could effectively erase any losses arising from declining gold prices for those producers with large, Canadian portfolios such as Agnico Eagle Mines.

Threats

  • The macro economy in the U.S. could have started the year off a little better. This Friday, the official jobs report for December showed a net creation of 74,000 jobs, far too short of the market forecast for a 200,000 net job creation. The reading should be seen as an opportunity to reevaluate economic assumptions, to rebalance portfolios and to awaken from complacency before the market turns.
  • Just before Christmas, the Zimbabwe budget included a provision that indicated to the implementation of a raw material export tax, specifically on platinum group metals. The government has called a meeting with the Chamber of Mines, Impala and Anglo American to discuss a possible 15 percent levy on platinum group metals exports.
  • After shedding some 30 million ounces of gold from a high of 85 million ounces, David Rosenberg of Gluskin Sheff believes it is fair to ask whether the fire sale is done. According to Rosenberg, sentiment could scarcely be more negative, with even the good macro data looking like it is priced in. What’s most interesting to see is that gold and bonds declined in the same year – a very rare phenomenon. The most recent memories of this trend occurring have coincided with gold market bottoms, in which market players shrug their shoulders at the mention of gold.

The Case For Gold

Energy and Natural Resources Market

Strengths

  • The U.S. Department of Commerce reported on Tuesday that the U.S. trade deficit narrowed 12.9 percent to $34.3 billion in November. The surprisingly positive figure is a result of exports hitting a record high, boosted by increased sales of oil, and a substantial reduction in demand for foreign oil.
  • The weekly change in U.S. natural gas storage was a withdrawal of 157 billion cubic feet (Bcf), exceeding analysts’ expectations amid the coldest weather in 20 years. The current storage level is 16 percent below this time last year, and 10 percent lower than the five-year average.
  • The Kurdistan Regional Government has given public notice of the commencement date of exports from the region, marking a milestone for stocks in the area such as Genel Energy. Crude oil is being exported via pipeline to Turkey. Producers in the region are expected to reach full pipeline export capacity of 300,000 barrels per day (bpd) by December.

Weaknesses

  • The price of crude oil hit an eight-month low this week of $91.66, continuing the downward trend established in the prior week.
  • Natural gas prices pulled back 6 percent this week after a strong move towards the $4.50 level on record low temperatures.
  • BNP Paribas sees more downside potential in spot coal prices in the near term on stable inventory at Qinhuangdao Port, in addition to sufficient supplies at independent Chinese power producers, and is expected to last two to three weeks.

Opportunities

10-Year Treasury Yield
click to enlarge

  • China’s copper demand could surprise to the upside on China’s State Grid forecast for a 13 percent increase in 2014 spending. The State Grid Corporation of China provides power to 80 percent of China. The power sector accounts for more than 40 percent of Chinese copper demand. Outsized spending in 2013 helped tighten the Chinese market for most of the year. However, the new target exceeds Barclay’s forecast and suggests that copper demand from the power sector could stay as strong, if not stronger, in 2014.
  • UBS reports U.S. gross fixed investment has fallen to 13 percent of GDP, on par with Greece, and well below the 16 to 21 percent range of the last six decades. The trend may be about to reverse, and the resulting rise in investment demand could provide a strong boost to energy and materials, especially at a time when U.S. corporations are sitting on $1 trillion of cash.
  • Senator Lisa Murkowski, the leading Republican on the Energy and Natural Resources Committee, called for President Obama to end the ban on crude oil exports, as U.S. crude production hits a 25-year high. Big oil is in favor of repealing the ban, which could allow producers of sweet crude to obtain better prices in the international market, while gulf refiners could import cheaper heavy crude suitable for their refineries.

Threat

  • Mortgage rates in the U.S. hit the highest since September, with the average 30-year fixed rate climbing to 4.54 percent this week. The sustained rate increase is likely to stifle demand for housing and home builders, as well as lowering demand for lumber.
  • Aluminium prices fell 11.6 percent year-on-year to the lowest quarterly average since 2009. Near record inventories at the LME warehouses have been blamed on an estimated 1.8 percent global oversupply. The pressure on producers is expected to increase as new warehousing rules at the LME are expected to lower physical delivery premiums.
Frank Talk Insight for Investors
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January 7, 2014
A Gold Outlook with The Gold Report
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January 6, 2014
Gold Stocks: What to Expect in the New Year
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December 31, 2013
Interactive Recap: Our Favorites from 2013
A Blog by Frank Holmes, C.E.O. and Chief Investment Officer

China Region Fund - USCOX  •  Emerging Europe Fund - EUROX

Emerging Markets
 

Strengths

  • Turkey’s industrial production number for the month of November registered a 4.6 percent increase over the same period last year, beating expectations for a 4.1 percent increase. The top sectors contributing to the uptick were driven largely by the export-oriented sectors, as well as domestic demand for computers, electrical machinery, and furniture.
  • The HSBC Emerging Markets Index, a monthly indicator derived from purchasing managers’ index (PMI) surveys, recorded broad-based goods output growth across the economies covered, with the strongest expansions seen in Taiwan, the Czech Republic, and Turkey. Curiously, these three markets are large exporters to the European Union (EU).
  • China’s consumer price index (CPI) dropped more than expected in December, falling to 2.5 percent over the same period last year, and lower than the 3 percent recorded in November, and the forecast of 2.7 percent. According to HSBC economist Xiaoping Ma, "inflation pressures remain modest, which will allow policy makers to continue focusing on policies to support growth while implementing structural reform measures in 2014."

Weaknesses

  • Despite the uptick in goods output growth of most emerging markets, the HSBC Emerging Markets Index showed that overall output across the emerging markets universe grew at a weaker pace relative to the prior reading in November. Manufacturing activity continues to support the slower growth in service activity, which grew at the lowest rate in three months.
  • Headline consumer price inflation in the Philippines reached a two-year high in December, at 4.1 percent year-on-year. The pick-up in inflation came despite a price freeze imposed by the government in November in areas hit by Typhoon Haiyan. Data from the National Statistics Office showed that prices rose in year-on-year terms in almost all goods categories in December, with food prices rising by 5 percent for the month.
  • Brazil’s consumer price inflation for 2013 exceeded every estimate from analysts as it accelerated to 5.91 percent from the previous year. The reading boosts pressure on the central bank to extend the world’s biggest tightening cycle, which raised its benchmark interest rate from 7.25 percent to 10 percent over the course of 2013.

Opportunities

10-Year Treasury Yield
click to enlarge

  • China became the world’s biggest trader in goods for the first time in 2013, overtaking the U.S. growth in intra-Asia trade and increasing flows with the Middle East; both were big drivers behind the export figures. The total value of China’s imports and exports in 2013 was $4.16 trillion, a 7.6 percent increase according to figures released by the Chinese government on Friday. The U.S. will release its full-year figures in February, but it is a virtual certainty that it will not top China as the world’s biggest goods-trading nation.
  • Laurence Balanco, technical analyst at CLSA, argues that Asia and emerging markets have a chance to commence outperformance in the second half of this year. Similarly, CLSA’s head of micro strategy, Desh Peramunetilleke, highlights that developed markets are now trading at nearly two standard deviations relative to emerging markets on a ten-year average trailing price-to-book basis. This roadmap is certainly plausible, with hopes for a cyclical acceleration when conviction that China is getting more of a grip on its structural problem even at the cost of some growth. Another potential leg up would be if the Indian election proves positive from a stock market perspective.
  • Following the successful issuance of Irish government debt at multi-year, record-low yields, peripheral European economies saw their spreads narrow considerably relative to the German Bund. Greek bond yield spreads to German bonds of similar characteristics narrowed by a whopping 40 basis points on Monday alone, reaching the lowest level since June 2010. A number of European economies took advantage of the risk premium decrease to issue debt.

Threats

  • While emerging markets are still expanding faster than developed economies, the margin will shrink to the smallest since 2002, according to Credit Suisse Group AG. The growth rate in advanced economies will almost double to 2.1 percent this year, while emerging markets will expand 5.3 percent. Morgan Stanley recommended investors reduce holdings of emerging market currencies and bonds, while Goldman Sachs advised clients to cut their emerging market allocation to 6 percent from 9 percent, citing the lack of economic reforms to improve growth.
  • Mild temperatures across Europe this winter have lowered demand for natural gas, with net storage withdrawals running 24 percent below five-year averages. Gazprom, the largest natural gas extractor in the world, is the main supplier to the European market upon which it relies to subsidize the sale of cheap gas to Russian political allies and neighboring countries.
  • China’s cabinet imposed new controls on the multi-trillion dollar shadow banking industry. The rules ban transactions set up to avoid existing regulation, as China seeks to shore up enforcement. The shadow banking system is seen as a threat to financial stability in China, and the recent controls are proof of concerns at the highest government levels. The government tightened rules already last year, when it limited bond sales by local governments and companies in industries with overcapacity, while allowing money market rates to spike as a deterrent to borrowing.

Do you recognize these world cities?

Leaders and Laggards

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
Change($)
Weekly
Change(%)
DJIA 16,437.05 -32.94 -0.20%
S&P 500 1,842.37 +11.00 +0.60%
S&P Energy 641.83 +0.30 +0.05%
S&P Basic Materials 288.25 -0.78 -0.27%
Nasdaq 4,174.67 +42.76 +1.03%
Russell 2000 1,164.53 +8.44 +0.73%
Hang Seng Composite Index 3,190.03 -11.61 -0.36%
Korean KOSPI Index 1,938.54 -7.60 -0.39%
S&P/TSX Canadian Gold Index 166.59 +5.04 +3.12%
XAU 87.05 +0.42 +0.48%
Gold Futures 1,245.70 +7.10 +0.57%
Oil Futures 92.81 -1.15 -1.22%
Natural Gas Futures 4.08 -0.23 -5.32%
10-Yr Treasury Bond 2.86 -0.14 -4.57%
 
Monthly Performance
Index Close Monthly
Change($)
Monthly
Change(%)
DJIA 16,437.05 +463.92 +2.90%
S&P 500 1,842.37 +39.75 +2.21%
S&P Energy 641.83 +10.08 +1.60%
S&P Basic Materials 288.25 +7.77 +2.77%
Nasdaq 4,174.67 +114.18 +2.81%
Russell 2000 1,164.53 +44.84 +4.00%
Hang Seng Composite Index 3,190.03 -332.01 -14.83%
Korean KOSPI Index 1,938.54 -54.91 -2.75%
S&P/TSX Canadian Gold Index 166.59 +6.38 +3.98%
XAU 87.05 +1.26 +1.47%
Gold Futures 1,245.70 -15.40 -1.22%
Oil Futures 92.81 -5.70 -5.79%
Natural Gas Futures 4.08 -0.16 -3.82%
10-Yr Treasury Bond 2.86 +0.06 +2.03%
 
Quarterly Performance
Index Close Quarterly
Change($)
Quarterly
Change(%)
DJIA 16,437.05 +1,199.94 +7.88%
S&P 500 1,842.37 +139.17 +8.17%
S&P Energy 641.83 +27.91 +4.55%
S&P Basic Materials 288.25 +20.08 +7.49%
Nasdaq 4,174.67 +382.79 +10.10%
Russell 2000 1,164.53 +80.22 +7.40%
Hang Seng Composite Index 3,190.03 -25.56 -0.79%
Korean KOSPI Index 1,938.54 -86.36 -4.26%
S&P/TSX Canadian Gold Index 166.59 +4.05 +2.49%
XAU 87.05 +0.30 +0.35%
Gold Futures 1,245.70 -23.10 -1.82%
Oil Futures 92.81 -9.21 -9.03%
Natural Gas Futures 4.08 +0.30 +7.92%
10-Yr Treasury Bond 2.86 +0.17 +6.36%

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% 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.

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.

Holdings as a percentage of net assets as of 9/30/13:

Forest Laboratories, Inc.: 0.0%
Intuitive Surgical, Inc.: 0.0%
Boston Scientific Corp.: 0.0%
McKesson Corp.: MegaTrends Fund, 2.34%
Constellation Brands, Inc.: All American Equity Fund, 1.19%
AT&T, Inc.: All American Equity Fund, 1.18%
T-Mobile: 0.0%
Alcoa: 0.0%
Cliffs Natural Resources, Inc.: 0.0%
US Steel: 0.0%
Freeport-McMoRan Copper & Gold: Global Resources Fund, 3.27%; Gold and Precious Metals Fund, 0.14%; World Precious Minerals Fund, 0.13%
Bed Bath & Beyond, Inc.: 0.0%
Tiffany & Co.: 0.0%
Klondex Mines Ltd: Gold and Precious Metals Fund, 0.16%; World Precious Minerals Fund, 3.79%
Newmont Mining Corp.: Gold and Precious Metals Fund, 2.23%; World Precious Minerals Fund, 0.43%
Northern Star Resources Ltd: 0.0%
Barrick Gold Corp.: Gold and Precious Metals Fund, 4.25%; World Precious Minerals Fund, 0.47%
Agnico Eagle Mines Ltd: Gold and Precious Metals Fund, 1.60%; World Precious Minerals Fund, 1.80%
Platinum Group Metals Ltd: World Precious Minerals Fund, 0.99%
Impala Platinum Holdings Ltd: 0.0%
Anglo American plc: 0.0%
Genel Energy plc: Emerging Europe Fund, 2.69%
Gazprom: Emerging Europe Fund, 4.05%
 

*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 S&P BARRA Growth Index is a capitalization-weighted index of all stocks in the S&P 500 that have high price-to-book ratios.
The S&P BARRA Value Index is a capitalization-weighted index of all stocks in the S&P 500 that have low price-to-book ratios.
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 MSCI Russia Index is a free-float weighted equity index developed in 1994 to track major equities traded in the Russian market.
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 Bloomberg Gold Bear/Bull Sentiment Indicator charts the percent of respondents in a weekly Bloomberg News survey of traders, investors, and analysts predicting gold prices will rise the following week. The number of participants in the survey, which is completed every Friday, may vary.
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 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.
The HSBC Emerging Markets Index is a weighted composite indicator derived from national HSBC Purchasing Managers’ Index reports in 17 emerging economies.
The Purchasing Manager’s Index is an indicator of the economic health of the manufacturing sector. The PMI index is based on five major indicators: new orders, inventory levels, production, supplier deliveries and the employment environment.
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.

Net Asset Value
as of 06/26/2017

Global Resources Fund PSPFX $5.31 -0.01 Gold and Precious Metals Fund USERX $7.29 -0.03 World Precious Minerals Fund UNWPX $6.22 -0.04 China Region Fund USCOX $9.49 0.10 Emerging Europe Fund EUROX $6.26 0.03 All American Equity Fund GBTFX $24.39 0.06 Holmes Macro Trends Fund MEGAX $19.82 0.01 Near-Term Tax Free Fund NEARX $2.23 No Change U.S. Government Securities Ultra-Short Bond Fund UGSDX $2.00 No Change