Which Way Will the Pendulum Swing for Gold?
August 11, 2012
Please note: Due to an unexpected power outage we were unable to update the Investor Alert on Friday. The podcast will be available on Monday. We apologize for the delay. Thank you for reading.
By Frank Holmes
CEO and Chief Investment Officer
U.S. Global Investors
One of the most fascinating aspects when watching a sporting event like the Olympics is the historical statistics highlighting the tremendous advances in athleticism over the years. In the spirit of the events this summer, BTN Research compared gold’s advancement from the beginning of the games in Beijing to the London Olympics.
On the day of China’s auspicious opening ceremonies on August 8, 2008, gold was $857.80 an ounce. By the time the world watched the opening ceremonies of the 2012 London Summer Olympic Games, the precious metal had climbed to $1,617.90 an ounce. This represents a remarkable increase of 89 percent in four years.
Athletes are often asked if they can keep improving their outstanding performance; I’m asked if gold can continue climbing. As I like to remind investors, gold isn’t always on an upward path. When looking at the average monthly returns over the past decade, you can see that short-term setbacks are normal throughout the year. The yellow metal has historically declined in value in March and June; gold stocks see much greater fluctuations from month-to-month.
So while gold has its monthly ups and downs, you can see that, on a historical basis, we have arrived at gold’s peak performance period of the year. Based on 10 years of data, gold bullion has historically increased 2 percent in August and 4 percent in September.
Gold stocks, as measured by the NYSE Arca Gold BUGS Index (HUI), have historically performed even better in these two months. Over the past 10 years, gold companies have climbed 8 percent and almost 3 percent in August and September, respectively.
Since the beginning of August, gold and gold stocks are already following their historical pattern, as we’ve seen just a hint of an increase in the price of gold, but a significant bounce in gold companies.
Spot gold has only climbed 0.4 percent, compared to the HUI, which has increased about 5 percent since August 1. This boost in gold stocks helps to close the gap between gold companies and their underlying commodity, as I discussed last week. I indicated that the disparities meant that the cheapest resources are not found in the ground—they’re listed.
Since then, it was announced that Endeavor Mining would purchase Canada’s Avion Gold Corporation in an effort to consolidate the West African gold space. This acquisition represented a 56.4 percent premium to the trading day prior to the announcement and illustrates how extremely undervalued gold companies have been.
“Beaten-down gold stocks are an incredible fundamental bargain,” says Adam Hamilton from Zeal Intelligence. His research indicates that gold companies are “super-cheap” relative to not only the price of gold, but also on a price-to-earnings basis. When he weighted the price-to-earnings ratios of the stocks in the HUI by market capitalization, he found that gold stocks are at the lowest levels than they have been during gold’s entire bull market. Gold companies are also cheaper than the overall stock market, as “a dollar of gold-stock profits costs investors $12, but the same dollar is going for $18 in the general markets,” according to Zeal’s research.
Hamilton says, “Like the rest of the markets, sentiment flows and ebbs in the gold stocks. Sometimes investors love them and bid them up to dizzying heights as greed reigns. But then the great sentiment pendulum starts swinging towards the opposite extreme of fear. And gold stocks are crushed to ridiculous unsustainable lows like we saw last month. Realize neither excessive greed nor excessive fear can persist for long.”
There is a caveat for gold stock investors in the short-term, though. As Investor Alert readers know, I frequently look at presidential cycle trends to determine where stocks may be heading. From 1984 through 2008, the performance of the Philadelphia Stock Exchange Gold and Silver Index (XAU) has historically been weak during the year of a presidential election. The silver lining is that the year following the election, the XAU has historically bounced back.
So which way will the pendulum swing this fall for gold and gold stocks? The market may wait to see the policy actions by the Federal Reserve and the European Central Bank. Credit Suisse thinks it will likely “be critical in determining the path of the U.S. dollar and equities, and by association, gold.”
If the market sees progress on structural and fiscal reforms from Europe and additional easing from the Fed, these actions would have the “potential to be powerfully bullish for equities” and might “drive renewed investor enthusiasm for gold that could see the metal trade up to and beyond the $1,700 mark,” says Credit Suisse.
- The major market indices were higher this week. The Dow Jones Industrial Average rose 0.85 percent. The S&P 500 Stock Index rose 1.07 percent, while the Nasdaq Composite advanced 1.78 percent.
- Barra Value outperformed Barra Growth as Barra Value rose 1.38 percent while the Barra Growth Index appreciated 0.81 percent for the week. The Russell 2000 closed the week with a gain of 1.66 percent.
- The Hang Seng Composite rose 2.55 percent; Taiwan rose 3.10 percent, while the KOSPI added 5.29 percent.
- The 10-year Treasury bond yield rose 10 basis points for the week, to 1.66 percent .
Domestic Equity Market
The S&P 500 Index rose 1.07 percent this week as the equity market has rallied for five weeks in a row. It has been a choppy ride but the market is looking past the current economic weakness and focusing on expected government policy action. Cyclicals led the way this week with materials, energy and technology setting the pace. Defensive, lower beta sectors such as utilities and consumer staples were down for the week.
- The materials sector was the best performer this week rising 2.83 percent driven by a rally in the steel and metals and mining areas. Standout performers included Freeport—McMoRan, U.S. Steel and Allegheny Technology.
- The energy sector also performed well with coal names particularly strong. Coal companies Consol Energy, Peabody Energy and Alpha Natural Resources all rose by more than 6 percent as interest in the space returns as the entire sector has been under tremendous pressure over the past year with many stocks in this space down 50 percent or more.
- Dean Foods was the best performer in the S&P 500 this week rising by 36 percent as the company announced it will spin off its organic and soy milk operation.
- The utility sector lagged on what appeared to be sector rotation into more cyclical areas. Utilities have still outperformed over the past three months.
- Consumer staples also underperformed this week, likely due to sector rotation.
- Monster Beverage was the worst performer this week in the S&P 500, falling by nearly 19 percent. The company reported earnings that disappointed and the company announced it had received a subpoena relating to energy drink sales and promotion.
- The market remains focused on the potential monetary policy action from the European Central Bank (ECB) and China and is looking past the current economic weakness.
- While policy makers in Europe have made strides to stabilize the situation, many risks remain and the situation remains very fluid.
- The S&P 500 is now less than 1 percent away from the highs reached in April and is at a technical resistance level.
Near-Term Tax Free Fund - NEARX • Tax Free Fund - USUTX
Treasury yields rose for the third week in a row. It is interesting that as we get closer to additional monetary easing in the U.S., Europe and China, the Treasury bond market has already anticipated that and is selling into the news. This would follow a similar pattern as the two quantitative easing programs in 2009 and 2010, as bond yields moved higher immediately after the announcements.
- Initial jobless claims fell to 361,000 this week, indicating a somewhat better job dynamic than a couple of months ago.
- The Labor Department reported that job openings in June were the highest since July 2008.
- The U.S. trade deficit narrowed to $42.9 billion in June, lower by more than $5 billion. Exports grew while imports contracted.
- New foreclosures rose 6 percent in July, the third monthly increase in a row.
- European economic data remains weak as Italian GDP has contracted for four quarters in a row.
- Economic news out of China was weaker than expected for July as exports grew a meager 1 percent and industrial production was weaker than expected.
- The ECB appears ready to implement some form of quantitative easing in the very near future.
- With weak economic data out of China this week, odds of additional easing measures continue to move higher.
- Interest rates are likely to remain very low for the foreseeable future.
- Europe remains a wildcard with the markets shifting focus on a weekly basis.
- China also remains somewhat of a wildcard as the economy has slowed and officials appear in no hurry to take decisive action.
For the week, spot gold closed at $1,620.20 up $16.42 per ounce, or 1.04 percent. Gold stocks, as measured by the NYSE Arca Gold Miners Index, rose 5.05 percent. The U.S. Trade-Weighted Dollar Index edged higher, gaining 0.22 percent for the week.
- Merger and acquisition activity is picking up. On Monday, Australia's Silver Lake Resources said it will acquire Integra Mining in an all-scrip deal to create a gold miner with a market value of nearly $1 billion. The combined companies would create a gold producer with a 6.6 million ounce resource base, with current production of 200,000 ounces projected to more than double in 2014.
- Endeavour Mining’s announcement that it plans to acquire Avion Gold sent Avion’s shares up 20 percent.
- Overall, few companies have reported positive dynamics with their second-quarter updates. However, Randgold is certainly the exception and reported group gold production of 210,534 ounces of gold in the quarter, a 27 percent increase over the first quarter and a 14 percent rise over the second quarter of 2011, and with a pleasant decline in total cash costs to boot. Randgold Resources, under the leadership of Mark Bristow, is well on its way to becoming a Tier 1 gold miner and its latest milestone is the official opening of its Gounkoto mine in Mali. Capital cost to develop the mine was repaid in less than a year.
- Roy Sebag of Natural Resource Holdings compiled a report showcasing the rarity of +1 million ounce gold deposits. Of the 439 mines or deposits identified, 189 were identified as producing mines owned by companies. This left only 250 undeveloped deposits but the declining quality of available resources was also shown. There is a 37 percent drop in grade between that of producing mines as compared to undeveloped deposits. Higher gold prices will be needed to bring these projects into production.
- In a story published Sunday, the Financial Times stated, "A four-year investigation into the possible manipulation of the silver markets looks increasingly likely to be dropped after U.S. regulators failed to find enough evidence to support a legal case, according to three people familiar with the situation." One analyst we spoke to commented that regulators in the U.S. are much more interested in prosecuting foreign banks for any misdoings. Potential charges against Goldman Sachs in relation to the mortgage-backed securities scandal were also dropped this week as the Justice Department backed off the case. However, HSBC, Barclays, and now Standard Bank are being pursued on changes ranging from money laundering of the drug trade, fixing interest rates, to allowing illegal trade with Iran.
- Sentiment towards the junior miner space is still weak, at least for the roughly 1,000 prospectors attending the Diggers and Dealers conference in Australia, which has made its industry uncompetitive with taxes and regulation.
- Silver stocks outperformed their golden peers this week. The catalyst was likely the recent fully subscribed $200 million offering of new units by the Sprott Physical Silver Trust and with the associated green shoe being fully taken up by the underwriters. What this means is Sprott will be in the market looking to acquire some 8 million plus ounces of physical silver to fulfill the mandate of the trust. When Sprott launched the Physical Silver Trust securing 15 million ounces, it took a full three months before delivery of the metal was received and, according to Sprott, some of the delivery had not even been mined when the order was put in.
- Draft Russian legislation could facilitate foreign mining of gold and other precious metals within its borders. Undoubtedly, the Russians have realized their overly protective restriction of excluding foreign companies from mining significant gold deposits means that the gold is unlikely to get mined. The draft bill would allow foreign-owned businesses to mine deposits of up to 250 tons (about 8 million troy ounces) of gold, five times the existing cap of 50 tons set in 2008, without facing additional regulation from the state, the documents showed. Another important measure is the suggestion that a discoverer of a strategic deposit could proceed to mine development without the threat that the government could withdraw the license. This should spur more mineral exploration.
- Jamie Sokalsky, the new CEO of Barrick Gold, showed some confidence on his expectations of a turnaround at the company when he acquired 50,000 shares of his own stock through open market purchases recently.
- Niall Ferguson recently penned an essay on the “Stationary State” of the U.S. economy. The mood disorder is especially bad for investors. Only seven out of 47 national stock markets around the world have posted gains in the last 12 months. Ferguson noted that the U.S. economy has created 2.6 million jobs since June 2009. In the same period, 3.1 million workers have signed up for disability benefits. Back in 1992 there was one person on disability benefits for every 36 people in employment. Now the ratio is 1 to 16. Unemployment is being concealed—and rendered permanent—in ways all too familiar to Europeans.
- Nikos Kavalis, an analyst at RBS, noted he was struggling to see where the kind of volumes of investment in gold that we got in 2009 and 2010 are going to come from. Even if there is another round of quantitative easing he feels we are getting close to game over for gold as a lot of investors are reluctant to expand positions. Analyst Robin Bhar of Societe Generale shares Nikos’ disillusionment. "What's the upside to gold with more QE? Maybe $1,800 - certainly not new highs," he commented.
- More trouble for the platinum miners were hinted at this week as the Department of Mineral Resources in South Africa is said to be contemplating having the miners re-up the ownership stakes that were lost by certain Black Economic Empowerment partners that had margin calls, due to being financially extended, and were forced to sell down their ownership stakes.
- The Global Resources Fund gained an additional star from Morningstar and is now a 4-star overall rated fund as of July, 31 2012. This overall rating is out of 121 natural resources peers.
- Copper futures traded flat on the week as data out of China showed that copper imports rebounded in July from the lowest level in 10 months, to 366,548 metric tons, the General Administration of Customs said on its website. This was 5.9 percent higher than in June, and 20 percent higher than a year ago, customs data compiled by Bloomberg show.
- Soybean imports by China, the world’s biggest buyer, gained for a fifth month even as futures in Chicago climbed to a record. Arrivals totaled 5.87 million metric tons in July, the General Administration of Customs said on its website today.
- BHP Billiton Ltd. (BHP) has moved to cut jobs at a regional office in northeastern Australia that handles planning for its metallurgical coal division in an effort to tackle slumping prices for the steelmaking commodity and increased costs.
- Data from China's customs department shows July iron ore imports falling slightly month-over-month to 57.87 million tons from 58.31 million tons last month. Analysts at Dahlman Rose & Co. expect further declines in the upcoming months as demand for iron ore cargoes has slowed and Chinese mills begin to reduce steel production, albeit slowly.
- Natural gas futures fell to a four-week low around $2.80 per mmbtu on lowered expectations of demand for air-conditioning as weather forecasters see cooling temperatures next week.
- Barclays highlighted tightness in the oil market due to supply outages which are mounting both among OPEC and non-OPEC producers. Along with technical and structural shortfalls (Brazil’s June production was lower by 4.9 percent), pipeline linked disruptions are also dominating the reason for outages, and in that subset geopolitics remains the primary cause. Barclays noted Yemen's Maarib pipeline (100 thousand barrels per day) has just resumed flows following an 11-month outage, and it remains vulnerable to a repeat of the series of strikes seen in late 2011. This week has seen an explosion on the Kirkuk-Ceyhan pipeline impacting oil flows up to 300 thousand barrels per day, with repairs expected to take 10 days. This pipeline has come under repeated attacks in the past, but attacks have concentrated on the Iraqi side of the border. Overall, Barclays thinks these outages, along with the reduced availability of Iranian exports, continue to weigh down the supply side, supporting a constructive market balance going into the fourth quarter of 2012.
- Per Reuters, Russia's ministry of natural resources has drafted a bill that will facilitate the access of companies with foreign capital to mine its gold, platinum group metals (PGM) and diamond reserves, according to documents published on a ministry website. Russia's gold reserves account for about 10 percent of the global volume; its share in palladium accounts for 24 percent of global reserves.
- The United Nations called for a suspension of U.S. government-mandated ethanol output amid surging corn prices, the Financial Times reported. The U.S. will use about 40 percent of its corn for ethanol production because of the Congress-enacted mandate despite “huge damage” to the crop from the worst drought in at least half a century, the newspaper reported, citing Jose Graziano da Silva, director-general of the UN’s Food & Agriculture Organization. An immediate, temporary suspension of the ethanol mandate would allow more of the crop to be channeled toward food and feed uses, the FT cited Graziano da Silva as saying.
- China's transition to consumer-led economic growth is forecast to result in growing steel demand, peaking in 2030, as the world's largest consumer of many commodities moves away from investment-led growth, the chief economist of mining titan Rio Tinto (RIO) said this week.
- China's petroleum and chemical industry is expected to grow at a slower pace this year, dragged down by the losses in oil refinery businesses and weakening raw materials demand from export-oriented sectors, an industry federation said Monday. The industry is facing downward pressure, due to sluggish demand from export-oriented sectors such as textiles and toy manufacturing, as well as rising production costs, a growing tax burden and large-scale losses in the refinery and natural gas sectors, said Li Yongwu, chairman of the China Petroleum and Chemical Industry Federation.
- Chinese President Hu Jintao presided over a Central Politburo meeting on July 26. He reaffirmed maintaining stable growth as the top priority and pledged to increase policy support for the real economy. The frequent economic meetings hosted by the president and premier in late July suggest a higher probability for more follow-up measures soon to stabilize growth.
- China’s new bank lending may be about Rmb 700 billion in July, Economic Information Daily reports, showing gradual increase of money supply.
- The Ministry of Railway announced that it plans to spend Rmb 470 billion on railroads and bridges this year.
- Money supply in Association of Southeast Asian Nations (ASEAN) countries is robust, driven by infrastructure and property, and consumer spending. Singapore total domestic banking loans shows 20.9 percent growth year-to-date by the end of June, while it is 12.6 percent for Malaysia, 26.2 percent in Indonesia, 14.6 percent in Thailand and 14.7 percent for Philippines.
- Singapore’s unemployment rate fell in the second quarter to 2 percent from 2.1 percent the previous three months.
- China’s Purchasing Manager’s Index (PMI), China’s official gauge of manufacturing activities, declined by 10 basis points from 50.2 in June to 50.1 in July. It is lower than market consensus of 50.5.
- Taiwan’s second-quarter GDP was down 0.16 percent, versus the estimate of 0.5 percent.
- Korea’s industrial production rose 1.6 percent in June, missing expectation for a 1.8 percent increase and down from May’s 2.6 percent.
- Thailand’s exports fell 4.3 percent in June while imports rose 5 percent, further demonstrating robust domestic demand in the country. Companies that are selling to world markets are in general seeing sales earnings growth slow down, while those that sell to domestic demand are still seeing robust growth, such as telecom, utilities and property. The same happens to China and other ASEAN countries.
- Hong Kong June trade growth missed expectations. Exports were down 4 percent year-over-year and imports were down 2.9 percent.
- Korea’s second-quarter GDP expanded 2.4 percent, growing at the slowest pace in almost three years, below median estimate for a 2.5 percent gain.
- China’s Xi’an city said it would limit vehicle ownership to control traffic congestion.
- The recent strong support for the European project voiced by both the ECB and the German political establishment provides significant tail risk of increased forms of monetary policy support in the coming weeks.
- After the surprise July rate cut in South Africa, the market is pricing in a 25 percent chance that the Monetary Policy Committee will follow up with a further 50 basis point cut by year-end. Monetary policy is already very accommodative, and the policy rate is at multi-decade lows.
- Already representing 17.5 percent of the world’s population, India is projected to surpass China to be the most populous country in the world by the year 2025. With more than 65 percent of its population below the age of 35, it is expected that in the year 2020, the average age of an Indian will be 29 years, compared to 37 years for China.
- The dividend yield of telecommunications companies in Asia ex-Japan are close to 5 percent on average. The dividends are sustainable due to high free cash flow yield. This compares favorably with the 10-year treasury which yields less than 2 percent.
- Investors have heard many times from the Chinese government that it is committed to secure economic growth, but its actions are still behind the curve. Particularly, its inability to find a balanced property policy will affect the growth of the economy.
- High household debt burden, reduced consumer purchasing power and a relatively weak domestic growth outlook bode ill for banking sector growth in Brazil. Existing banking sector stress is likely to grow over the coming quarters on the back of declining interest rates and deteriorating asset quality.
- The Czech central bank forecast GDP will contract 0.9 percent in 2012, as measures to curb the budget deficit damp domestic demand. The economy relies on demand for cars, auto parts and electronics from the EU, which buys about 80 percent of Czech exports.
The tables show the performance of major equity and commodity market benchmarks of our family of funds.
|S&P BARRA Value||635.04||+8.67||+1.38%|
|S&P BARRA Growth||763.29||+6.14||+0.81%|
|S&P Basic Materials||227.54||+6.26||+2.83%|
|Hang Seng Composite Index||2,717.99||+67.52||+2.55%|
|Korean KOSPI Index||1,946.40||+97.72||+5.29%|
|S&P/TSX Canadian Gold Index||298.00||+10.37||+3.61%|
|Natural Gas Futures||2.78||-0.10||-3.48%|
|10-Yr Treasury Bond||1.66||+0.09||+6.01%|
|S&P BARRA Value||635.04||+30.71||+5.08%|
|S&P BARRA Growth||763.29||+33.37||+4.57%|
|S&P Basic Materials||227.54||+10.90||+5.03%|
|Hang Seng Composite Index||2,717.99||-332.01||-14.83%|
|Korean KOSPI Index||1,946.40||+120.01||+6.57%|
|S&P/TSX Canadian Gold Index||298.00||+9.91||+3.44%|
|Natural Gas Futures||2.78||-0.08||-2.66%|
|10-Yr Treasury Bond||1.66||+0.14||+9.22%|
|S&P BARRA Value||635.04||+19.06||+3.09%|
|S&P BARRA Growth||763.29||+28.55||+3.89%|
|S&P Basic Materials||227.54||+5.80||+2.62%|
|Hang Seng Composite Index||2,717.99||-54.49||-1.97%|
|Korean KOSPI Index||1,946.40||+1.47||+0.08%|
|S&P/TSX Canadian Gold Index||298.00||+5.26||+1.80%|
|Natural Gas Futures||2.78||+0.29||+11.66%|
|10-Yr Treasury Bond||1.66||-0.21||-11.24%|
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.
An investment in a money market fund is neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund.
*As of June 30, 2012, PSPFX has an overall rating of 3 stars from Morningstar out of 124 natural resources peers.
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 Eastern European 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. 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.
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. Each 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. Bond funds are subject to interest-rate risk; their value declines as interest rates rise. The tax free funds 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.
These market comments were compiled using Bloomberg and Reuters financial news.
Holdings as a percentage of net assets as of 06/30/12:
ING Groep, N.V.: 0.0%
Freeport-McMoRan Copper & Gold Inc.: Gold and Precious Metals Fund, 3.22%; World Precious Minerals Fund, 2.32%; Global Resources Fund, 1.91%
United States Steel Corp.: 0.0%
Allegheny Technologies, Inc.: 0.0%
Consol Energy Inc.: 0.0%
Peabody Energy Corp.: Global Resources Fund, 1.82%
Alpha Natural Resources, Inc.: 0.0%
Dean Foods Co.: Global MegaTrends Fund, 1.04%
Monster Beverage Corp.: All American Equity Fund, 1.64%; Holmes Growth Fund, 1.56%
BHP Billiton Ltd.: 0.0%
Barclays Plc.: 0.0%
Rio Tinto Plc.: 0.0%
Endeavor Mining Corp.: Gold and Precious Metals Fund, 0.12%; World Precious Minerals Fund, 0.15%
Avion Gold Corp.: Gold and Precious Metals Fund, 0.09%; World Precious Minerals Fund, 0.11%
Silver Lake Resources Ltd.: Gold and Precious Metals Fund, 1.86%; World Precious Minerals Fund, 0.45%
Randgold Resources Ltd.: Gold and Precious Metals Fund, 0.84%%; World Precious Minerals Fund, 0.85%
Natural Resource Holdings Ltd.: 0.0%
The Goldman Sachs Group, Inc.: 0.0%
HSBC Holdings plc.: China Region Fund, 3.34%
Standard Charted plc.: 0.0%
Sprott Physical Silver Trust: 0.0%
The Royal Bank of Scotland plc: 0.0%
Societe Generale SA: 0.0%
The Credit Group Suisse AG: 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 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 S&P/TSX Global Gold Index is an international benchmark tracking the world's leading gold companies with the intent to provide an investable representative index of publicly-traded international gold companies.
The NYSE Arca Gold BUGS (Basket of Unhedged Gold Stocks) Index (HUI) is a modified equal dollar weighted index of companies involved in gold mining. The HUI Index was designed to provide significant exposure to near term movements in gold prices by including companies that do not hedge their gold production beyond 1.5 years.
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 Producer Price Index (PPI) measures prices received by producers at the first commercial sale. The index measures goods at three stages of production: finished, intermediate and crude.
These market comments were compiled using Bloomberg and Reuters financial news.
The MSCI AC (All Country) Asia ex Japan Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of Asia, excluding Japan.
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 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 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.
CLSA China PMI is based upon monthly replies to questionnaires sent to purchasing executives in over 400 industrial companies in China and measures China’s manufacturing activity.
The Producer Price Index (PPI) measures prices received by producers at the first commercial sale. The index measures goods at three stages of production: finished, intermediate and crude.
Morningstar Ratings are based on risk-adjusted return. The Overall Morningstar Rating for a fund is derived from a weighted-average of the performance figures associated with its three-, five- and ten-year (if applicable) Morningstar Rating metrics. Past performance does not guarantee future results. For each fund with at least a three-year history, Morningstar calculates a Morningstar Rating™ based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund’s monthly performance (including the effects of sales charges, loads, and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. (Each share class is counted as a fraction of one fund within this scale and rated separately, which may cause slight variations in the distribution percentages.)