Third Quarter 2020

The All American Equity Fund had a total return of 7.13 percent in the third quarter of 2020, slightly underperforming its benchmark, the S&P 500 Index, which returned 8.93 percent. See complete fund performance here. The fund’s lag to the benchmark was mainly a result of underweighting the information technology and industrial sectors.

U.S. equities rallied sharply for a second straight quarter in a Q3 that saw the S&P and Nasdaq hit a string of new record highs. Growth continued to outperform value on the back of its outsized leverage to the central bank liquidity tailwind and secular growth and disruption themes. Consumer discretionary was the best performing sector with homebuilders, housing-related retailers and casual diners some of the standouts.

Past performance does not guarantee future results. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost.

Strengths

  • The fund’s underweight allocation to energy and overweight allocation to consumer discretionary contributed the most toward performance. Consumer discretionary was the best performing sector with homebuilders, housing-related retailers and casual diners some of the standouts.
  • The fund’s stock selection in the consumer discretionary sector proved skillful, evidenced by the strong contribution to performance.
  • Investments in D.R. Horton, Costco and Amazon were among the best contributors to fund performance.

Weaknesses

  • The fund’s underweight allocations to information technology and industrials were the largest drags on performance due to the fund’s model underweighting the sectors.
  • The fund’s stock selection in the information technology and industrial sectors showed poor performance, failing to produce satisfactory results.
  • Investments in Evergy, Huntington Ingalls and Becton, Dickinson and Company were among the greatest detractors to the fund’s performance.

Outlook

Former Vice President Biden has maintained a solid lead over President Trump in the national polls. While Trump has long been the preferred market candidate given his stance on taxes and deregulation, strategists have increasingly changed their sentiment regarding a Biden presidency. The market has been shifting its outlook on Biden towards the potential for infrastructure stimulus, higher wages, dampened trade tensions, a more cohesive response to the coronavirus pandemic and less onerous changes to corporate taxes than have been previewed.

A COVID-19 vaccine will continue to be a driver moving forward. Positive vaccine progress this fall could further boost stocks, particularly those at the epicenter of coronavirus pain such as travel and select retailers. Nonetheless, with COVID-19 cases picking up as we head into the fall and a tumultuous upcoming election, volatility in markets is set to remain elevated.

 

The S&P 500 Stock Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies. There is no guarantee that the issuers of any securities will declare dividends in the future or that, if declared, will remain at current levels or increase over time. The dividend yield is the ratio of a company's annual dividend compared to its share price. The NASDAQ Composite Index is a broad-based capitalization-weighted index of stocks in all three NASDAQ tiers: Global Select, Global Market and Capital Market. It’s not possible to invest in an index.

Fund portfolios are actively managed, and holdings may change daily and should not be considered a recommendation to buy or sell any security. Holdings are reported as of the most recent quarter-end. Holdings in the All American Equity Fund as a percentage of net assets as of 9/30/2020: DR Horton Inc (4.33%), Costco Wholesale Corp (5.97%), Amazon.com Inc (5.72%), Evergy Inc (2.73%), Huntington Ingalls Industries (1.39%), Becton Dickinson and Co (0.87%).

Net Asset Value
as of 10/26/2020

Global Resources Fund PSPFX $4.83 -0.14 Gold and Precious Metals Fund USERX $13.23 -0.22 World Precious Minerals Fund UNWPX $4.73 -0.20 China Region Fund USCOX $9.42 -0.08 Emerging Europe Fund EUROX $5.39 -0.10 All American Equity Fund GBTFX $23.97 -0.39 Global Luxury Goods Fund USLUX $17.07 -0.33 Near-Term Tax Free Fund NEARX $2.24 No Change U.S. Government Securities Ultra-Short Bond Fund UGSDX $2.00 No Change