Third Quarter 2019

The All American Equity Fund had a total return of 0.45 percent in the third quarter of 2019, underperforming its benchmark, the S&P 500 Index , which returned 1.70 percent. See complete fund performance here.

Much of the All American Equity Fund’s underperformance was due to an under allocation in technology, namely the “FAANG” stocks (Facebook, Apple, Amazon, Netflix and Google).  We continue to focus on companies that reward investors with handsome dividends, growth in dividend yields and companies that continue to repurchase outstanding shares, among other factors.  Unfortunately, during the most recent quarter investors did not pursue these fundamental metrics and instead chased the mega-cap growth companies.

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.


  • The fund’s allocations to consumer discretionary, consumer staples and materials attributed most to performance.  Consumer discretionary seemed to get a boost from investors anticipating an uptick in consumer activity due to the Federal Reserve reducing the benchmark interest rate 25 basis points in mid-July.
  • The fund’s overweight in consumer discretionary and consumer staples proved to be a good decision, as evidenced by the allocation’s outperformance.  The August swoon in the market seemed to attract investors to the defensive consumer staples sector.
  • Investments in Sherwin-Williams, Pultegroup and Evergy were among the best contributors to fund performance.  Sherwin Williams reported earnings for the second quarter beating expectations and raised gross margins going forward.


  • The fund’s allocations to energy, industrials and information technology were the largest drags on performance due to the fact that the “FAANG” stocks are not constituents in any of these sectors. 
  • The fund’s overweight in energy had the largest adverse contribution to the fund’s overall performance.  Energy was also the largest drag on the benchmark.  The sector has been weak and in a price downtrend, as evidenced by the fact that traders have been selling positions in the sector during significant price rallies.
  • Investments in Cabot Oil & Gas, EOG Resources and HCA Healthcare were the greatest absolute detractors to the fund’s performance. Cabot Oil & Gas announced they were going to substantially slow growth in favor of free cash flow.  


Surveying investment potential for the fourth quarter, the prospect of the Fed reducing the benchmark interest rate in the coming meetings seems to be driving supportive demand for equity shares, bonds and gold. Additionally, lower interest rates are stimulating the demand for residential housing which should help provide a boost to GDP.  As usual, the question on nearly every investor’s mind is not when, but how much the Fed will cut rates during the final meetings of 2019.

We do see some headwinds. Many analysts believe the trade war will not end any time in the near future since there is a possibility of a presidential impeachment. Plus, investor appetite for additional investments in the capital markets continues to decline.  

For example, investors are seemingly becoming more stringent when selecting equity investments as evidenced by the recent poor performance in the initial public offering (IPO) market.  This distaste was driven by the fact that seven out of the ten largest IPOs this year engaged in a multi-class voting structure to help insulate management from shareholders.  Not only do investors dislike this strategy, but such strategies can prevent a company from being included in many of the passive indexes. In doing so, the stocks will most likely miss out on investment flows from index funds.

Ultimately, with an accommodative Fed, the current administration’s desire to have strong stock market performance and institutional appetite for equity fund-like returns, we feel the probability of higher equity prices are in our future.


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.

Fund portfolios are actively managed, and holdings may change daily. 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 9/30/2019: Sherwin-Williams Co/The 3.06%, Pultegroup Inc 3.10%, Evergy Inc 3.03%, Cabot Oil & Gas Corp 3.07%, EOG Resources Inc 3.05%, HCA Healthcare Inc 3.07%.

Net Asset Value
as of 11/11/2019

Global Resources Fund PSPFX $4.37 -0.02 Gold and Precious Metals Fund USERX $8.47 -0.06 World Precious Minerals Fund UNWPX $2.91 -0.03 China Region Fund USCOX $9.00 -0.17 Emerging Europe Fund EUROX $7.44 -0.05 All American Equity Fund GBTFX $25.33 -0.10 Holmes Macro Trends Fund MEGAX $16.77 -0.05 Near-Term Tax Free Fund NEARX $2.22 0.01 U.S. Government Securities Ultra-Short Bond Fund UGSDX $2.00 No Change