First Quarter 2019

The All American Equity Fund had a total return of 7.13 percent in the first quarter of 2019, underperforming its benchmark, the S&P 500 Index, which returned 13.65 percent. See complete fund performance.

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 largest contributors to the fund were the allocations to information technology and industrials.
  • The fund’s overweight in materials and consumer staples proved to be a good decision, evidenced by the allocation’s outperformance.
  • Investments in ETFs, Union Pacific and Lam Research were among the best contributors to fund performance.

Weaknesses

  • The fund’s allocations to cash, utilities and health care were the largest drags on the fund.
  • The underweight in communication services and health care contributed most to underperformance.
  • Investments in Goodyear Tire & Rubber, AbbVie and CMS Energy were the fund’s worst contributors to performance.

Opportunities

  • UPS beat out Amazon, FedEx and Uber to make America's first revenue-generating drone delivery operations. UPS, in partnership with drone technology company Matternet, began its daily drone delivery of medical supplies within the WakeMed Raleigh Campus in the first quarter of 2019.
  • The number of Americans filing applications for unemployment benefits unexpectedly fell during the first quarter 2019, suggesting labor market conditions remained solid, despite slowing job growth.
  • The jump in existing home sales in February stemmed from the year-end drop in mortgage rates, writes Bloomberg Economics. Since then, the Federal Reserve’s dovish tone has pushed down mortgage rates even further. Along with the deceleration in home prices and rising wages, declining rates are a perfectly timed opportunity to potential homeowners at the start of the spring buying season. 

Threats

  • The rout in health insurers driven by competing policy proposals in Washington that threaten a long period of uncertainty has wiped out about $40 billion of market value.  Progressive Democrats in Congress started to get behind a plan to replace private medical benefits with a government-run single payer system.
  • Weak first-quarter growth and slower job gains in the month of February weighed on attitudes and potentially spending, reports Bloomberg. This is reflected in U.S. consumer confidence, which declined for the fourth time in five months.
  • Whether or not the U.S. will fall into recession in 2019 or next year is a main point of disagreement among economists. That in itself may be an ominous sign, writes Bloomberg’s Mark Whitehouse. As of the end of the first quarter, Bloomberg’s survey of dozens of economists, on the outlook for the U.S., showed that they expected the economy to grow 2.25 percent in the next 12 months. However, there was a lot of variation, particularly on the downside, ranging from 3.2 percent growth to 0.8 percent contraction. According to Whitehouse, variation matters. Back in 2007, although economists weren’t very good at predicting recessions, they did tend to disagree more when one was imminent. That’s what happened before the downturns of 1990 and 2001, and what ultimately happened before 2008.

The S&P 500 Stock Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies. The S&P 1500 Composite Index is a broad-based capitalization-weighted index of 1500 U.S. companies and is comprised of the S&P 400, S&P 500, and the S&P 600. The index was developed with a base value of 100 as of December 30, 1994. The S&P 500 Stock Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies.

The Conference Board Leading Economic Index is an analytic system designed to signal peaks and troughs in the business cycle. The leading, coincident, and lagging economic indexes are essentially composite averages of several individual leading, coincident, or lagging indicators. They are constructed to summarize and reveal common turning point patterns in economic data in a clearer and more convincing manner than any individual component – primarily because they smooth out some of the volatility of individual components.

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 and Holmes Macro Trends Fund as a percentage of net assets as of 3/31/2019: Union Pacific Corp. (3.62% in All American Equity Fund, 0.00% in Holmes Macro Trends Fund), Lam Research Corp. (2.60% in All American Equity Fund, 0.00% in Holmes Macro Trends Fund), The Goodyear Tire & Rubber Co. (2.07% in All American Equity Fund, 0.00% in Holmes Macro Trends Fund), AbbVie Inc. (1.54% in All American Equity Fund, 2.59% in Holmes Macro Trends Fund), CMS Energy Corp. (0.00% in All American Equity Fund and Holmes Macro Trends Fund), Versum Materials Inc. (0.00% in All American Equity Fund, 4.91% in Holmes Macro Trends Fund), Tegna Inc. (0.00% in All American Equity Fund and Holmes Macro Trends Fund), Avis Budget Group Inc. (0.00% in All American Equity Fund, 3.74% in Holmes Macro Trends Fund), Corcept Therapeutics Inc. (0.00% in All American Equity Fund, 1.40% in Holmes Macro Trends Fund), NutriSystem Inc. (0.00% in All American Equity Fund and Holmes Macro Trends Fund), United Parcel Service Inc. (0.00% in All American Equity Fund and Holmes Macro Trends Fund), Amazon.com Inc. (0.00% in All American Equity Fund and Holmes Macro Trends Fund). 

 

Net Asset Value
as of 05/20/2019

Global Resources Fund PSPFX $4.32 -0.01 Gold and Precious Metals Fund USERX $6.59 -0.02 World Precious Minerals Fund UNWPX $2.51 No Change China Region Fund USCOX $7.95 -0.12 Emerging Europe Fund EUROX $6.45 No Change All American Equity Fund GBTFX $24.23 -0.12 Holmes Macro Trends Fund MEGAX $16.51 -0.11 Near-Term Tax Free Fund NEARX $2.21 No Change U.S. Government Securities Ultra-Short Bond Fund UGSDX $2.00 No Change