Fourth Quarter 2016

The All American Equity Fund appreciated 1.67 percent for the quarter, underperforming the S&P 500 Index, which returned 3.82 percent for the same period. 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 fund's allocations to industrials, energy and financials were the best contributors to the fund's performance.
  • Having a lower weight in health care helped the fund's overall performance since the sector was one of the worst performers.
  • The strongest contributors to the fund were Delta Air Lines, Darden Restaurants and Travelers Companies.

Weaknesses

  • Lower investment weights in financials, the best performing sector for the quarter, seemed to be a headwind for the fund.
  • Stock selection in consumer discretionary, financials and cash were a drag on performance.
  • Investments in Tractor Supply Company, Kroger and Universal Health Services negatively impacted the fund as they were the weakest contributors to return.

Opportunities

  • Warren Buffett is loading up on airlines. Financial reports showed Buffett's Berkshire Hathaway amassed holdings in American Airlines, Delta Air Lines and United Continental.
  • Donald Trump says he will roll back regulations on banks and other businesses. That would be a boon for bank stocks.
  • As for share buybacks, U.S. companies are still planning on keeping the current pace of buybacks for 2017.

Threats

  • Cyclically-oriented U.S. equities have surged on the back of the Trump victory. However, BCA cautions that it is premature to position portfolios aggressively for a pro-growth global outlook.
  • U.S. dollar strength, weakening emerging market demand and declining capital expenditures have prompted BCA's U.S. equity strategists to move industrials to its high-conviction underweight list.
  • Prior to the most recent incident, a 50-basis point rise in the JP Morgan Global Government Bond Yield over three months has occurred only eight times this century. On three out of the eight occasions, world equities rose modestly, but on the other five they fell. On all eight occasions, the equity market's subsequent three-month performance consistently deteriorated on average by  negative 7 percent, compared to the preceding three-month performance. For reference, the recent three-month performance is just 0.7 percent.

The S&P 500 Stock Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies.

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 12/31/2016: Delta Air Lines Inc. 3.17%, Darden Restaurants Inc. 0.00%, The Travelers Cos. Inc. 3.10%, Tractor Supply Co. 0.00%, Kroger Co. 0.00%, Universal Health Services Inc. 0.00%, American Airlines Group Inc. 0.00%, United Continental Holdings Inc. 0.00%, Berkshire Hathaway Inc. 0.00%.

Net Asset Value
as of 03/29/2017

Global Resources Fund PSPFX $5.47 0.03 Gold and Precious Metals Fund USERX $7.63 0.04 World Precious Minerals Fund UNWPX $6.63 0.06 China Region Fund USCOX $8.49 -0.07 Emerging Europe Fund EUROX $6.18 0.01 All American Equity Fund GBTFX $24.45 -0.02 Holmes Macro Trends Fund MEGAX $18.99 0.01 Near-Term Tax Free Fund NEARX $2.22 No Change U.S. Government Securities Ultra-Short Bond Fund UGSDX $2.00 No Change