February 2016

The China Region Fund declined 2.41 percent in January 2016, very slightly underperforming its benchmark, the Hang Seng Composite Index, which fell by 2.40 percent during the same period. See complete fund performance here.


  • The China Region Fund's underweight allocation to and selection within financials aided performance.
  • International diversification helped the fund, particularly fund exposure to Taiwan, Indonesia and the Philippines.
  • Stock selection within the telecommunications sector also proved quite useful. SmarTone Telecommunications Holdings and PCCW rose 9.21 and 6.47 percent respectively in February. Those two telecom companies, together with information technology sector and electrical components producer AAC Technologies Holdings, constituted the three top performing equities in the fund for February. AAC Technologies rose 8.99 percent in that period.


  • Higher cash levels created some drag in fund performance for February after the market began stabilizing.
  • In terms of sectors, selected exposure within properties and construction hurt the fund's relative performance most.
  • The fund's worst-performing equity for February was renewable energy equipment maker Xinjiang Goldwind Science and Technology, which fell 16.90 percent.


  • Chinese data have not reflected the maximum bearishness of some investors at the close of 2015 and early 2016. In fact, credit growth in China for the January period soared to new record highs, encouraging investors still somewhat concerned about the Chinese economy. New loans rose to 2.51 trillion yuan, handily beating expectations of 1.9 trillion, and aggregate financing also rose to new highs, coming in at 3.42 trillion yuan and surpassing expectations of 2.2 trillion yuan. The Lunar New Year holidays across the region may also have helped to provide some respite to the negative sentiment of the early weeks of 2016. Not only did the People's Bank of China (PBOC) manage liquidity into and out of the holiday period, but it has now stated that going forward, monetary policy will move to a "slight easing bias." At the recent G20 summit in Shanghai, Chinese leaders also reassured global investors that no largescale surprise devaluation of the yuan will be forthcoming in the near future, and in the final day of the month, the PBOC lowered the reserve requirement ratio (RRR) for large banks to 17.0 percent from 17.5 percent, which is a form of stimulus and a surprise about-face from previous PBOC guidance earlier in the year. The National People's Congress will in all likelihood provide some further clarification on directions about forthcoming Chinese economic policy and the pace of reform.
  • Easing cycles throughout the region may help underpin growth and further stabilize markets and sentiment.
  • Indonesia had a strong February, outperforming many of its peers in the region on more than one front. The island-nation's rupiah performed well for the month, rising about 2.5 percent. The Jakarta Stock Price Index ascended 3.39 percent to multi-month highs during the same period, and the country had a better-than-expected Q4 GDP print.


  • Capital outflow remains a major concern for investors in Chinese markets, and while February FX reserves revealed declines in line with market expectations, March and other future FX reserve data are expected to be monitored very carefully as gauges for the scope of outflows.
  • Markets look for clarification and policy certainty, which Chinese leaders are now attempting to provide, but either failure or perceived failure to deliver progress may exacerbate the bearish sentiment and concerns of early 2016.
  • The Indonesian central bank lowered its overnight to one-year monetary operations rates, a move designed to spur credit growth but which also comes at the expense of net interest margins for Indonesian banks.

Performance data quoted above is historical. Past performance is no guarantee of future results. Results reflect the reinvestment of dividends and other earnings. For a portion of periods, the fund had expense limitations, without which returns would have been lower. 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. Performance does not include the effect of any direct fees described in the fund's prospectus (e.g., short-term trading fees of 0.05%) which, if applicable, would lower your total returns. Performance quoted for periods of one year or less is cumulative and not annualized. Obtain performance data current to the most recent month-end here or by calling 1-800-US-FUNDS.

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 Jakarta Stock Price Index is a modified capitalization-weighted index of all stocks listed on the regular board of the Indonesia Stock Exchange. The index was developed with a base index value of 100 as of August 10, 1982.

Fund portfolios are actively managed, and holdings may change daily. Holdings are reported as of the most recent quarter-end. Holdings in the China Region Fund as a percentage of net assets as of 12/31/2015: SmarTone Telecommunications Holdings Ltd. 2.45%, PCCW Ltd. 0.00%, Aac Technologies Holdings Inc. 0.00%, Xinjiang Goldwind Science & Technology Co. Ltd. 0.11%.

Net Asset Value
as of 04/29/2016

Global Resources Fund PSPFX $5.28 0.04 Gold and Precious Metals Fund USERX $8.49 0.45 World Precious Minerals Fund UNWPX $6.70 0.29 China Region Fund USCOX $7.05 -0.06 Emerging Europe Fund EUROX $5.86 0.01 All American Equity Fund GBTFX $23.73 -0.11 Holmes Macro Trends Fund MEGAX $17.67 -0.01 Near-Term Tax Free Fund NEARX $2.25 -0.01 U.S. Government Securities Ultra-Short Bond Fund UGSDX $2.01 No Change