First Quarter 2017

For the first quarter of 2017, the China Region Fund returned 15.44 percent, outperforming its benchmark, the Hang Seng Composite Index, which returned 10.73 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.


  • The top three single contributors to the China Region Fund's performance for the first quarter of 2017 were automaker Geely Automobile (175 HK), optics hardware producer Sunny Optical Technology (2382 HK), and electronics components producer BYD Electronic International (285 HK), which rose by 60.59 percent, 67.30 percent, and 77.05 percent, respectively. The collective outperformance attributed to these strong performers very nearly constitutes the entirety of the difference between the fund and the benchmark.
  • The top-performing sector allocation for the fund was consumer goods, which includes the auto industry and thus stocks like the aforementioned Geely, as well as Guangzhou Automobile (2238 HK) and Nexteer Automotive (1316 HK), both of which also performed relatively well in the first quarter.
  • Stock selection, rather than allocation, within the benchmark domicile of Hong Kong proved to be the fund's top geographical contributor for the quarter. Allocations to Malaysia and Taiwan also proved useful.


  • Thailand, on the other hand, constituted the weakest-performing country allocation for the fund during the first quarter period.
  • The worst-performing sector for the China Region Fund within the first quarter of 2017 was utilities.
  • The largest relative detractors from the fund in the first quarter from a single stock perspective were ANTA Sports Products (2020 HK), which declined 7.13 percent overall in the quarter, China Longyuan Power (916 HK), which fell 0.33 percent for the quarter, and the fund's relative underweight position in tech giant Tencent (700 HK), which rose 17.45 percent in the quarter. The fund's roughly 6 percent cash position against a rising Hang Seng Composite Index (HSCI) also detracted from relative performance.


  • China's first quarter GDP came in at the expectation-beating pace of 6.9 percent, well ahead of the 6.5 percent upper level growth rate with which China's Xi Jinping's stated he could be "comfortable." As FX reserve levels and the Chinese yuan have stabilized, China appears much steadier than it did a few months ago.
  • Though newly-inaugurated U.S. President Donald Trump quickly threw foreign policy experts for a loop after expressing ambiguity about the U.S.'s longstanding "One China" policy with respect to Taiwan, Trump did eventually reaffirm the U.S. status quo, quelling any market fears over potential trade war fallout. So too the president reneged on his campaign promise to brand China a "currency manipulator," thus easing another policy tension and the potential for a trade war. Trump argued that since being elected, China has apparently refrained from currency manipulation.
  • Last quarter's impeachment of now-former President Park Guen-hye of South Korea came to a head in March when Park was formally ousted (after a Constitutional Court unanimously upheld impeachment) and eventually placed under arrest. Upcoming elections may prove something of a political reset, and after the ouster, the Korea Stock Price Index (KOSPI) soared to new 52-week highs.


  • First quarter China passenger-vehicle deliveries fell for the first time in at least 17 years as higher sales taxes and a consumer boycott on South Korean automobiles hit sales numbers. (Some Chinese resent South Korea's participation in the Terminal High Altitude Area Defense, or THAAD, missile program.)
  • Efforts to curb housing price appreciation in China have been somewhat ineffective, exacerbating risks of an overheated market while simultaneously driving would-be borrowers to shadow banking or alternative financing methods.
  • A Bloomberg Intelligence report highlights the possibility that Thailand could run the risk of being added to the U.S. watch list for currency manipulation--a possibility that may effectively restrict Thai efforts to curb appreciation of the baht. The Trump administration hopes for more "reciprocity" in trade, and in a country by country analysis, Thailand may stand out: it has a bilateral trade surplus of about $19 billion--just below the 20 billion threshold that counts as a strike (two strikes lands a country on the watch list; three strikes demands the label of "currency manipulator"); Thailand has also, with Vietnam, made persistent, net FX purchases (a strike); and, while Thailand does not currently run a current-account surplus of larger than 3 percent of GDP, it could, the article reports, by boosting its net exports to the U.S. by a mere 6 percent this year.

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 Korea Stock Price Index (KOSPI) is a capitalization-weighted index of all common shares and preferred shares on the Korean Stock Exchanges.

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 3/31/2017: ANTA Sports Products 2.36%, BYD Electronic International 2.97%, China Longyuan Power 0.00%, Geely Automobile 7.00%, Guangzhou Automobile 4.65%, Nexteer Automotive 2.15%, Sunny Optical Technology 6.06%, Tencent 5.47%.

Net Asset Value
as of 07/26/2017

Global Resources Fund PSPFX $5.70 0.03 Gold and Precious Metals Fund USERX $7.20 0.13 World Precious Minerals Fund UNWPX $6.52 0.15 China Region Fund USCOX $10.09 -0.06 Emerging Europe Fund EUROX $6.68 0.08 All American Equity Fund GBTFX $24.60 -0.04 Holmes Macro Trends Fund MEGAX $20.10 -0.12 Near-Term Tax Free Fund NEARX $2.23 No Change U.S. Government Securities Ultra-Short Bond Fund UGSDX $2.00 No Change