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November 2014

The China Region Fund gained 1.72 percent in November, outperforming its benchmark Hang Seng Composite Index which rose 0.80 percent. See complete fund performance here.


  • Country allocation to investments in China and Hong Kong stocks remained the top contributor to fund performance against the benchmark. The market was pleasantly surprised by China’s first interest rate cut since 2012.  
  • Stock selection in industrials and an underweight position in energy was the most positive contributor to fund performance. Select industrial companies benefiting from government policy support rose during the month while energy equities continued to sell off globally on lower oil prices.
  • China Aircraft Leasing Group, the largest independent commercial aircraft lessor in China, was the top dollar contributor to the fund with a 70.63 percent gain during the month.


  • In terms of industries, construction and technology were the largest detractors from fund performance.  Falling energy prices hurt sentiment in alternative energy installers and investors started rotating out of technology names post earnings season.    
  • Stock selection in South Korea along with Chinese education American depository receipts (ADRs) made a negative contribution to relative fund performance.
  • China Singyes Solar Technologies, a leading solar rooftop installer in China, was the worst dollar contributor with a 12.11 percent decline for the month.  


  • China’s first interest rate cut since mid-2012 could be a tipping point, introducing the potential for more monetary easing given lukewarm order flows from the Shanghai-Hong Kong market linkage along with disappointing macroeconomic data to date.  The spectacular rally in Chinese A-shares comes in response to the rate cut and may have marked the start of a re-rating for Chinese brokers and insurers.  
  • Lower financing costs in China also bode well for Chinese banks’ asset quality and alleviate debt burden for highly leveraged state-owned companies, particularly power utilities.
  • China’s promotion of ground and marine transport links with the rest of Asia, the Middle East, Europe and Africa, as well as its offer to fund overseas infrastructure projects, should help sustain positive market sentiment for state-owned construction companies, especially for railroads.


  • Unexpected shrinkage of Malaysia’s trade surplus should remind investors that the country remains most vulnerable among its Asian peers. This is due to falling crude oil prices Malaysia’s status as a net oil exporter.
  • Speculation of intervention by Bank of Korea to weaken the South Korean won, following Bank of Japan’s aggressive yen-weakening measures at the end of October, remains heavy on the South Korean currency against the U.S. dollar, challenging won-denominated assets.
  • Renewed deterioration of eurozone economies and continuing depreciation of the euro since July may negatively affect Asian companies with significant revenue exposure from Europe. 

Past performance does not guarantee future results.

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 Shanghai A-Share Stock Price Index is a capitalization-weighted index. The index tracks the daily price performance of all A-shares listed on the Shanghai Stock Exchange that are restricted to local investors and qualified institutional foreign investors. The index was developed with a base value of 100 on December 19, 1990.

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 09/30/2014: China Aircraft Leasing Group Holdings Ltd. 1.00%, China Singyes Solar Technologies Holdings Ltd. 0.56%.

Net Asset Value
as of 01/30/2015

Global Resources Fund PSPFX $6.30 -0.01 Gold and Precious Metals Fund USERX $5.91 0.14 World Precious Minerals Fund UNWPX $5.09 0.09 China Region Fund USCOX $8.19 -0.09 Emerging Europe Fund EUROX $6.27 -0.09 All American Equity Fund GBTFX $27.03 -0.31 Holmes Macro Trends Fund MEGAX $20.05 -0.27 Near-Term Tax Free Fund NEARX $2.26 -0.01 China Region Fund USCOX $8.19 -0.09