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February 2015

The China Region Fund gained 1.47 percent in February, approximately in line with its benchmark, the Hang Seng Composite Index, which advanced 1.49 percent. See complete fund performance here.


  • Investments in Hong Kong turned out most successful, as China confirmed its policy easing cycle by cutting the bank reserve ratio for the first time since 2012 and lowering interest rates again in less than three months. In addition, the decision to underweight U.K.-domiciled, benchmark-heavyweight HSBC Holdings worked in the fund's favor just as it did in the fourth quarter.   
  • Stock selection in financials and consumer goods proved most positive to fund performance. Bellwether Chinese insurers resumed their outperformance, and select health care and automobile names shined.
  • China Life Insurance Co. Ltd., the largest provider of life insurance and annuity products in China, was the top dollar contributor with an 8.63-percent gain during the month.


  • Industrials finished the largest detractor from fund performance, ranging from specific company disappointments in the earnings season and profit taking in distinct outperformers in the fourth quarter.     
  • Select Chinese industrial and technology American depositary receipts (ADRs), as well as state-owned power producers, sold off in February on either disappointing quarterly result announcements or adverse industry-wide pricing policy.  
  • Hollysys Automation Technologies Ltd., a leading manufacturer of industrial automation systems in China, was the worst dollar contributor with a 24.96 percent decline for the month.  


  • China's commitment, reiterated during the National People's Congress, to the "One Belt, One Road" strategy should help export the country's domestic industrial overcapacity and counter slower growth at home and throughout the developed world. By investing in overseas infrastructure and boosting external trades with emerging markets in Asia, Eastern Europe and North Africa, this strategy could potentially benefit 55 percent of the global population and 23 percent of global GDP.
  • Indonesian central bank's much earlier-than-expected interest rate cut, shortly after the release of a more investment-focused fiscal budget, signaled the government's pro-growth policy stance and should bode well for interest rate-sensitive sectors such as financials and property.
  • Improving U.S. labor market conditions and ongoing corporate focus on cost reduction should continue to benefit Philippines' overseas worker remittance and its booming local call center business. Philippine's consumer-related and property sectors should remain major winners as a result.


  • Unexpectedly weak Macau gaming revenue trends during the week-long Chinese New Year holidays and press reports of potentially tighter visa restrictions against mainland Chinese citizens should only reduce the probability of any positive catalyst in the near-term for the city's casino operators and, therefore, weigh on their performance.
  • Tremendous popularity of the online environmental documentary, Under the Dome, self-funded by a former investigative journalist in China, should aggravate investor sentiment on heavy polluters in coal, cement and steel industries.  
  • The European Central Bank's official launch of its quantitative easing program might reinforce depreciation of the euro in the medium term and, therefore, negatively affect Asian companies with significant unhedged revenue exposure from Europe.

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 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.

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 12/31/2014: HSBC Holdings PLC 0.00%; China Life Insurance Co., Ltd. 4.61%; Hollysys Automation Technologies, Ltd. 0.53%.

Net Asset Value
as of 04/24/2015

Global Resources Fund PSPFX $6.07 0.03 Gold and Precious Metals Fund USERX $5.62 -0.03 World Precious Minerals Fund UNWPX $4.65 -0.06 China Region Fund USCOX $9.95 No Change Emerging Europe Fund EUROX $6.85 0.04 All American Equity Fund GBTFX $28.60 -0.01 Holmes Macro Trends Fund MEGAX $21.10 -0.06 Near-Term Tax Free Fund NEARX $2.25 No Change China Region Fund USCOX $9.95 No Change