First Quarter 2019

During the first quarter, the Emerging Europe Fund gained 7.77 percent, while its benchmark, the MSCI Emerging Europe 10/40 Index, appreciated 6.65 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.

Greek and Russian equities outperformed the MSCI Emerging Europe Index, while Czech, Hungarian, Polish and Turkish equities underperformed. On a sector basis, telecommunication services, materials, consumer discretionary, financials and energy outperformed, while information technology, real estate, utility, health care and industrials underperformed.


  • The fund’s stock selection in Russia and Poland had the largest positive contribution to the fund’s performance in the first quarter.
  • The fund’s stock selection in financials and energy had the largest positive contributions to the fund’s performance.
  • Lukoil PJSC, a Russian oil producer, made the largest single contribution to the performance of the fund.


  • The fund’s overweight cash position had the largest negative contribution to the fund’s performance in the first quarter.
  • The fund’s stock selection in consumer discretionary had the largest negative contribution to the fund’s performance.
  • Polski Koncern Naftowy (PKN), a Polish oil refiner, was the greatest absolute detractor to the fund’s performance during the quarter.


  • European stock performance is near a historic low versus global shares. Stocks in Europe have rebounded this year in line with their U.S. counterparts, but they still trade near 2013 lows and have further potential to climb higher.
  • The Greek government successfully issued 10-year bonds. This was the first such issuance in almost a decade. Ratings agency Moody’s upgraded Greece two notches to B1 from B3, still below the investment grade but with positive outlook. Moody’s rated the new household bankruptcy law as a credit positive event for Greek banks. Wood & Company recommends staying long Greek banks.
  • Poland’s ruling party announced generous stimulus measures ahead of the scheduled general elections in the fall. The amount to be spent is estimated at 40 billion zloty ($10.5 billion) on family subsidies and pension raises. In addition, income taxes will be cut for workers under 26, and extra money will be spent on transportation infrastructure. Additional social spending should strengthen consumer confidence and boost economic growth.


  • Turkey has entered a recession after recording two consecutive quarters of economic contraction. President Erdogan has led Turkey through 18 years of continued growth, but much of it was achieved by unrestrained borrowing. Erdogan and his ruling AKP party suffered huge losses, according to unofficial results from the municipal election held in late March. TD Securities, the Toronto-based investment house, predicts another crisis in the Turkish lira. Analysts expect a 40 percent drop against the dollar by the third quarter of 2019.
  • The European Central Bank (ECB) lowered the eurozone’s growth forecast for 2019, from 1.7 percent to 1.1 percent, citing weakness in Italy and uncertainty surrounding Brexit. To help the economy, the ECB announced that it will launch another stimulus plan. A new series of quarterly longer-term refinancing operations will be launched, starting in September 2019 and ending in March 2021.
  • There is a lot of uncertainty around Brexit. The deadline for the United Kingdom to leave the European Union (EU) has now been extended to October 31, 2019.

The MSCI Emerging Markets Europe 10/40 Index is a free float-adjusted market capitalization index that is designed to measure equity performance in the emerging market countries of Europe (Czech Republic, Greece, Hungary, Poland, Russia and Turkey). The index is calculated on a net return basis (i.e., reflects the minimum possible dividend reinvestment after deduction of the maximum rate withholding tax). The index is periodically rebalanced relative to the constituents' weights in the parent index.

A bond’s credit quality is determined by private independent rating agencies such as Standard & Poor’s, Moody’s and Fitch. Credit quality designations range from high (AAA to AA) to medium (A to BBB) to low (BB, B, CCC, CC to C).

Holdings may change daily. Holdings are reported as of the most recent quarter-end. Holdings are reported as of the most recent quarter-end. Holdings in the Emerging Europe Fund as a percentage of net assets as of 3/31/2019: Lukoil PJSC (10.50%), Polski Koncern Naftowy ORLEN SA (0.98%).

Net Asset Value
as of 07/15/2019

Global Resources Fund PSPFX $4.62 0.01 Gold and Precious Metals Fund USERX $8.27 0.07 World Precious Minerals Fund UNWPX $2.93 0.03 China Region Fund USCOX $8.99 0.03 Emerging Europe Fund EUROX $7.16 -0.01 All American Equity Fund GBTFX $24.82 -0.07 Holmes Macro Trends Fund MEGAX $17.06 No Change Near-Term Tax Free Fund NEARX $2.22 No Change U.S. Government Securities Ultra-Short Bond Fund UGSDX $2.00 No Change