Second Quarter 2020

**On July 1, 2020, the Holmes Macro Trends Fund (MEGAX) changed its name and investment strategy to the Global Luxury Goods Fund (USLUX).

The Holmes Macro Trends Fund had a total return of 21.00 percent in the second quarter of 2020, outperforming its benchmark, the S&P 1500 Index, which returned 20.77 percent. See complete fund performance here. See complete fund performance here.

U.S. stocks wrapped up their best quarter in more than 20 years, a remarkable rally after the coronavirus pandemic brought business around the world to a virtual standstill. Just three months ago, investors were lamenting the end of the bull market—and the longest economic expansion on record—after major U.S. stock indices lost about 35 percent of their value in less than six weeks. The subsequent rebound has been nearly as frenzied. Partly thanks to an unprecedented $1.6 trillion stimulus package from the Federal Reserve and Congress, and a surge in trading among individual investors, the rally has lifted everything from beaten-down energy stocks to apparel retailers to big technology firms. The S&P 500 finished the second quarter up 20.54 percent, its biggest percentage gain since the last three months of 1998. The market's rally has slowed lately as a resurgence in coronavirus cases in some parts of the U.S. and civil unrest sparked by the killing of George Floyd, a black man in police custody, have dented sentiment. After logging its biggest two-month percentage gain since 2009 in April and May, the S&P 500 rose just 1.8 percent in June. The Holmes Macro Trends Fund showed robust performance during the quarter, as a combination of adept sector allocation and stock selection helped the fund slightly outpace its benchmark.

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 fund’s allocations to consumer discretionary, health care and financials contributed the most to performance. The consumer discretionary and financial sectors rebounded strongly as the economy began reopening, while the health care sector continued to benefit from the hopes of a successful vaccine.
  • The fund’s stock selection in the consumer discretionary and health care sectors proved skillful, evidenced by the strong contribution to performance.
  • Investments in Home Depot, Crocs and LGI Homes were among the best contributors to fund performance.


  • The fund’s allocation to information technology was the largest drag on performance due to the fund’s allocation model underweighting the sector.
  • The fund’s stock selection in the information technology and communication services sectors showed poor performance, failing to produce satisfactory results.
  • Investments in Lendified Holdings and WD-40 Company were the greatest detractors to the fund’s performance.


Aggressive efforts by the Fed to stabilize credit markets and a massive aid package from Congress that included enhanced unemployment insurance and loans to struggling businesses has propelled the stock market's recovery at an unprecedented speed. Nonetheless, there's a perceived disconnect between what the market has done and the economic recovery. The path ahead for the stock market lacks clarity, especially with the November presidential election now coming into view. A Democratic sweep of the White House and Congress looms as a potential risk in the months ahead. Analysts say a Democratic-controlled government would likely roll back the tax cuts Congress enacted in 2017, constraining corporate profit margins. The economic picture also remains bleak. Nearly 20 million jobs have been shed since February, and retail sales are far below pre-pandemic levels. Manufacturing activity in the U.S. has also contracted, albeit at a more gradual rate. As a result, the second half of the year may see a lot of choppiness.

Predicting how the stock market will fare in the months ahead has never been simple, but the economic crisis wrought by coronavirus has rewritten the traditional investing playbook. Given the economic and virus outlook, stocks could be stuck in a relatively narrow trading range through the end of the year unless there is a breakthrough on a coronavirus treatment. A second wave of coronavirus cases was cited as the most prominent risk facing stocks for a fourth consecutive month, according to a survey of 190 fund managers by Bank of America in June. Permanently high unemployment and a Democratic sweep of the election followed. COVID is likely going to outweigh the presidential election at least until October unless there's some sort of shock between now and then, such as the possibility that former Vice President Joe Biden or President Donald Trump release policy proposals that roil the health care or financial services sectors.

The stock market's performance in the months ahead of the election could have a big impact on the outcome of the race. Data going back to 1928 show the incumbent party has won the election 87 percent of the time if the S&P 500 is positive over the three months ahead of the election and lost it when it is negative, according to research from Strategas Securities. Analysts predict earnings among companies in the S&P 500 will contract nearly 22 percent this year, according to FactSet, before beginning to rebound next year. That's a stark reversal from consensus at the beginning of the year for 9.2 percent growth. Furthermore, Wall Street banks have revised their targets several times this year to reflect the rapidly changing outlook. Bank of America's analysts recently put a 2900 year-end price target on the S&P 500, abandoning previous calls of 2600 and 3100 from earlier points in the year. That target suggests the stock market has topped out this year and will fall 6.5 percent by December. Others have abandoned their forecasts altogether in light of the uncertainty.


The S&P Global Luxury Index is comprised of 80 of the largest publicly-traded companies engaged in the production or distribution of luxury goods or the provision of luxury services that meet specific investibility requirements.

The S&P 1500 Composite Index is a broad-based capitalization-weighted index of 1500 U.S. companies and is comprised of the S&P 400, S&P 500, and the S&P 600. The index was developed with a base value of 100 as of December 30, 1994. The S&P 500 Stock Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies. It is not possible to invest in an index.

Fund portfolios are actively managed, and holdings may change daily. Holdings are reported as of the most recent quarter-end and should not be considered a recommendation to buy or sell any security. Holdings in the Holmes Macro Trends Fund as a percentage of net assets as of 6/30/2020: The Home Depot Inc. 5.67%, Crocs Inc. 1.48%, LGI Homes Inc. 1.36%, Lendified Holdings Inc. 0.00%, WD-40 Co. 3.16%.

Net Asset Value
as of 08/07/2020

Global Resources Fund PSPFX $4.89 -0.05 Gold and Precious Metals Fund USERX $14.15 -0.47 World Precious Minerals Fund UNWPX $5.29 -0.06 China Region Fund USCOX $9.29 -0.14 Emerging Europe Fund EUROX $5.79 -0.07 All American Equity Fund GBTFX $23.76 -0.08 Global Luxury Goods Fund USLUX $16.48 -0.20 Near-Term Tax Free Fund NEARX $2.26 No Change U.S. Government Securities Ultra-Short Bond Fund UGSDX $2.00 No Change