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January 2015

The Global Resources Fund posted a loss of 5.55 percent in January as the broader market outside of commodities declined 3.00 percent. Fund performance in the period also trailed the large-cap weighted S&P Global Natural Resources Index by 291 basis points. See complete fund performance here.

Strengths

  • The fund’s overweight position in precious metals and underweight position in major mining had the largest positive contribution to fund performance last month.
  • The fund’s superior stock selection in base metals had a positive contribution to the fund as well.
  • The best-performing holding over the month of January was Gran Colombia Gold Corp.

Weaknesses

  • The fund’s overweight in oil and gas explorers and producers, as well as an underweight in fertilizers and chemicals, had a negative effect on the fund’s performance last month.
  • The fund’s stock selection in forest and paper contributed to the fund’s underperformance last month.
  • The worst-performing holding in the month of January was Atlas Development & Support Services.

Opportunities

  • After a 700,000-barrels-per-day (kbpd) oil supply surplus in 2014, analysts are forecasting a narrowing of oversupply moving forward. If a peak did occur, supply and demand dynamics could restore balance to oil prices.
  • The official announcement from the European Central Bank (ECB) of its quantitative easing program has lifted markets globally. Hopefully the success of the program will revive growth in the eurozone, thereby boosting demand for commodities.
  • The U.S. oil rig count has begun to decline sharply alongside falling oil prices. Typically, such a steep decline is soon followed by a healthy rebound in oil prices.

U.S. Oil Rig Count Declining with Oil Prices
Threats

  • High leverage in the oil and gas industry is surfacing as a potential catalyst for a wider shock to the energy space. Over-leveraging has become an even greater risk, given the decline in profits expected to accompany the slump in oil prices.
  • Industry consensus expects copper to remain oversupplied as China’s growth slows. Given recent property data, the surplus could worsen rapidly in the first half of 2015. As of the week ending January 18, weekly property sales in China continued to decline 6 percent year-over-year, sustaining the weak environment for copper.

Past performance does not guarantee future results.

The S&P Global Natural Resources Index includes 90 of the largest publicly-traded companies in natural resources and commodities businesses that meet specific investability requirements, offering investors diversified, liquid and investable equity exposure across 3 primary commodity-related sectors: Agribusiness, Energy, and Metals & Mining.

Fund portfolios are actively managed, and holdings may change daily. Holdings are reported as of the most recent quarter-end. Holdings in the Global Resources Fund as a percentage of net assets as of 12/31/2014: Gran Colombia Gold Corp. 1.68%, Atlas Development & Support Services 5.43%.

Net Asset Value
as of 02/27/2015

Global Resources Fund PSPFX $6.28 -0.01 Gold and Precious Metals Fund USERX $5.78 0.08 World Precious Minerals Fund UNWPX $4.93 0.06 China Region Fund USCOX $8.31 -0.02 Emerging Europe Fund EUROX $6.52 -0.04 All American Equity Fund GBTFX $28.63 -0.02 Holmes Macro Trends Fund MEGAX $20.78 -0.17 Near-Term Tax Free Fund NEARX $2.25 -0.01 China Region Fund USCOX $8.31 -0.02