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Third Quarter 2014

The Global Resources Fund posted a loss of 13.03 percent in the third quarter as global growth concerns gained momentum.  The fund also lagged its benchmark, the S&P Global Natural Resources Index, by 515 basis points due to large-cap outperformance and weakness in upstream energy producers.  In the July to September period, oil refining, major mining, agricultural products and packaging stocks outperformed the index. Underperformance of the index, on the other hand, was led by precious metals, oil and gas, fertilizer and chemical stocks. See complete fund performance here.


  • The fund’s underweight position in fertilizers and chemicals as well as integrated oil and gas stocks had a positive contribution to performance relative to the benchmark this quarter.
  • Superior stock selection for oil refining stocks also had a positive contribution to the fund relative to the benchmark.
  • Positive fund contributors in the quarter included YPF S.A.-Sponsored ADR, United States Steel, Cal-Maine Foods Inc., Dundee Sustainable Technologies and Union Pacific Corp.


  • The fund’s overweight position in oil and gas stocks, as well as underweight position in major mining, agricultural products and packaging stocks had a negative contribution to performance relative to the benchmark this quarter.
  • Poor stock selection for base metals stocks had a negative contribution to the fund relative to the benchmark.
  • Negative issues during the third quarter included Sable Mining Ltd, Fortescue Metals Group, Petro-America Corp, Hi-Crush Partners LP and Valero Energy Corp.


  • The Federal Reserve cited the global growth slowdown as its reason to most likely hold off on raising interest rates in the near future. The effect of this announcement was a sharp decrease in the dollar, which has been creating significant headwinds for global commodity stocks since its recent strong and sudden rise. The retreat of the dollar should cause a significant rally in global resources.
  • Suncor Energy is looking to move crude oil across the Atlantic Ocean in an effort to seek buyers outside of North America. The oil producer reportedly loaded its first eastward-bound tanker of heavy crude last month.
  • It appears we have reached the bottom for oil prices. The good news stems from Saudi Arabia’s intervention in global markets to curb supply. Saudi Arabia recently cut production in August by 408,000 barrels per day, which is more than China’s demand is expected to increase. This rebalancing should prop oil prices up moving into 2015.


  • A counter to the first opportunity is the very real threat that the dollar hovers at its current level for an extended time. A consolidation of the dollar would mean prolonged headwinds for commodities. However, given how stretched the dollar has become and the Federal Reserve’s recent minutes, it is unlikely the dollar remains near its current level.
  • Despite positive economic data from the United States, markets remain concerned over slower growth in Europe and China. Any real or perceived threat to global growth, regardless of a strengthening U.S. economy, remains a threat to commodities, especially to industrial metals.

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 09/30/2014: Cal-Main Foods Inc. 0.77%, Dundee Sustainable Technologies Inc. 0.23%, Fortescue Metals Group Ltd 1.68%, Hi-Crush Partners LP 1.25%, Petro-America Oil Corp. 1.03%, Sable Mining Africa Ltd 0.25%, Suncor Energy Inc. 2.13%, Union Pacific Corp. 1.73%, United States Steel Corp. 0.95%, Valero Energy Corp. 2.01%, YPF SA 1.60%.

Net Asset Value
as of 10/24/2014

Global Resources Fund PSPFX $8.41 -0.04 Gold and Precious Metals Fund USERX $6.05 -0.07 World Precious Minerals Fund UNWPX $5.45 -0.04 China Region Fund USCOX $7.87 No Change Emerging Europe Fund EUROX $7.42 0.03 All American Equity Fund GBTFX $32.43 0.21 Holmes Macro Trends Fund MEGAX $23.01 0.08 Near-Term Tax Free Fund NEARX $2.26 No Change U.S. Government Securities Ultra-Short Bond Fund UGSDX $2.01 No Change