Second Quarter 2016

During the second quarter, the Global Resources Fund rose 1.19 percent, underperforming its benchmark, the S&P Global Natural Resources Index, which gained 6.76 percent. Weak performance was due in part to higher cash allocations and an overweight position in junior natural resource companies. See complete fund performance here.


  • The fund's overweight position and superior stock selection in the precious metals sector were the major positive contributors to the fund's performance.
  • The fund's underweight position and superior stocks selection in the base metal sector had a positive contribution to the fund relative to the benchmark this quarter.
  • Holdings that were among the fund's best contributors to performance included Klondex Mines, Endeavour Mining and Richmont Mines.


  • An overweight position in junior natural resource stocks and oil and gas refiners had the largest negative contribution to the fund this quarter.
  • The fund's relatively high cash holdings throughout the quarter had a negative contribution to the fund's performance.
  • Gran Colombia Gold, Tesoro and Valero Energy were among the fund's most significant laggards this quarter.


  • Global crude oil demand expectations may be understated. The International Energy Agency (IEA) revised its global demand forecast higher for crude oil this year. The agency now expects oil demand globally to grow by 1.3 million barrels per day in 2016, leading to the conclusion that oil market will reach a supply demand balance in the second half of 2016.
  • China, the world's top consumer of base metals, will boost its metal stockpiles according to a Bloomberg story. The nation will increase its reserves and study a program for companies to build stockpiles in addition to their inventories, resulting in a demand boost for base metals which have seen weak demand amid a global economic slowdown.
  • Precious metals' outperformance is set to continue. J.P. Morgan's commodities strategy team revised up its gold, silver and zinc prices and stated the outlook for precious metals remains bullish with zero and negative interest policy, and possibly more quantitative easing, on the horizon. Credit Suisse echoed J.P Morgan's bullish comments and raised its gold price target to $1,450 per ounce, as the market turns to "safe mode."


  • Oil prices could fall as China demand is set to fade. J.P. Morgan published a report highlighting the near-term China risks to the oil price as gasoline demand slows down and the Strategic Petroleum Reserve build nears maximum capacity. China may stop importing excess crude in September, leading to a 1.2 million barrel per day drop in imports. In addition, the current state of refined product inventories is leading "teapot" refineries--smaller, independently operated refineries-- to cut runs and slowdown their crude purchases abroad.
  • The divergent paths of gold and copper prices are reminiscent of a recession era. The spread between the prices of the two major commodities reached its highest since 2009, and displays similar characteristics to those seen during the global financial crisis, leading some market commentators to suggest we may be nearing a crisis event.
  • Negative sentiment in China is also becoming visible in the steel market, according to BMO analysts. The most widely used sentiment gauge has collapsed to a 16-month low, with most market participants expecting new steel orders and prices to weaken further over the next month, according to the latest Platts China Steel Sentiment Index (CSSI). The most recent June reading showed a headline of just 15.92 out of a possible 100 points, having dropped 31.06 points from May, and posting the weakest reading since February 2015.

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 by calling 1-800-US-FUNDS.

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. The monthly Platts China Steel Sentiment Index (CSSI) is based on a survey of approximately 50 to 75 China-based market participants including traders, stockists and steel mill operators. The survey of month-ahead sentiment is conducted during the last full working week of each month, with the results published via press release and Platts' products and services before the 10th of the next month. Platts began tracking steel sector sentiment in China in May 2013.

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 6/30/2016: Klondex Mines Ltd. 6.41%, Endeavour Mining Corp. 1.11%, Richmont Mines Inc. 1.36%, Gran Colombia Gold Corp. 10.15%, Tesoro Corp. 1.15%, Valero Energy Corp. 0.90%.

Net Asset Value
as of 10/27/2016

Global Resources Fund PSPFX $5.59 -0.06 Gold and Precious Metals Fund USERX $8.52 -0.22 World Precious Minerals Fund UNWPX $7.86 -0.23 China Region Fund USCOX $7.86 -0.08 Emerging Europe Fund EUROX $5.54 -0.02 All American Equity Fund GBTFX $22.65 -0.08 Holmes Macro Trends Fund MEGAX $18.17 -0.14 Near-Term Tax Free Fund NEARX $2.24 No Change U.S. Government Securities Ultra-Short Bond Fund UGSDX $2.00 No Change