Fourth Quarter 2019

The Global Resources Fund had a total return of 8.80 percent in the fourth quarter of 2019, slightly underperforming its benchmark, the S&P Global Natural Resources Index, which returned 9.55 percent. See complete fund performance here.

Oil was back on the rise in the fourth quarter and ended up 14.52 percent as the Organization of Petroleum Exporting Countries (OPEC) made cuts and the U.S.-China trade deal neared. Natural gas, on the other hand, took a big tumble, ending the quarter down 15.42 percent. Copper and precious metals were the better performers in the metals arena but zinc, lead, iron and nickel did poorly.

Although the fund underperformed the benchmark for the quarter, the fund did outperform for the month of December, returning 9.05 percent versus 5.98 percent for the S&P Global Natural Resources Index, as precious metals stocks climbed with gold.

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 three best performing commodities were palm oil, coffee and West Texas Intermediate (WTI) crude oil, up 32.30 percent, 23.88 percent and 14.52 percent, respectively. Palm oil has rallied on robust demand for biofuel from China and India. Investment options for palm oil via equities are limited. Coffee finished the quarter strong with Brazilian exports of coffee down 25.1 percent in December from the prior December. Crude oil made very strong gains over the quarter with the market anticipating some type of trade deal would be made with China to tap down uncertainty. The fund ran an average cash position of 4.01 percent.
  • The best sector performance, relative to the benchmark, came from underweight positions in integrated oil, underweight agriculture chemicals and overweight other metals/minerals. The fund’s underweight position in integrated oil companies, at 14.68 percent, gained 12.73 percent versus the benchmark weight at 24.41 percent, which gained only 5.29 percent. This contributed 150 basis points to the fund. With the fund’s underweighting of agriculture chemicals at 3.53 percent, versus the benchmark weight of 12.47 percent, it gained 99 basis points of relative performance. The fund’s average portfolio weighting in other metals/minerals was 15.76 percent, gaining 17.28 percent, versus the benchmark’s weighting of 11.98 percent with its holding rising only 13.02 percent. This yielded 74 basis points of outperformance. 
  • Nutrien, the world’s largest agriculture chemical company, was 6.81 percent of our benchmark.  We reduced its weight to just 0.90 percent in the fund, and with the stock declining 2.91 percent over trade, out underweight generated 78 basis point of outperformance relative to the benchmark. Not owning benchmark name Exxon Mobil, which is 6.37 percent of the index, up just 0.06 percent, contributing 61 basis points to the fund. Ivanhoe Mines, at 2.78 percent of the fund, was our best performer, gaining 26.14 percent with a net basis point pick up of 44.


  • The three worst performing commodities were nickel, natural gas and iron ore, down 18.98 percent, 15.42 percent and 12.30 percent, respectively. The fund has investments in the steel sector and little direct exposure to natural gas, but it was market-weight in MMC Norilsk Nickel, and the stock gained 27.91 percent, largely from its byproduct palladium production.
  • Our worst sector performance, relative to the benchmark, came from our underweight in pulp and paper, steel and containers/packaging. The fund had an average weighting in pulp and paper of just 1.10 percent versus the benchmark at 9.09 percent. The fund was underweight with the trade tariffs and choppy economic data, and our stock selection limited to two North American companies. However, European pulp and paper stocks gained about 20 percent for the quarter with the fund losing out on 110 basis points of relative performance. The fund’s average portfolio weighting in steel was 4.73 percent versus the benchmark at 10.00 percent. Our stock selection underperformed by 56 basis points. Again, European names outperformed.  For the containers/packaging sector, the fund had a weight of only 0.54 percent versus the benchmark at 8.48 percent and missed out on 50 basis points of performance.
  • Pacific Infrastructure Ventures was the worst performer, losing 111 basis points, largely on failing to make material progress on a sale of the port asset. Smurfit Kappa Group Plc, which the fund did not own in the container/packaging sector, gained 28.97 percent, leading to 36 basis points of underperformance. UPM-Kymmene Oyj, a 4.49 percent index constituent representing pulp and paper, gained 17.35 percent with the fund missing out on 33 basis points of performance.


Renewable energy, such as wind and solar, are cheaper than coal, and in some cases more competitive than natural gas, thus we are seeing some disruption of the current energy mix. Companies are increasingly moving toward environmentally-friendly initiatives not as the bequest of governments, but rather driven by shareholder demands that global warning cannot be ignored. Reinforcing the trend towards clean energy means demand for copper, nickel, lithium, cobalt and rare earth metals can have a future in supplying materials for energy storage.

While oil and natural gas are not going away, the prospects of a supply squeeze in 2020 seem buffered as supplies are plentiful; thus, higher prices are likely in check for now. The infrastructure spending plan that has been talked about in Congress will likely be resurrected with presidential elections coming in 2020. With tariffs still being a point of trade contention, capital allocation decisions are beginning to see pause as ISM Manufacturing declined to 47.2 by December, a low for the year, after spiking higher in October. The fund has a higher weighting in gold mining stocks relative to its benchmark, as central banks around the world are adding to their official reserves as debts rise.


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 ISM Manufacturing Index is a widely-watched indicator of recent U.S. economic activity. The index is often referred to as the Purchasing Manager's Index (PMI). Based on a survey of purchasing managers at more than 300 manufacturing firms by the Institute for Supply Management (ISM), the index monitors changes in production levels from month to month. The index is the core of the ISM Manufacturing Report. A basis point, or bp, is a common unit of measure for interest rates and other percentages in finance. One basis point is equal to 1/100th of 1%, or 0.01% (0.0001).

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 12/31/2019: Nutrien Ltd. 0.86%, ExxonMobil Corp. 0.00%, Ivanhoe Mines Ltd. 3.23%, MMC Norilsk Nickel PJSC 1.64%, Pacific Infrastructure Ventures Inc. 1.89%, Smurfit Kappa Group plc 0.00%. .

Net Asset Value
as of 01/24/2020

Global Resources Fund PSPFX $4.50 -0.03 Gold and Precious Metals Fund USERX $9.85 0.11 World Precious Minerals Fund UNWPX $3.28 -0.01 China Region Fund USCOX $8.94 -0.10 Emerging Europe Fund EUROX $7.83 -0.03 All American Equity Fund GBTFX $26.39 -0.27 Holmes Macro Trends Fund MEGAX $17.02 -0.28 Near-Term Tax Free Fund NEARX $2.23 No Change U.S. Government Securities Ultra-Short Bond Fund UGSDX $2.00 No Change