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July 2014

The Global Resources Fund lost 4.25 percent in July after posting a strong gain of 9.63 percent in the second quarter.  The fund lagged its benchmark, the S&P Global Natural Resources Index, by 307 basis points. This performance was due to a short-term rotation as well as profit taking out of upstream oil and gas producers and into other commodity subsectors that previously lagged in the first half of the year. See complete fund performance here.


  • The fund benefited from an underweight position in fertilizer and agricultural chemicals as the decline in corn prices to multi-year lows weighed on future demand.  However, the fund’s position in Methanex Corp. posted a gain of 5.3 percent in the period. 
  • Oil and gas refining and marketing stocks outperformed in July after better-than-expected earnings reports in the second quarter, highlighting strong free-cash flow generation and future master limited partnership (MLP) optionality.  Valero Energy, Marathon Petroleum and Western Refining Inc. all generated positive returns during the month.
  • The Global Resources Fund was positively affected by its underweight position in major integrated oils, which generally lagged in July, due in part to underwhelming earnings reports from industry bellwethers. 


  • The fund’s oil and gas portfolio underperformed its benchmark during the month, partially due to profit taking after a strong second quarter. Anadarko Petroleum, Devon Energy and Sanchez Energy Corp. were negative short-term contributors.
  • The Russell 2000 Small-Cap Index underperformed the S&P 500 Index by nearly 500 basis points for the month. Accordingly, the fund’s weighting in junior natural resource companies generally underperformed larger stock names due to the market’s preference for liquidity and lower volatility.
  • The fund’s Canadian oil service and equipment portfolio lagged the benchmark in advance of second-quarter earnings and a strong first half of the year.  Xtreme Drilling, CanElson Drilling and Canadian Energy Services generated negative short-term returns for the month.


  • Lead prices have been on the rise due to increased future demand. According to Morgan Stanley, consumption will exceed output by 279,000 metric tonnes this year. The short supply is on the back of limited future mine production, while the strong demand stems from boosts in manufacturing. For example, Ford Motor Co. reported last week that it will introduce 23 new models worldwide this year.
  • According to a forecast by Sanford C. Bernstein, Latin America will consume 28.9 million tonnes of liquefied natural gas (LNG) by 2025. This staggering amount of consumption from the world’s largest LNG market is more than double the 13.3 million projected for this year.
  • The International Energy Agency (IEA) has reported that global oil demand will rise at the fastest pace in five years, climbing 1.5 percent to a record 94.1 million barrels a day in 2015. The dramatic increase is the result of growth in China and other emerging markets.


  • Coal continues its decline amid news that China is seeking to curb air pollution. The policy will help cut coal imports of power plants by 2 percent this year, according to Goldman Sachs.
  • Despite its recent rally, zinc is set to stall. Contracts in Shanghai, which are at a record import discount, signal weak demand and too much supply in China. The discount between zinc’s price on the Shanghai Futures Exchange and the delivery price of the imported metal on July 11, was the largest since February 2010.
  • News of increased supply coming out of Libya and new pipelines in the U.S. has created a negative forecast on oil prices through the rest of the year. Futures could weaken further on news of additional supply gains.

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. The S&P 500 Stock Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies. The Russell 2000 Index is a U.S. equity index measuring the performance of the 2,000 smallest companies in the Russell 3000. The Russell 3000 Index consists of the 3,000 largest U.S. companies as determined by total market capitalization.

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 06/30/2014: Anadarko Petroleum Corp. 2.66%, Canadian Energy Services & Technology Corp 0.85%, CanElson Drilling Inc. 1.09%, Devon Energy Corp. 2.72%, Ford Motor Co. 0.00%, Marathon Petroleum Corp. 0.00%, Methanex Corp. 0.00%, Sanchez Energy Corp. 1.93%, Valero Energy Corp. 0.00%, Western Refining Inc. 0.00%, Xtreme Drilling and Coil Services Corp. 1.23%.

Net Asset Value
as of 08/27/2014

Global Resources Fund PSPFX $9.98 0.02 Gold and Precious Metals Fund USERX $7.46 0.02 World Precious Minerals Fund UNWPX $6.92 No Change China Region Fund USCOX $8.40 -0.07 Emerging Europe Fund EUROX $8.06 -0.01 All American Equity Fund GBTFX $33.92 -0.03 Holmes Macro Trends Fund MEGAX $24.56 -0.07 Near-Term Tax Free Fund NEARX $2.26 No Change U.S. Government Securities Ultra-Short Bond Fund UGSDX $2.00 No Change