Second Quarter 2020

The Gold and Precious Metals Fund had a total return of 65.99 percent in the second quarter of 2020, outperforming its benchmark, the FTSE Gold Mines Index, which returned 52.79 percent. See complete fund performance here.

Gold bullion moved up nearly 7 percent in April as the trauma of off-the-rails risk parity trades implosion were unwound. Price action for the rest of the quarter was less volatile with gold climbing nearly 3 percent for each of the ensuing months. Federal Reserve policy indicated interest rates will remain low and Congress looks to be working towards another round of stimulus as the COVID-19 virus pandemic appears to be on its second wave, particularly in the southern U.S., where it was postulated that the warm weather will kill off the virus come summer. For the most recent quarter, gold gained 12.92 percent, marking seven straight quarters of back-to-back gains. Nevertheless, many market participants have largely ignored the precious metal space.

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 biggest contributor to fund performance was our underweighting of Newmont. With an average fund weighting of 22.86 percent in the benchmark, it gained 36.96 percent during the quarter. Our weighting was just 2.56 percent of the fund over the quarter. Thus, the fund avoided 248 basis points of underperformance by underweighting Newcrest Mining, which is the largest member of the FTSE Gold Miners Index. The fund owned LEAPs (long-term equity anticipation securities) on Newmont for an additional 2.02 percent of the fund, which returned 83.13 percent for the quarter, yielding the fund 74 basis points of outperformance.
  • Our zero-weight in Polymetal International, versus the index weight of 3.13 percent, helped the fund outperform. Polymetal finished the quarter up just 19.12 percent, thus giving the fund a relative gain against the index in the amount of 125 basis points. Polymetal is a member of the FTSE Gold Miners Index.
  • The third most significant contributor to the fund’s return was our holdings in Sandstorm Gold, which gained 92.02 percent for the quarter. The fund averaged 4.35 percent weighting in Sandstorm, thus yielding the fund 120 basis points of outperformance. Sandstorm is not a member of the FTSE Gold Miners Index.


  • The largest detractor from fund performance was our 2.50 percent cash weighting relative to a cashless benchmark. Attribution analysis shows this cost the fund 267 basis points. To try and offset the cash losses, we held positions in LEAPs on Barrick Gold and Newmont.
  • The second largest detractor from fund performance was our exposure to jeweler Men?, which fell 9.51 percent during the quarter. Our weighting in Men? averaged 1.48 percent and its underperformance detracted from the fund’s performance by 117 basis points.
  • The third largest detractor from fund performance was zero-exposure to Kinross Gold, which gained 81.26 percent for the quarter. Our zero-weighting detracted from our relative performance to the FTSE Gold Miners Index by 95 basis points.


The Federal Reserve is facing a threat that has never been experienced before—a sudden collapse in corporate revenue and household income from a global pandemic. However, equity markets have surged off their March lows and nearly erased all the losses for the year. The surge in the U.S. dollar, as companies sought access to cash, has ended as the dollar slipped 2.76 percent for the quarter. The yield on the 10-year Treasury Inflation-Protected Securities (TIPS) dropped to negative 0.71 percent by quarter-end. From a macro perspective, investment banks across the spectrum are starting to raise their gold price targets based on the economic scenarios that could play out. President Donald Trump’s reelection appears to be in contention and there seems to be a growing backlash even among his own party on who the next president should be. Regardless of who is the next president, the economic conditions in the U.S. are likely to deteriorate further with the inevitable pending layoff announcements which are likely to cascade and roil the economy with uncertainty.


The FTSE Gold Mines Index encompasses all gold mining companies that have a sustainable and attributable gold production of at least 300,000 ounces a year, and that derive 75% or more of their revenue from mined gold. The S&P 500 Stock Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies. It is not possible to invest in an index.

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). A warrant is a derivative that gives the right, but not the obligation, to buy or sell a security—most commonly an equity—at a certain price before expiration.

Risk parity is a conceptual approach to investing which attempts to provide a lower risk and lower fee alternative to the traditional portfolio allocation of 60% stocks and 40% bonds which carries 90% of its risk in the stock portion of the portfolio. Long-term equity anticipation securities (LEAPS) are publicly traded options contracts with expiration dates that are longer than one year. As with all options contracts, a LEAPS grant a buyer the advantage, but not the necessity, to purchase or sell—depending on if the option is a call or a put—the underlying asset at the predetermined price on or before its expiration date.

Fund portfolios are actively managed, and holdings may change daily and should not be considered a recommendation to buy or sell any security. Holdings are reported as of the most recent quarter-end. Holdings in the Gold and Precious Metals Fund as a percentage of net assets as of 6/30/2020: Newmont Corp. 4.31%, Newcrest Mining Ltd. 0.00%, Polymetal International PLC 0.00%, Sandstorm Gold Ltd. 3.88%, Barrick Gold Corp. 2.18%, Mene Inc. 2.16%, Kinross Gold Corp. 0.00%.

Net Asset Value
as of 08/05/2020

Global Resources Fund PSPFX $4.97 0.07 Gold and Precious Metals Fund USERX $14.76 0.28 World Precious Minerals Fund UNWPX $5.38 0.08 China Region Fund USCOX $9.43 0.06 Emerging Europe Fund EUROX $5.93 0.08 All American Equity Fund GBTFX $23.87 0.12 Global Luxury Goods Fund USLUX $16.66 0.21 Near-Term Tax Free Fund NEARX $2.26 No Change U.S. Government Securities Ultra-Short Bond Fund UGSDX $2.00 No Change