First Quarter 2020

The Gold and Precious Metals Fund had a total return of  negative 31.85 percent in the first quarter of 2020, underperforming its benchmark, the FTSE Gold Mines Index, which returned  negative 16.13 percent. See complete fund performance here.

Gold bullion moved higher by the end of quarter but took a significant dip in March with the impact of the COVID-19 pandemic on capital markets. From January to the beginning of March, gold moved higher by nearly $200 an ounce, but tumbled to the low $1,470s with risk parity trades being forced to unwind with the drop in long bond yields. Often these risk parity hedge funds hedge their risks by holding gold.  With the collapse of the yield curve structure, they faced significant margin calls and were forced to liquidate their gold holdings. Within a couple of weeks, the trauma for gold was done and the metal rallied to a 3.95 percent gain for the quarter.

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 zero-weighting of Newcrest Mining. With an average fund weighting of 8.36 percent in the benchmark, it fell 33.39 percent during the quarter. Thus the fund avoided 183 basis points of losses. Newcrest Mining is the third largest member of the FTSE Gold Miners Index.
  • Out significant underweight in Agnico-Eagle Mines, at an average weight of 1.04 percent versus the index weight of 7.27 percent, helped the fund outperform when Agnico missed quarterly guidance after a long record of outperforming guidance. The shares finished the quarter down 35.75 percent, thus giving the fund a relative gain against the index in the amount of 121 basis points.  Agnico-Eagle is a member of the FTSE Gold Miners Index.
  • The fund’s raising of cash during the quarter was our third most significant contributor to the fund’s return. The fund averaged 5.38 percent cash, and this balance and timing shielded the fund from 81 basis points in losses.


  • The largest detractor from fund performance was the underweighting of Newmont Mining relative to the benchmark. The company gained 4.50 percent in the quarter, and with its average weighting of 21.39 percent in the benchmark, the fund lost 350 basis points.
  • The second largest detractor from fund performance was exposure to the Direxion Daily Junior Gold Miners Index 3X Bull, which fell 95.23 percent for the quarter. It has begun to rebound after the March quarter, and we added it to the fund’s position, but it was down 341 basis points at quarter-end.
  • The third largest detractor from fund performance was exposure to the Direxion Daily Gold Miners Index 3X Bull, which fell 80.48 percent for the quarter. It has begun to rebound after the quarter, but the fund was marked down by 292 basis points at quarter-end.


The Federal Reserve is facing a threat that hasn’t been experienced before – a sudden collapse in corporate revenue and household income from a global pandemic. Equity markets are plunging, indicating fear of a global recession, and volatility in the bond market just hit the highest since the financial crisis. U.S. lawmakers rushed to pass a fiscal package in the trillions. The U.S. dollar continued to surge, but not for any fundamental reasons. It only surged due to the liquidity crisis driven by fear of a recession and the desire for cash. Corporate share buybacks will likely come to a halt, taking a major driver of money flows into the market away. Treasury holdings by foreign central banks held in custody at the New York Fed fell $31 billion to a two-year low of $2.9 trillion in the week ended March 18. Bloomberg reports with low oil prices and shrinking current accounts in emerging markets and China, President Donald Trump can’t count on foreign central banks to take on more Treasuries. Are Modern Monetary Theory (MMT) supporters about to see it in practice? The idea is that countries with their own central banks don’t need to worry about budget deficits because they can just buy whatever debt the government issues will be certainly be stress tested in the coming months.


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.

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. A margin call is a demand by a broker that an investor deposit further cash or securities to cover possible losses.

Fund portfolios are actively managed, and holdings may change daily. 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 3/31/2020: Newcrest Mining Ltd. 0.00%, Agnico Eagle Mines Ltd. 1.19%, Newmont Corp. 4.31%, Direxion Daily Gold Miners Index Bull 3X Shares 1.12%, Direxion Daily Junior Gold Miners Index Bull 3X Shares 0.33%.

Net Asset Value
as of 06/04/2020

Global Resources Fund PSPFX $4.06 No Change Gold and Precious Metals Fund USERX $10.20 0.06 World Precious Minerals Fund UNWPX $3.51 0.08 China Region Fund USCOX $8.72 -0.03 Emerging Europe Fund EUROX $5.85 -0.12 All American Equity Fund GBTFX $22.27 -0.15 Holmes Macro Trends Fund MEGAX $15.45 -0.04 Near-Term Tax Free Fund NEARX $2.24 No Change U.S. Government Securities Ultra-Short Bond Fund UGSDX $2.00 No Change