Third Quarter 2019

The Gold and Precious Metals Fund had a total return of 5.50 percent in the third quarter of 2019, outperforming its benchmark, the FTSE Gold Mines Index, which returned 4.75 percent. See complete fund performance here.

Gold bullion continued to move higher in the third quarter, with spot prices gaining 4.47 percent. Tariffs and economic uncertainty continue to be key drivers for the yellow metal. The Fed responded to market expectations with two 25 basis point interest rate cuts, at the July and then the September meetings.  Gold prices rallied strongly in July and exceeded $1,550 per ounce by August. By the September interest rate cut, gold traders essentially were consolidating their positions at the $1,500 level, waiting for a new catalyst.

Senior gold mining stocks rose on the price change in gold, but money flows into the precious metals space broadened with silver gaining 10.98 percent and platinum gaining 5.79 percent for the quarter – both better than gold. While we did outperform our benchmark in the third quarter we are still lagging our benchmark on a trailing year basis. Should a robust gold market materialize, we would expect to start outperforming our benchmark on the longer-term periods.  

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 Mining, with an average fund weighting of 1.05 percent for the quarter versus the benchmark at 18.47 percent. Newmont’s share price lost 1.07 percent, contributing 100 basis points of relative performance to the fund’s returns. Investors generally believed the integration of Goldcorp’s assets into their portfolio was more challenging than the company communicated.
  • Silvercorp Metals Inc. was our second biggest contributor with a price gain of 58.13 percent with an average weight in the fund of 1.86 percent.  Silvercorp contributed 69 basis points to the fund and is not a member of the FTSE Gold Mines Index.
  • K92 Mining was our third best contributor, with an average weight of 3.58 percent and an 18.10 percent gain. The company contributed 49 basis points to the fund and is not a member of the FTSE Gold Mines Index.


  • The largest detractor from fund performance was our underweighting of Barrick Gold relative to our benchmark. Barrick gained 9.67 percent in the quarter, and with its average weighting of 17.78 percent in the benchmark, the fund lost 85 basis points. We are long 2021 leaps on Barrick, which gained 21.21 percent for the quarter, netting the fund 6 basis points.
  • Silver Lake Resources was our second biggest detractor to the fund due to an analyst’s cut on valuation. Silver Lake bought Egan Street Resources for 0.27 Silver Lake shares for each Egan Street share. The company had only a 2.17 percent average weighting in the fund, but declined 28.40 percent, affecting the fund negatively. Silver Lake is not a member of the FTSE Gold Mines Index.
  • Maverix Metals was our third biggest detractor to fund performance losing 8.49 percent for the quarter, with an average weight in the fund of 3.13 percent; impacting the fund by 46 basis points. Maverix closed a strategic royalty transaction with TMAC Resources during the quarter, but thereafter filed a $300 million shelf prospectus. The company is not a member of the FTSE Gold Mines Index.


Gold broke through $1,500 per ounce in the third quarter which has raised its profile among investors.  Central banks continue to accumulate gold, most notably China, which has purchased over 100 tons of the yellow metal since December 2018. Negative-yielding government debt appears to be a driver of higher prices for gold as pension investors search for alternative investments.  Citigroup is very bullish on gold with a $2,000 per ounce forecast.

With the gold rally broadening out to silver, and platinum beginning to perform well, it bodes well for the overall precious metals sector.  We are entering an election year, so the current administration is looking for economic wins that would enhance their reelection; hence positive economic action could derail the rally. Palladium continues to perform strongly with increased pollution standards on gasoline powered vehicles driver demand for the metal for its use in autos.


The NYSE Arca Gold Miners Index is a modified market capitalization weighted index comprised of publicly traded companies involved primarily in the mining for gold and silver. The index benchmark value was 500.0 at the close of trading on December 20, 2002. 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.

Fund portfolios are actively managed, and holdings may change daily. Holdings are reported as of the most recent quarter-end. Holdings in the World Precious Minerals Fund as a percentage of net assets as of 9/30/2019: New Pacific Metals Corp 3.98%, Dolly Varden Silver Corp 4.40%, Barsele Minerals Corp 4.91%, Agnico Eagle Mines Ltd 0.00%, Chakana Copper Corp 0.76%, Gold Fields Ltd 0.00%, Auryn Resources Inc 1.23%, Nano One Materials Corp 3.94%.

Net Asset Value
as of 11/13/2019

Global Resources Fund PSPFX $4.33 -0.01 Gold and Precious Metals Fund USERX $8.69 0.09 World Precious Minerals Fund UNWPX $2.90 -0.01 China Region Fund USCOX $8.93 -0.12 Emerging Europe Fund EUROX $7.39 No Change All American Equity Fund GBTFX $25.41 0.02 Holmes Macro Trends Fund MEGAX $16.70 -0.02 Near-Term Tax Free Fund NEARX $2.22 No Change U.S. Government Securities Ultra-Short Bond Fund UGSDX $2.00 No Change