Third Quarter 2016

The Holmes Macro Trends Fund appreciated 6.31 percent in the third quarter of 2016, outperforming its benchmark, the S&P Composite 1500 Index, which returned 3.98 percent. Overall, smaller companies and growth-oriented stocks underperformed. See complete fund performance here.

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.


  • Stock selection was strong in health care, industrials and financials.
  • The fund’s stock picking in the financial sector proved superior as our holdings outperformed the sector
  • LogMeIn, Universal Insurance and Trex Company were among the best contributors to fund performance.


  • A higher allocation to consumer discretionary and a higher cash level was a detractor to fund performance.
  • Stock selection was feeble in information technology, the fund’s second largest allocation, thus the principal driver of underperformance.
  • Investments in Texas Roadhouse, Allegiant Travel and Manhattan Associates were among the worst contributors to the fund’s performance.


  • Home Depot reported second-quarter earnings that met and raised its full-year outlook amid a strong U.S. housing market. 
  • Retail drug stores have been undermined by concerns about the opaque pricing structure of the pharmacy benefits management arms, which has pushed relative valuations to extremely attractive levels. While it is difficult to forecast whether any major concessions will be made to appease health insurers, this focus is masking an increasingly upbeat picture for the rest of the core business.
  • While the manufacturing side of the U.S. economy continues to struggle due to excess capacity and ongoing deflationary pressures from abroad, the ISM Non-Manufacturing Index suggests that services activity remains in good shape. Media companies tend to thrive when the service sector is outperforming goods producers, because it heralds top-line outperformance. Furthermore, proxies for media productivity and sales/employment are seeing a reacceleration, which should support relative forward earnings momentum.
  • While banks are tightening lending to most sectors, they remain willing to extend mortgage credit. Long-term mortgage rates are extremely low and consumers are taking full advantage, as recent U.S. housing data has been on the strong side. This trend should continue on the back of firming income growth.


  • Elizabeth Warren, Bernie Sanders and three other U.S. senators are going after Aetna for leaving Obamacare. The senators sent a letter to the company's CEO questioning the motives of the company in its decision to ditch 70 percent of its Affordable Care Act.
  • The strong July employment report may tempt investors to lean into bank stocks’ relative performance weakness under the assumption that signs of solid domestic growth will finally lead to higher rates. However, it is important to keep in mind that the bulk of the deflation impacting the U.S. is being transmitted through a strong U.S. dollar, which acts as an overall corporate profit drag. Thus, to the extent that the currency continues to appreciate, it will be difficult for inflation expectations to recover from depressed levels or allow the long end of the yield curve to rise.
  • The U.S. government is planning to file lawsuits to block the massive mergers of four health care giants, according to Bloomberg. The Department of Justice will try to block both the $54 billion deal between Anthem and Cigna, which would create the largest health insurance company based on the number of people covered, and a $37 billion takeover of Humana by Aetna. Both deals are being blocked on anticompetitive grounds, Bloomberg said, citing sources within the Justice Department. The deals had already faced regulatory pushback from Democratic U.S. senators.


The S&P 1500 Composite Index is a broad-based capitalization-weighted index of 1500 U.S. companies and is comprised of the S&P 400, S&P 500, and the S&P 600.  The index was developed with a base value of 100 as of December 30, 1994.

ISM Non-manufacturing Index is an index based on surveys of more than 400 non-manufacturing firms' purchasing and supply executives, within 60 sectors across the nation, by the Institute of Supply Management (ISM). The ISM Non-Manufacturing Index tracks economic data, like the ISM Non-Manufacturing Business Activity Index. A composite diffusion index is created based on the data from these surveys, that monitors economic conditions of the nation.

Fund portfolios are actively managed, and holdings may change daily. Holdings are reported as of the most recent quarter-end. Holdings in the Holmes Macro Trends Fund as a percentage of net assets as of 9/30/2016: LogMeIn Inc. 2.87%, Universal Health Services Inc. 0.00%, Trex Co. Inc. 2.95%, Texas Roadhouse Inc. 1.99%, Allegiant Travel Co. 2.16%, Manhattan Associates Inc. 2.37%, The Home Depot Inc. 1.98%, Aetna Inc. 0.00%, Anthem Inc. 0.00%, Cigna Corp. 0.00%, Humana Inc. 0.00%.

Net Asset Value
as of 01/18/2017

Global Resources Fund PSPFX $5.52 -0.07 Gold and Precious Metals Fund USERX $7.87 -0.21 World Precious Minerals Fund UNWPX $6.95 -0.19 China Region Fund USCOX $7.70 0.08 Emerging Europe Fund EUROX $5.98 -0.02 All American Equity Fund GBTFX $23.75 0.09 Holmes Macro Trends Fund MEGAX $18.71 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