Third Quarter 2019

The Holmes Macro Trends Fund had a total return of negative 0.88 percent in the third quarter of 2019, underperforming its benchmark, the S&P 1500 Composite Index, which returned 1.53 percent. See complete fund performance here.

Utilities were the strongest performers for the third quarter of 2019 while energy was the worst.  Interestingly healthcare was the largest detractor from the fund due to stock selection. Even though our model was “off” on the selection of companies that the investing community favored, we still believe it has the potential to offer robust performance going forward.  Adding to the lag in performance during the last quarter was investors chasing “mega cap” companies, rather than companies exhibiting superior growth metrics.

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 largest contributors to the fund were allocations to industrials, consumer discretionary and information technology.
  • The fund’s overweight in industrials and consumer discretionary proved to be a good decision, as evidenced by the allocation’s outperformance.  The fund’s consumer discretionary allocation benefitted from the Federal Reserve Board’s reduction in interest rates that lowered consumers’ cost to borrow.
  • Investments in Trex, Crocs and Federal Signal were among the best contributors to fund performance. Trex’s second quarter earnings were better than expected, beating estimates in addition to raising revenue guidance.


  • The fund’s allocations to materials, communication services and health care were the largest drags on performance.
  • The fund’s stock selection in health care had the largest adverse contribution to the fund’s overall performance. The health care sector was the second worst performer for the benchmark.
  • Investments in Inogen, Exelixis and Medifast were the greatest absolute detractors to the fund’s performance. Inogen, a maker of healthcare products, cut their full year revenue guidance and missed the lowest analyst estimate for second quarter earnings.


Surveying investment potential for the fourth quarter, the prospect of the Fed reducing the benchmark interest rate in the coming meetings seems to be driving supportive demand for equity shares, bonds and gold. Additionally, lower interest rates are stimulating the demand for residential housing which should help provide a boost to GDP.  As usual, the question on nearly every investor’s mind is not when, but how much the Fed will cut rates during the final meetings of 2019.

We do see some headwinds. Many analysts believe the trade war will not end any time in the near future since there is a possibility of a presidential impeachment. Plus, investor appetite for additional investments in the capital markets continues to decline.  

For example, investors are seemingly becoming more stringent when selecting equity investments as evidenced by the recent poor performance in the initial public offering (IPO) market.  This distaste was driven by the fact that seven out of the ten largest IPOs this year engaged in a multi-class voting structure to help insulate management from shareholders.  Not only do investors dislike this strategy, but such strategies can prevent a company from being included in many of the passive indexes. In doing so, the stocks will most likely miss out on investment flows from index funds.

Ultimately, with an accommodative Fed, the current administration’s desire to have strong stock market performance and institutional appetite for equity fund-like returns, we feel the probability of higher equity prices are in our future.


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. The S&P 500 Stock Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies.

Fund portfolios are actively managed, and holdings may change daily. Holdings are reported as of the most recent quarter-end. Holdings in the All American Equity Fund and Holmes Macro Trends Fund as a percentage of net assets as of 9/30/2019: Trex Co Inc 4.63%, Crocs Inc 3.62%, Federal Signal Corp 3.33%, Inogen Inc 2.01%, Exelixis Inc 2.98%, Medifast Inc 2.34%.

Net Asset Value
as of 11/11/2019

Global Resources Fund PSPFX $4.37 -0.02 Gold and Precious Metals Fund USERX $8.47 -0.06 World Precious Minerals Fund UNWPX $2.91 -0.03 China Region Fund USCOX $9.00 -0.17 Emerging Europe Fund EUROX $7.44 -0.05 All American Equity Fund GBTFX $25.33 -0.10 Holmes Macro Trends Fund MEGAX $16.77 -0.05 Near-Term Tax Free Fund NEARX $2.22 0.01 U.S. Government Securities Ultra-Short Bond Fund UGSDX $2.00 No Change