First Quarter 2017

The Holmes Macro Trends Fund had a total return of 2.14 percent in the first quarter of 2017, underperforming its benchmark, the S&P Composite 1500 Index, which returned 5.74 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, consumer staples and materials.
  • The fund's overweight in industrials and consumer staples helped performance.
  • Idexx Laboratories, Kimberly Clark and Allegion were among the best contributors to fund performance.


  • The fund's overweight in consumer discretionary failed to produce positive results.
  • Stock selection was ineffective in consumer discretionary, the fund's second largest allocation, thus the principal drivers of underperformance were information technology and telecommunication services.
  • Investments in Tempur Sealy International, Pitney Bowes and Hawaiian Holdings were among the worst contributors to the fund's performance.


  • U.S. GDP came in higher than expectations at 2.1 percent versus expectations of 1.8 percent according to data released by Bloomberg this week. Much of this increase came from a substantial lift in consumer spending which rose to 3.5 percent from 3 percent in the second quarter of 2016. In addition, private inventory, residential and business investment all increased, which contributed to the percentage gains. This bodes well for raw materials.
  • Takeover activity has cooled down a bit in recent months, but there are still some big deals on the horizon. In a note to clients sent March 20, Morgan Stanley updated its Acquisition Likelihood Estimate Ranking Tool (ALERT model), a model that tracks "stock characteristics, cohort membership, and data regarding offers to forecast probabilities that stocks receive tender offers in the coming 12 months." Here's a list of the nine tech companies that Morgan Stanley says are most likely to receive takeover offers: NCR Corp, Nuance Communications, Cavium, Zebra Technologies, Coherent, Wex, Cypress Semiconductor, Teradata, Tableau Software.
  • Federal Reserve Chair Janet Yellen sought to reassure investors that the central bank's latest interest-rate increase wasn't a paradigm shift to a trigger-happy policy driven by fears of faster inflation. Speaking to reporters after the Fed's quarter percentage-point move on Wednesday, Yellen said the central bank was willing to tolerate inflation temporarily overshooting its 2 percent goal and that it intended to keep its policy accommodative for "some time."


  • When the Fed voted to hike interest rates, the market reaction saw stocks rise, bond yields fall and the U.S. dollar decline against its global peers. That, according to Goldman Sachs, was pretty much precisely the wrong reaction. After all, the U.S. central bank, by increasing its benchmark rate, was trying to tighten up things at least a little. Instead, a measure Goldman uses to gauge financial conditions actually loosened afterward. As a result, Goldman believes investors may be underestimating how quickly the Fed will move in the future.
  • According to a study by consultant Roland Berger GmbH, the proposed U.S. border tax would make most automakers unprofitable, reports Bloomberg, along with straining consumers and leading to job losses rather than gains. "The planned charge would increase the average cost of a car by $3,300, prompting a drop in demand and forcing manufacturers to react by shrinking their U.S. workforce," the firm said in a presentation.
  • Stocks have rallied more than 11 percent since the election amid speculation that President Trump's plans to cut taxes, roll back regulations and spend $1 trillion on infrastructure will get the U.S. economy growing at the 3 percent that the administration has targeted. While stocks look unstoppable right now, there have been a number of warning signs—from declining volumes to a mismatch in volatility expectations and economic uncertainty—suggesting traders should tread carefully. The latest is coming from the bond market. As the stock market heats up, so too are the expectations that the Fed will hike rates. World Interest Rate Probability data provided by Bloomberg suggests a 90 percent chance the Fed will raise its benchmark interest rate at its upcoming meeting on March 14/15. And as rate hike expectations rise, traders are dumping Treasuries. That selling is causing a bearish flattening of the yield curve, meaning that yields on shorter-term debt are rising faster than yields on long-term debt. While the yield curve isn't yet inverted, often times a sign that a recession is coming, the spread is the tightest it's been since 2007.

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.

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 3/31/2017: Allegion 4.44%, Cavium 0.00%, Coherent 0.00%, Cypress Semiconductor 0.00%, Hawaiian Holdings 1.48%, Idexx Laboratories 5.10%, Kimberly Clark 5.53%, NCR Corp 0.00%, Nuance Communications 0.00%, Pitney Bowes 3.09%, Tableau Software 0.00%, Tempur Sealy International 1.87%, Teradata 0.00%, Wex 0.00%, Zebra Technologies 0.00%.

Net Asset Value
as of 06/26/2017

Global Resources Fund PSPFX $5.31 -0.01 Gold and Precious Metals Fund USERX $7.29 -0.03 World Precious Minerals Fund UNWPX $6.22 -0.04 China Region Fund USCOX $9.49 0.10 Emerging Europe Fund EUROX $6.26 0.03 All American Equity Fund GBTFX $24.39 0.06 Holmes Macro Trends Fund MEGAX $19.82 0.01 Near-Term Tax Free Fund NEARX $2.23 No Change U.S. Government Securities Ultra-Short Bond Fund UGSDX $2.00 No Change