Second Quarter 2019

The Holmes Macro Trends Fund had a total return of negative 0.53 percent in the second quarter of 2019, underperforming its benchmark, the S&P 1500 Composite Index, which returned 4.16 percent. See complete fund performance here.

Energy was the worst performing sector in the quarter ended June 30, and unfortunately, at the beginning the quarter, our stock selection model recommended an overweight allocation. This group of investments was our single largest detractor of fund performance. Even though our model was “off” on the timing, we still believe the sector will offer robust performance going forward. Additionally, we recognize that investors were chasing “mega cap” companies and not necessarily 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 consumer staples, consumer discretionary and financials.
  • The fund’s overweight in financials and consumer staples proved to be a good decision, as evidenced by the allocation’s outperformance. The fund benefited from the financial sector being the best performing sector in the benchmark this quarter.
  • Investments in MSCI, Control4 and Tempur Sealy International were among the best contributors to fund performance. Control4 announced it had agreed to be acquired by SnapAV for $23.91 per share in an all cash deal.


  • The fund’s stock selections in energy, industrials and real estate were the largest drags on performance.
  • The fund’s overweight in energy and industrials had the largest adverse contributions to the fund’s overall performance. The energy sector was the only sector in the S&P 1500 that had a negative return for the quarter.
  • Investments in, Pitney Bowes and Penn Virginia were the greatest absolute detractors to the fund’s performance. reported a 50 percent drop in revenue due to the company’s exclusive relationship with the postal service coming to an end.


Surveying the investment potential for the third quarter, the prospect of the Federal Reserve reducing the benchmark interest rate at the July 31 meeting seems to be driving supportive demand for equity shares and bonds alike. The question that seems to be on nearly every investor’s mind is not when, but how much the Fed will cut rates this year.

Adding to this, we find an interesting situation developing. The Fed is supposed to operate without any political influence, and yet the current administration, which is supposed to remain independent of the Federal Reserve Board, has been quite vocal, attempting to encourage the Fed to reduce the benchmark interest rate. 

We do see some headwinds. For example, many analysts believe trade tensions will not end any time soon, and just before the end of the second quarter, analysts were already reducing earnings expectations. We don’t believe these headwinds will overcome the dominance an interest rate cut can provide when trying to stimulate the economy. Historically, “cheap” credit has been the best tool to stimulate sluggish economies.

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 6/30/2019: MSCI Inc. 6.34%, Control4 Corp. 2.70%, Tempur Sealy International Inc. 4.36%, Inc. 0.85%, Pitney Bowes Inc. 1.38%, Penn Virginia Corp. 1.38%.


Net Asset Value
as of 09/20/2019

Global Resources Fund PSPFX $4.46 No Change Gold and Precious Metals Fund USERX $8.94 0.16 World Precious Minerals Fund UNWPX $3.27 0.05 China Region Fund USCOX $8.40 -0.11 Emerging Europe Fund EUROX $7.05 -0.03 All American Equity Fund GBTFX $24.81 -0.14 Holmes Macro Trends Fund MEGAX $16.91 -0.13 Near-Term Tax Free Fund NEARX $2.22 No Change U.S. Government Securities Ultra-Short Bond Fund UGSDX $2.00 No Change