First Quarter 2019

For the first quarter, the Barclays Municipal 3-Year Bond Index returned 1.33 percent, while the Near-Term Tax Free Fund returned 0.74 percent. 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.

A global economic slowdown, stalled trade talks between the U.S. and China, and a Treasury rally provided a boost to the municipal bond market, which posted the best first quarter in four years. Muni bond volume jumped 16 percent year-over-year to $76.3 billion. The volume from the same period a year earlier had been light at $64 billion, following 2017’s fourth-quarter surge in issuance after passage of tax reform legislation that directly impacted the muni market and future issuance. The Federal Reserve’s dovish announcement of a pause on future interest rate hikes and an end to its balance sheet runoff injected a dose of calm into the fixed income market. Investors remain focused on the short end of the muni yield curve where muni/Treasury ratios dropped below 70 percent inside five-year maturities.

The Tax Cuts and Jobs Act (TCJA) of 2017 placed a $10,000 cap on state and local tax (SALT) deductions, which applies to the combined state and local income taxes or general sales taxes, real estate taxes and personal property taxes. It also placed limits on the ability of municipal bond issuers to “advance refund” outstanding issues when a municipality issues one bond to pay off another outstanding bond before the typical 10-year non-call date most municipal bonds carry. SALT deduction limits ended up being a boon for muni bonds. Investors, especially those in high-tax states such as New York, New Jersey and California, flocked to munis in order to take advantage of the tax-exempt income.

Recently, as a means to have more flexibility, and in response to the advance refunding limits, issuers have begun to issue debt with call features inside of nine years. For the issuer, this means the bond can be called earlier, but for investors, it shortens the call protection they receive. Reduced supply and the SALT caps, combined with low interest rates, provided a combined tailwind driving strong year-to-date performance for munis.


The Barclays 3-Year Municipal Bond Index is a total return benchmark designed for short-term municipal assets. The index includes bonds with a minimum credit rating BAA3, are issued as part of a deal of at least $50 million, have an amount outstanding of at least $5 million and have a maturity of 2 to 4 years.

Net Asset Value
as of 07/15/2019

Global Resources Fund PSPFX $4.62 0.01 Gold and Precious Metals Fund USERX $8.27 0.07 World Precious Minerals Fund UNWPX $2.93 0.03 China Region Fund USCOX $8.99 0.03 Emerging Europe Fund EUROX $7.16 -0.01 All American Equity Fund GBTFX $24.82 -0.07 Holmes Macro Trends Fund MEGAX $17.06 No Change Near-Term Tax Free Fund NEARX $2.22 No Change U.S. Government Securities Ultra-Short Bond Fund UGSDX $2.00 No Change