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The Barclays Municipal 3-Year Bond Index gained 0.25 percent during the month of October while the Near-Term Tax Free Fund gained 0.12 percent. See complete fund performance here.

The combination of tepid economic activity in China, plummeting commodity prices and uncertainty over the timing and reaction of the U. S. Federal Reserve have all conspired to produce weak investment returns and dramatic declines for most global equity markets. Despite these headwinds, a significant increase in new issue supply and recent outflows experienced by municipal mutual funds, the asset class has proven to be very esilient while posting positive returns on a year-to-date basis.

Although there has been a number of headlines associated with a few well-known and troubled issuers, municipal credit conditions (in aggregate) continue to improve as the domestic economy has emerged from the Great Recession and exhibited signs of slow, steady improvement. Important revenue sources for states and local governments such as personal income, capital gains, sales and property taxes continue to show positive trends amid a backdrop of improving economic activity and a strong housing market. Other important beneficiaries of this type of growth are revenue bond issuers who have enjoyed a combination of improving revenues and stable financial operations.

An increased focus on budgets following the recession has left municipalities reluctant to issue new debt and increase spending in general even though the need for infrastructure financing continues to mount. On a year-to-date basis, tax exempt supply totaled just under $278 billion, which is an increase of over 74 percent compared to the prior year. Notably, refunding activity continues to drive supply as refunding issuance totaled over $133 billion, which was an increase of 61 percent compared to the prior year. This is a positive sign as municipalities are refunding older dated debt issued at higher rates.

On October 28, 2015, Chicago's city council passed a $7.8 billion budget for 2016 that includes a $543 million increase in property taxes, to be phased in over four years, which will help shore up its police and fire pension plans. While the property tax increase was politically unpopular (increases average property tax bill 12-13 percent), it demonstrates a willingness of the city to address its pension difficulties. As of December 31, 2014, the city's four pension plans (municipal employees, laborers, fire and police) had a combined unfunded liability of $19.7 billion, which equated to a very low funding ratio of 34.4 percent. With the property tax increase, Chicago projections now show both the fire and police pension plans reaching a satisfactory 90 percent funding level by 2055.

For the fund, a higher exposure to the shorter end of the yield curve hurt performance as the 1-3 year portion of the curve underperformed the 5-7 year portion. The fund's overweight exposure to water and school district bonds was a source of outperformance.

Performance data quoted above is historical. Past performance is no guarantee of future results. Results reflect the reinvestment of dividends and other earnings. For a portion of periods, the fund had expense limitations, without which returns would have been lower. 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. Performance does not include the effect of any direct fees described in the fund's prospectus which, if applicable, would lower your total returns. Performance quoted for periods of one year or less is cumulative and not annualized. Obtain performance data current to the most recent month-end here or by calling 1-800-US-FUNDS.

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 11/24/2015

Global Resources Fund PSPFX $4.94 0.05 Gold and Precious Metals Fund USERX $4.76 0.05 World Precious Minerals Fund UNWPX $3.90 0.07 China Region Fund USCOX $7.77 0.01 Emerging Europe Fund EUROX $5.60 -0.11 All American Equity Fund GBTFX $27.22 0.06 Holmes Macro Trends Fund MEGAX $20.68 -0.03 Near-Term Tax Free Fund NEARX $2.25 No Change U.S. Government Securities Ultra-Short Bond Fund UGSDX $2.00 No Change