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First Quarter 2014

The Barclays Capital Municipal Bond Index gained 3.32 percent during the first quarter. Returns were directly tied to maturity – the longer the better.  The short and intermediate portions of the curve experienced modest gains with the three-year and five-year bonds returning 0.33 percent and 1.00 percent, respectively. The municipal yield curve flattened during the quarter as yields on the long end of the curve fell more than the short end. Credit factors also played a role as lower-quality bonds underperformed. AAA-rated municipals gained 2.22 percent in the quarter versus a gain of 5.52 percent for BBB-rated bonds. General obligation municipals underperformed revenue-backed bonds as hospital and industrial-development backed bonds outperformed. In specialty-state trading, Puerto Rico significantly outperformed. The territory issued long-term bonds that were well received by the market, relieving near-term pressure; Illinois and California also outperformed.

The Federal Reserve continued to "taper" its quantitative easing (QE) program during the first quarter, with $10 billion reductions in both January and March bringing the current pace to $55 billion per month. The Fed has communicated to the market its preference for a measured approach and gradual reduction over time, with the wind-down expected to be complete by the fall of 2014. The reduction in Fed stimulus is predicated on a gradually strengthening economy, which if unable to materialize in 2014, could delay the Fed from additional tapering pending better economic data.

Past performance does not guarantee future results.

The Barclays Capital Municipal Bond Index is an unmanaged index representative of the tax-exempt bond market.

Net Asset Value
as of 04/23/2014

Global Resources Fund PSPFX $9.85 0.03 Gold and Precious Metals Fund USERX $6.73 0.14 World Precious Minerals Fund UNWPX $6.43 0.11 China Region Fund USCOX $8.02 -0.03 Emerging Europe Fund EUROX $8.07 -0.06 All American Equity Fund GBTFX $32.19 -0.21 Holmes Macro Trends Fund MEGAX $23.56 -0.18 Near-Term Tax Free Fund NEARX $2.25 No Change U.S. Government Securities Ultra-Short Bond Fund UGSDX $2.00 No Change