Fourth Quarter 2016

For the quarter, the Barclays U.S. Treasury Bills 6-9 Months Index returned 0.07 percent, while the U.S. Government Securities Ultra-Short Bond Fund returned -0.35 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.

While the European Central Bank (ECB) elected to ease policy in roundabout fashion at its December policy meeting, the Federal Open Market Committee (FOMC) decided to tighten policy at its own December meeting, raising the policy rate from 25-50 basis points to 50-70 basis points. This move did not come as much of a surprise to market participants, as it was fully priced into fed funds future contracts prior to the meeting. Similarly, the release of the FOMC statement was very much as expected, delivering an even handed, non-committal assessment of the U.S. macroeconomic backdrop.

However, the Federal Reserve did deliver one final surprise to the market in the form of an upgrade to the policy-tightening forecast for 2017. The median participant now looks for three hikes in 2017, up from two in September, and the mean outlook for the funds rate at the end of next year was revised up 7 basis points from 1.31 percent to 1.38 percent. The level of the funds rate projection for 2018 and 2019 was shifted up slightly, though the pace of hikes in those years was generally little changed from the September projections. Interestingly, this upgraded 2017 tightening guidance did not come with any upgrades to the FOMC's economic forecast projections. The Fed expects slightly better growth next year of 2.1 percent, versus its prior forecast of 2.0 percent. The 2018 growth forecast was left unchanged at 2.0 percent. Despite offering minimal forward guidance, the 25 basis point policy tightening seemed to temporarily reawaken the animal spirits in the U.S. Treasury market as yields surged higher, led by the middle segment of the curve.

The Barclays U.S. Treasury Bills 6-9 Months Total Return Index tracks the performance of U.S. Treasury Bills with a maturity of six to nine months.

A basis point, or bp, is a common unit of measure for interest rates and other percentages in finance. One basis point is equal to 1/100th of 1%, or 0.01% (0.0001).

Net Asset Value
as of 03/29/2017

Global Resources Fund PSPFX $5.47 0.03 Gold and Precious Metals Fund USERX $7.63 0.04 World Precious Minerals Fund UNWPX $6.63 0.06 China Region Fund USCOX $8.49 -0.07 Emerging Europe Fund EUROX $6.18 0.01 All American Equity Fund GBTFX $24.45 -0.02 Holmes Macro Trends Fund MEGAX $18.99 0.01 Near-Term Tax Free Fund NEARX $2.22 No Change U.S. Government Securities Ultra-Short Bond Fund UGSDX $2.00 No Change