Second Quarter 2017

For the quarter, the Barclays U.S. Treasury Bills 6-9 Months Index returned 0.16 percent, while the U.S. Government Securities Ultra-Short Bond Fund returned 0.16 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.

As global economies continued to produce steady growth during the quarter, fixed-income markets were relatively stable compared with the previous two quarters. For the most part, investors continued to favor riskier assets. The Federal Open Market Committee (FOMC) continued its efforts to normalize monetary policy by raising short-term interest rates 25 basis points at its June meeting, the third increase since December. It also announced its intention to begin reducing the level of assets on its $4.5 trillion balance sheet. The current market expectation is for the very gradual reductions of the Fed's holdings of Treasuries and mortgage-backed securities (MBS) to begin in the fourth quarter of this year.

Expectations of increased economic stimulus in the United States diminished somewhat as policy and economic agendas proposed by the Trump administration were slow to materialize. Yields for three-, six-, and 12-month Treasuries pressed higher during the quarter, while yields at the long end of the curve continued to fall from where they began the year.

The result was a moderate flattening of the yield curve, which has begun to raise some concerns about how much further the Fed can continue to tighten policy without risking inverting the curve--historically, a precursor of market peaks and often recessions. Against this backdrop, riskier assets such as high-yield bonds and emerging-market debt posted moderate gains, while rate-sensitive sectors such as government debt posted more modest gains.

In general, the consensus of market participants is fairly positive to slightly neutral on prospects for the U.S. economy. Uncertainty remains about whether the Fed will continue to raise rates if inflation stays below the 2 percent target, growth slows and other central banks remain hesitant to loosen stimulative policies. The return to normal rates in developed markets is likely to be a lengthy process, as might the implementation of market-friendly budget and regulatory policy changes supported by the Trump administration.

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 10/16/2017

Global Resources Fund PSPFX $5.85 -0.01 Gold and Precious Metals Fund USERX $7.92 -0.15 World Precious Minerals Fund UNWPX $6.43 -0.15 China Region Fund USCOX $11.62 -0.01 Emerging Europe Fund EUROX $7.12 No Change All American Equity Fund GBTFX $24.23 -0.04 Holmes Macro Trends Fund MEGAX $20.70 0.13 Near-Term Tax Free Fund NEARX $2.23 No Change U.S. Government Securities Ultra-Short Bond Fund UGSDX $2.00 No Change