First Quarter 2019

For the first quarter of 2019, the Barclays U.S. Treasury Bills 6-9 Months Index returned 0.71 percent, while the U.S. Government Securities Ultra-Short Bond Fund returned 0.41 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 strong equity rebound following sharp declines at the end of last year, a dovish shift from central banks and mounting growth concerns combined to allow government bonds to perform well in the first quarter of 2019. The dovish pivot from major central banks proved particularly significant, with markets having grown nervous over the prospect of monetary tightening in the U.S. The heads of both the Federal Reserve and the European Central Bank (ECB) implied that rates would not rise in 2019. Growth and inflation forecasts were also lowered. U.S. 10-year Treasury yields fell 30 basis points (bps) over the quarter, reaching their lowest level since late-2017. The three-month Treasury bill yield rose higher than that on 10-year bonds in March. This yield curve inversion underlined the growing caution among investors around economic growth prospects.

Coupon income historically has contributed the majority of total returns for fixed income. However, the recent decline in yields may have temporarily elevated the role of capital appreciation in generating returns. Price appreciation made up roughly three quarters of U.S. Treasury returns year-to-date.

A slowing yet still growing global economy should continue to lend support to the bond markets. Global inflation pressures remain restrained and are unlikely to drive changes in global monetary policy in the near term. The Fed’s recent dovish pivot is important, as it has eased the pressure from rising short-term rates and a stronger dollar on fixed income assets. The Fed also said it may allow for modest overshoots above its inflation target. This indicates the pause in monetary tightening could be an extended one. These factors point to potential for a moderate steepening of the U.S. yield curve. The traditional inverse relationship between U.S. equity and government bond returns is alive and well. As such, the negative correlation is likely to sustain itself in this late-cycle period, with Treasuries acting as a buffer to any selloffs in risk assets driven by growth scares.


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 is one hundredth of one percent, used chiefly in expressing difference of interest rates.

Net Asset Value
as of 07/16/2019

Global Resources Fund PSPFX $4.59 -0.03 Gold and Precious Metals Fund USERX $8.22 -0.05 World Precious Minerals Fund UNWPX $2.92 -0.01 China Region Fund USCOX $8.95 -0.04 Emerging Europe Fund EUROX $7.14 -0.02 All American Equity Fund GBTFX $24.77 -0.05 Holmes Macro Trends Fund MEGAX $17.05 -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