Third Quarter 2018

For the third quarter, the Barclays U.S. Treasury Bills 6-9 Months Index returned 0.46 percent, while the U.S. Government Securities Ultra-Short Bond Fund returned 0.31 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.

Stability in growth and employment figures allowed the Federal Reserve to enact its widely anticipated increase in the federal funds rate by 25 basis points in September, to a target range of between 2.00 and 2.25 percent. Noting the strength of the U.S. economy, and inflation near the 2 percent target, the Fed removed language that interest rate policy would remain “accommodative,“ and reaffirmed its outlook for further gradual hikes into 2019. Data released in September showed wages to be growing at the fastest rate since 2009, while additions to non-farm payrolls remain above 185,000 on a three-month average.

Treasury yields went up across the curve throughout the quarter. Once again the rate move was led by the front end of the yield curve, with Treasury bills and notes out to three years experiencing the largest increase in yield. The fund’s positioning in variable rate instruments and shorter duration bonds had a positive impact, buffering performance as yields rose during the quarter.

The voting Federal Open Markets Committee (FOMC) members released a new projection for where it sees rates over the next two years and in the long run, known as the dot plot. Its new dot plot maintained the forecast for one more rate hike this year, most likely in December, and three in 2019, though the range of expectations widened. With all of the trade uncertainty, many people were watching to see if the Fed could become more cautious, but it doesn't appear to be the case. Based on the dot plot of where each FOMC participant sees interest rates going, the consensus calls for 3.1 percent by the end of 2019 (three rate hikes next year) and 3.4 percent by the end of 2020 (one more hike). Members also gave their 2021 projections for the first time. No rate hikes are expected in 2021, according to the consensus, but there is a wide range. FOMC member estimates range from a low federal funds rate range of 2 percent to 2.25 percent (where it is right now) to a maximum of 4 percent to 4.25 percent. As such, there is substantial uncertainty as to where rates are heading beyond the next couple of years.


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 03/21/2019

Global Resources Fund PSPFX $4.58 0.02 Gold and Precious Metals Fund USERX $7.52 -0.01 World Precious Minerals Fund UNWPX $2.83 -0.01 China Region Fund USCOX $8.69 0.10 Emerging Europe Fund EUROX $6.75 -0.01 All American Equity Fund GBTFX $23.91 0.19 Holmes Macro Trends Fund MEGAX $17.01 0.18 Near-Term Tax Free Fund NEARX $2.20 No Change U.S. Government Securities Ultra-Short Bond Fund UGSDX $2.00 No Change