Fourth Quarter 2019

The World Precious Minerals Fund had a total return of 6.43 percent in the fourth quarter of 2019, underperforming its benchmark, the NYSE Arca Gold Miners Index, which returned 10.19 percent. See complete fund performance here.

Gold bullion fell early in the quarter then rallied as we entered December, with spot prices gaining 3.04 percent over the last three months. The yellow metal was driven by safe haven demand due to global geopolitical uncertainty, with total holdings in gold bullion ETFs reaching the most on record in the fourth quarter at 2,900 metric tons. Precious metals as a whole had a strong quarter with palladium rising 16.10 percent, platinum up 9.46 percent and silver up 5.04 percent. Palladium is now more expensive than gold has ever been, closing the fourth quarter at $1,912 an ounce.

Although the fund continues to underperform relative to the benchmark at the start of a gold price cycle, the gap has narrowed for the one-year period and the fund did outperform for the month of December. Most of the past year was spent by the major gold miners on deleveraging their balance sheet with asset sales. One major problem in front of the senior gold companies is their reserve life relative to their current production. Global gold mining company reserves have fallen every year since 2012, almost a 50 percent drop. We now are seeing some of the senior and intermediate gold mining companies begin to take equity stakes in some of the junior miners. Should a robust gold market materialize, we would expect to start outperforming our benchmark.

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.


  • The biggest contributor to fund performance was Wesdome Gold Mines, with an average fund weighting of 5.21 percent for the quarter. Wesdome’s share price gained 73.93 percent, contributing 261 basis points of relative performance to the fund’s returns.  We started accumulating Wesdome late in 2015, as we reached a 10-fold price gain we have now cut our position by more than half. The benchmark does not have an allocation to Wesdome.
  • Not owning Newcrest Mining, which is 5.86 percent of the benchmark, was our second biggest contributor with its price loss of 9.27 percent. Avoiding this loss gave the fund a 136 basis point pick-up relative to our benchmark for the quarter.
  • Direxion Daily Junior Gold Miners Index Bull 3x Shares was our third best contributor, with an average weight of 2.67 percent and a 46.08 percent gain. The holding contributed 95 basis points to the fund.  Both Direxion Gold Miners and Junior Gold Miners are used in the fund to improve our tracking of our benchmark, the NYSE Arca Gold Miners Index.


  • The largest detractor from fund performance was Cardinal Resources, which declined 26.00 percent, and had an average weighting of 5.14 percent in the fund. This cost the fund 227 basis points. As with many undeveloped shovel-ready gold projects, Cardinal was largely ignored in 2019 because of a clear view that the senior mining companies were still disposing of non-core assets. The company did release a positive feasibility study on the Namdini project during the quarter and this prompted an upgrade by BMO to an outperform rating. Cardinal Resources is not a member of the NYSE Arca Gold Miners Index.
  • Dolly Varden Silver was the second biggest detractor to fund performance, falling 30.48 percent. The company had an average weighting in the fund of 3.09 percent and it yielded a loss of 1.81 basis points for the fund. Dolly Varden did expand its resources over the past year with 44 new holes. The holes found the off-set to the ore body where it previously had been cut off by a fault and demonstrated preliminary metallurgical work that shows the metals can be recovered through conventional processes. In addition, these results were enough to attract legendary investor Eric Sprott to take nearly a 14 percent interest in the company. Dolly Varden Silver is not a member of the NYSE Arca Gold Miners Index.
  • Barsele Minerals was the third biggest detractor to fund performance relative to its benchmark. Barsele’s share price fell 22.65 percent during the quarter and its average weighting in the fund was 4.34 percent, but it cost the fund 171 basis points of relative performance. Barsele released few press releases over the quarter as they are focusing on a joint venture with Agnico-Eagle Mines on developing their principal asset. Agnico-Eagle is the likely buyer for Barsele, but Agnico is careful not to promote the project, potentially impacting the future value to Agnico. Barsele Minerals is not a member of the NYSE Arca Gold Miners index.


Gold broke through $1,500 per ounce in the third quarter. It dipped a bit mid-quarter and then finished the year strong, which has raised its profile among investors. Central banks continued to accumulate gold, most notably China, which has purchased over 100 tons of the yellow metal since December 2018. Negative-yielding government debt appears to be a driver of higher prices for gold as pension investors search for alternative investments and central banks around the world are de-dollarizing where they can. Citigroup is very bullish on gold with a $2,000 per ounce forecast. Palladium continues to perform strongly with increased pollution standards on gasoline powered vehicles driver demand for the metal for its use in autos


Basis points (BPS) refers to 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%, or 0.0001, and is used to denote the percentage change in a financial instrument.

The NYSE Arca Gold Miners Index is a modified market capitalization weighted index comprised of publicly traded companies involved primarily in the mining for gold and silver. The index benchmark value was 500.0 at the close of trading on December 20, 2002.

A metric ton is a unit of weight equal to 1,000 kilograms (2,205 pounds).

Fund portfolios are actively managed, and holdings may change daily. Holdings are reported as of the most recent quarter-end. Holdings in the World Precious Minerals Fund as a percentage of net assets as of 12/31/2019: Wesdome Gold Mines Ltd 5.09%, Newcrest Mining 0.00%, Direxion Daily Junior Gold Miners Index Bull 3x Shares 3.26%, Cardinal Resources 4.23%, Dolly Varden Silver Corp 2.93%, Barsele Minerals 3.76%, Agnico Eagle Mines Ltd 0.00%.

Net Asset Value
as of 02/14/2020

Global Resources Fund PSPFX $4.39 No Change Gold and Precious Metals Fund USERX $9.73 0.05 World Precious Minerals Fund UNWPX $3.34 0.01 China Region Fund USCOX $8.97 -0.01 Emerging Europe Fund EUROX $7.46 -0.04 All American Equity Fund GBTFX $26.70 -0.03 Holmes Macro Trends Fund MEGAX $17.38 0.07 Near-Term Tax Free Fund NEARX $2.24 No Change U.S. Government Securities Ultra-Short Bond Fund UGSDX $2.00 No Change