First Quarter 2021

The China Region Fund lost 1.4% in the first quarter 2021, underperforming its benchmark, the Hang Seng Composite index, which gained 3.29%. See complete fund performance here.

The fund underperformed its index by 4.7%, mostly due to stock selection in China and overweighting Malaysia. Stock selection among Chinese food producers and overweighting Malaysian medical glove makers had the most negative effect on fund’s performance.

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. Performance data quoted represents past performance.


  • On the country level, the fund’s overweight position in Taiwan had the most positive effect on the fund’s performance relative to the index. In particular, the fund’s exposure to technology equipment and semiconductor manufacturers benefited the fund. Shares of computer maker Quanta Computer gained 19%. The global chip shortage pushed shares of Taiwan Semiconductor, the world’s largest chip maker, higher by 10%.
  • On the industry level, the fund’s overweight position in electronic technology and renewable energy had the most positive effect on the fund’s performance relative to the index. Strong global demand for technology equipment due to the pandemic pushed stocks higher.
  • The top three positive contributors were as follows:
    • Country Garden Services Holdings, a real estate developer, contributed 1.8% to the fund’s performance. Shares of Country Garden gained 50% on prospects of stronger revenue due to planned mergers and acquisitions.
    • China Feihe Limited, maker and distributor of dairy products, contributed 0.83% to the fund’s performance. Its shares gained 21%. The company underwent restructuring that will enable the group to launch a full-fledged online retail business.
    • BYD Electronic, an electronic components maker, contributed 0.64% to the fund’s performance, with shares gaining 12% off strong demand. BYD Electronic's outlook remains strong, thanks to resilient growth from tablets, wearables and other consumer electronic products.


  • On the country level, the fund’s stock selection in Hong Kong and overweight Malaysia had the most negative effect on the fund’s performance relative to the index. In Hong Kong, overweighting food retailers had the most negative effect on fund’s performance. Shares of Nongfu Spring, maker of non-alcoholic beverages, declined 29%. Shares of Yihai International, a food maker, dropped by more than 30% due to rising raw material prices and competition in the Chinese compound condiment and convenience food market. In Malaysia, the fund’s overweight position in medical glove producers had the most negative effect on fund’s performance. Shares of Top Glove and Hartalega declined more than 20% on optimism around COVID-19 vaccine rollouts.
  • On the sector level, the fund’s overweight position in food producers and health care (discussed in the sections above and below) had the most negative effect on the fund’s performance relative to the index.
  • The top three negative contributors were as follows:
    • Nongfu Spring, maker of non-alcoholic beverages, contributed negative 1.3% to the fund’s performance. Zhong Shanshan, founder of Nongfu Spring, briefly overtook Mukesh Ambani as the richest person in Asia as shares of the company gained sharply at the end of last year. The company listed its shares in September of last year, with the lockup period ending prompting some investors to take profits in the first quarter after a strong performance in the fourth quarter of 2020. Moreover, the price of polyethylene terephthalate (PET), the plastic material used to produce bottles, moved higher, putting pressure on the company’s margins.
    • Pinduoduo, an e-commerce retailer, contributed negative 1.3% to the fund’s performance.  Shares declined after Colin Huang, the founder of Pinduoduo, unexpectedly stepped down from his chairman role. We like Pinduoduo for its unique business strategy (group-buying business model). It is an e-commerce platform with most active buyers and China’s largest online seller of agricultural products.
    • Ming Yuan Cloud Group, a software company, contributed negative 1.1% to the fund’s performance. Similar to Nongfu Spring above, Ming Yuan successfully listed its shares in September of 2020, and the initial public offering lockup period was due to expire and investors took some profits after shares surged at the end of last year. We like the company for its strong balance sheet and potential to growth.


Chinese equities as measured by the CSI 300 Index reached a new record high in the first quarter of 2021, supported by the Chinese government’s continued fiscal and monetary stimulus. China’s Manufacturing Purchasing Manager’s Index (PMI) remained strong, with new orders and exports improving. Export growth was 30.6% year-over-year in March with imports up 38.1%. We believe China's economy will continue to rebound in 2021 with expected annual growth of around 8.8%, according to the China Economic Security Outlook Report 2021, released recently by Peking University. On the geopolitical arena, the biggest headwind to China could be the U.S. administration and its stance on international politics. Domestic politics may also affect the stock market performance. China's tech companies have been given a month to fix anti-competitive practices; otherwise, they risk facing the same fate as Alibaba, which was fined $2.8 billion. Chinse regulators said they were particularly focused on eliminating "choose one of two," the practice whereby platforms such as Alibaba forced merchants to sell exclusively on their own sites and not those of rivals.

Outside of China, chip and electric technology producers in Taiwan and South Korean should continue to benefit from strong global demand. Indonesia is sitting on the world’s largest reserves of nickel, a key raw material of electric vehicle (EV) batteries. The Indonesian government has launched aggressive incentives to boost early adoption of EVs and lure investment. Its ambition is to form a complete supply chain with nickel mining, downstream processing as well as battery and auto manufacturing.


The Hang Seng Composite Index is a market capitalization-weighted index that comprises the top 200 companies listed on Stock Exchange of Hong Kong, based on average market cap for the 12 months. The CSI 300 is a capitalization-weighted stock market index designed to replicate the performance of 300 A-share stocks traded in the Shanghai and Shenzhen stock exchanges. The Purchasing Manager’s Index is an indicator of the economic health of the manufacturing sector. The PMI index is based on five major indicators: new orders, inventory levels, production, supplier deliveries and the employment environment.

Fund portfolios are actively managed, and holdings may change daily. Holdings are reported as of the most recent quarter-end. Holdings in the China Region Fund as a percentage of net assets as of 3/31/2021: Quanta Computer Inc. 3.05%, Taiwan Semiconductor Manufacturing Co. Ltd. 0.00%, Country Garden Services Holdings Co. Ltd. 0.00%, China Feihe Ltd. 4.58%, BYD Electronic 3.84%, Nongfu Spring Co. Ltd. 3.72%, Yihai International 2.88%, Top Glove Corp. Bhd 2.09%, Hartalega Holdings Ltd. 2.07%, Pindouduo Inc. 4.58%, Ming Yuan Cloud Group Holdings 2.84%, Alibaba Group Holding Ltd. 1.10%

Net Asset Value
as of 04/20/2021

Global Resources Fund PSPFX $6.49 -0.14 Gold and Precious Metals Fund USERX $13.19 0.02 World Precious Minerals Fund UNWPX $5.09 -0.01 China Region Fund USCOX $9.90 -0.07 Emerging Europe Fund EUROX $6.23 -0.05 All American Equity Fund GBTFX $24.65 No Change Global Luxury Goods Fund USLUX $22.40 -0.30 Near-Term Tax Free Fund NEARX $2.25 No Change U.S. Government Securities Ultra-Short Bond Fund UGSDX $2.00 No Change