First Quarter 2021

The Emerging Europe Fund gained 1.97% in the first quarter 2021, outperforming its benchmark, the Emerging Europe 10/40, which gained 0.44%. See complete fund performance here.

The fund outperformed its index by 1.53%. It was a volatile quarter, but equites moved higher on expectations of faster vaccine rollouts in Europe and optimism over markets reopening. The fund beat its index mostly due to its higher exposure to Western Europe and underweight Poland. Moreover, the Turkish lira depreciated against the dollar. Currency hedges had positive 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 higher exposure to Germany as well as underweighting Poland had the most positive effect on the fund’s performance relative to the index. In Germany, car makers outperformed. Shares of Daimler gained 26% and shares of Bayerische Motoren Werke (BMW) gained 17% on expectations of stronger sales in electric cars.
  • On the sector level, the fund’s stock selection in consumer discretionary and information technology had the most positive effect on the fund’s performance relative to the index. In consumer discretionary, underweighting Allegro, a Polish e-commerce company, and overweighting German car makers worked the best. In information technology, underweighting the Polish gaming company CD Projekt benefited the fund the most.
  • The top three positive contributors to the fund’s performance were all Russian stocks:
    • Lukoil, Russia’s largest private oil company, contributed 1.6% to the fund’s performance. The equity moved higher with stronger oil price. The price of Brent oil gained more than 20% in the first quarter and shares of Lukoil appreciate more than 18% during the same period.
    • Evraz, a Russian steel maker, contributed 0.70% to the fund’s performance. Share of Evraz gained 27% in the first quarter on expectations of a global pickup in economic activity due to the improving pandemic situation.
    • TCS Group Holding, a Russian online bank, contributed 0.60% to the fund’s performance.  Shares gained more than 70% in the first quarter on expectation of stronger revenue from fintech operations.


  • On the country level, overweighting Turkey had the most negative effect on the fund’s performance relative to the index. Overweighting telecommunications and stock selection in banks did not work. Shares of Turkish lenders declined by more than 30% on worries over domestic politics and lower rates. However, the fund benefited from hedging the Turkish lira which depreciated against the dollar by 10%.
  • On the sector level, the fund’s underweight position in energy had the most negative effect on the fund’s performance relative to the index. Russian oil and gas producers Rosneft and Novatek outperformed due to stronger oil and gas prices. Improving investors’ sentiment about recovery in global economic activities pushed commodities higher.
  • The top three negative contributors were all Russian stocks:
    • Turkiye Garanti Bankasi, a Turkish bank, contributed negative 0.58% to the fund’s performance. Turkish banks sold off on worries over domestic politics and the country’s central bank switching back to loose monetary policy. In March, Turkish lenders declined more than 30% after President Recep Erdogan fired the central bank’s governor, who was credited for stabilizing the country’s currency by sharply increasing rates.
    • Turkiye Is Bankasi, a Turkish bank, contributed negative 0.46% to the fund’s performance.
    • Surgutneftegas, a Russian gas producer, contributed negative 0.42% to the fund’s performance. Its shares declined by 3% in the first quarter. JPMorgan downgraded the company to a Neutral recommendation from Overweight, and Goldman Sachs recommended selling Surgutneftegas shares.


European equites continued to move higher in the first quarter on expectations of further market reopenings and faster vaccine rollouts. Economic activity picked up. Manufacturing rebounded further in the first quarter, but services remained weak. The European Commission's economic sentiment indicator (ESI) for the eurozone jumped in March, taking it slightly above its long-term average for the first time since the outbreak of Covid-19. Europe is speeding up vaccination efforts. Germany doubled the number of daily Covid-19 vaccinations, France hit a key immunization milestone a week ahead of schedule and Italy is set to ease lockdown restrictions as contagion rates slow. Travel and leisure stocks hit a record high, as markets expect that this year’s tourism season will be stronger than last year. However, Eastern European countries are recording the highest number of Covid cases. Poland is struggling to cope with its highest number of new infections since the pandemic began, and Hungary now has one of the highest Covid mortality rates in the world. Further market recovery will very much depend on the ability to reopen markets and contain the spread of the infections.


The MSCI Emerging Markets Europe 10/40 Index is a free float-adjusted market capitalization index that is designed to measure equity performance in the emerging market countries of Europe (Czech Republic, Greece, Hungary, Poland, Russia and Turkey). The index is calculated on a net return basis (i.e., reflects the minimum possible dividend reinvestment after deduction of the maximum rate withholding tax). The index is periodically rebalanced relative to the constituents' weights in the parent index.

The economic sentiment indicator (ESI) is a composite indicator produced by the Directorate General for Economic and Financial Affairs (DG ECFIN) of the European Commission. Its objective is to track GDP growth at Member states, EU and euro area levels.

Holdings may change daily. Holdings are reported as of the most recent quarter-end. Holdings are reported as of the most recent quarter-end. Holdings in the Emerging Europe Fund as a percentage of net assets as of 3/31/2021: Daimler AG 1.16%, Bayerische Motoren Werke AG 1.54%, SA 0.00%, CD Projekt SA 0.00%, Lukoil PJSC 9.81%, Evraz PLC 4.16%, TCS Group Holding PLC 1.26%, Rosneft Oil Co. PJSC 3.21%, Novatek PJSC 0.43%, Turkiye Garanti Bankasi AS 0.78%, Turkiye Is Bankasi AS 0.86%, Surgutneftegas PJSC 0.00%.

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