Second Quarter 2021

The Global Luxury Goods Fund had a total return of 9.86% in the second quarter of 2021, outperforming its benchmark, the S&P 1500 Composite Index, which returned 8.14%. The fund beat its index by 1.72% mostly due to the fund’s overweight position in consumer discretionary and good stock selection in financials. See complete fund performance here. Performance data quoted represents past performance, which does not guarantee future results.

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 fund’s overweight position in consumer discretionary sector had the most positive effect on the fund’s performance relative to the index. The strategy to overweight the European luxury retailers worked well. Shares of Hermes International gained 32%, LVMH Moet Hennessy Louis Vuitton (LVMH) 18.5%, Zalando 23% and Christian Dior 33.5%. Luxury good sales were supported by global re-opening of economies as the pandemic situation has been improving due to faster vaccine rollouts.
  • The fund’s stock selection in the financial sector had the second most positive effect on the fund’s performance relative to the index. The Global Luxury Goods Fund held shares of Blackstone Group Inc., which gained 26% while the S&P 1500 index had no position in it. Moreover, share of JPMorgan outperformed and the Luxury fund had an overweight position.
  • The strongest contributor to fund performance was LVMH. Shares gained 18.5% in the second quarter supported by strong demand in the U.S. and China. Europe opened its markets for travel, and it will further strengthen the company’s global position.


  • The fund’s underweight allocation to the information technology sector had the most negative effect on the fund’s performance relative to the index. Shares of Microsoft gained 13%, while the Luxury fund had a small exposure to it. Fund did not own shares of Nvidia Corporation, a technology company, which appreciated by 50% in the second quarter supported by strong demand for its products. Moreover, last September, Nvidia announced a deal to acquire Arm from SoftBank Group, and three major chip makers have stepped up to say they support Nvidia’s proposed acquisition of the U.K.-based chip-design house Arm. The Luxury fund did not hold shares of Nvidia Corporation per fund’s investment model.
  • The fund’s underweight position in the communication services sector and fund’s cash level had the second most negative effect on the fund’s performance relative to the index. Shares of Alphabet gained 21% and shares of Charter Communications, Inc. appreciated by 17%. The Global Luxury Goods Fund did not hold shares of either Alphabet or Charter Communications. This was a result of the fund’s investment model underweighting the sector.
  • The biggest detractor to fund performance was Williams-Sonoma. The stock’s price decline 11% in the second quarter after surging 77% in the first quarter due to strong earnings release. During the pandemic, online sales were strong and now the company re-focuses on its in-store sales.


Luxury goods are in high demand and sales are picking up, supported by the improving pandemic situation. Further recovery will very much depend on the pandemic situation. If COVID-19 spreads and/or it continues to mutate it will keep customers from returning in numbers, especially overseas visitors. However, when summer began, we have seen more market re-openings. Europe opened its borders to tourists from the United States and Canada, which should serve well for increased travel traffic and spending. While many of China’s travel restrictions have been relaxed, travel in China is still closed to almost all foreigners. The international consulting company Bain & Company reported that China is expected to become the largest market for luxury goods by 2025, while Chinese buyers will account for almost half of the world’s spending on luxury goods. The United States is seeing stronger-than-expected rebound thanks to a big stimulus program. Lamborghini reported that has almost sold out of luxury sports cars for this year. Tesla continues to report strong sales of electric vehicle on the domestic market. Outside the U.S., things look different — in China, and some parts of Europe, the transition to electric vehicles is further along, and Tesla’s dominance is less absolute.  Global luxury sales could return to the pre-COVID levels this year. The speed of the recovery has been uneven. The industry's biggest groups such as LVMH, Hermes and Kering are already above their 2019 levels, while smaller labels like Ferragamo and Tod's are still having to catch up.


The S&P 1500 Composite is a broad-based capitalization-weighted index of 1500 U.S. companies and is comprised of the S&P 400, S&P 500, and the S&P 600.  Gross domestic product is the total value of goods produced and services provided in a country for one year. Earnings per share (EPS) is a company’s net profit divided by the number of common shares it has outstanding.

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 6/30/2021: Hermes International SA 6.46%, LVMH Moet Hennessy Louis Vuitton SA 7.79%, Zalando SE 2.09%, Christian Dior SE 0.90%, The Blackstone Group Inc. 4.13%, JPMorgan Chase & Co. 0.00%, Microsoft Corp. 0.00%, NVIDIA Corp. 0.00%, Alphabet Inc. 0.00%, Charter Communications Inc. 0.00%, SoftBank Group Corp. 0.00%, Williams-Sonoma Inc. 1.61%, Tesla Inc. 6.42%, Kering SA 2.14%, Salvatore Ferragamo SpA 0.00%, Tod’s SpA 0.00%.

Standard Disclosure
Please consider carefully a fund’s investment objectives, risks, charges and expenses. For this and other important information, obtain a fund prospectus by visiting or by calling 1-800-US-FUNDS (1-800-873-8637). Read it carefully before investing. Foreside Fund Services, LLC, Distributor. U.S. Global Investors is the investment adviser.

Stock markets can be volatile and share prices can fluctuate in response to sector-related and other risks as described in the fund prospectus.

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor.

Net Asset Value
as of 10/19/2021

Global Resources Fund PSPFX $6.97 0.04 Gold and Precious Metals Fund USERX $12.25 0.05 World Precious Minerals Fund UNWPX $4.70 0.01 China Region Fund USCOX $8.65 0.20 Emerging Europe Fund EUROX $7.45 0.08 Global Luxury Goods Fund USLUX $24.61 0.04 Near-Term Tax Free Fund NEARX $2.23 No Change U.S. Government Securities Ultra-Short Bond Fund UGSDX $1.99 No Change