Third Quarter 2020

The Gold and Precious Metals Fund had a total return of 16.13 percent in the third quarter of 2020, outperforming its benchmark, the FTSE Gold Mines Index, which returned 7.70 percent. See complete fund performance here.

Gold bullion moved up nearly 11 percent in July with the dollar falling 4 percent on the prospect of more government stimulus and some enthusiasm to take out the prior 2011 highs in the gold price. Price action for the rest of the quarter was less volatile, with gold largely trading sideways to down. Gold still maintained a positive return of 5.89 percent for the quarter, marking eight straight quarters of back-to-back gains, yet broader market participants have largely ignored the precious metals space. Recently, several well-known billionaires have publicly stated they have bought gold. It’s one of the few investments we believe make sense in these periods of high government debt.

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 our overweighting of K92 Mining. With an average fund weighting of 8.45 percent for the quarter, the stock gained 75.59 percent and contributed 378 basis points to the fund. K92 was raised to our largest weighting in the fund back in January of 2020 and is not a member of the benchmark, the FTSE Gold Miners Index.
  • The second biggest contributor to the fund’s outperformance was our underweighting of Newmont Corporation, which was 19.61 percent of the benchmark. We only maintained an average weighting of the equity in the fund at 2.08 percent and a long-term equity anticipation (LEAP) on the equity at a weight of 1.68 percent. The equity returned just 3.15 percent and the LEAP gained 4.66 percent, respectively for the quarter. Our underweighting of Newmont, which underperformed, contributed 92 basis points of relative performance with the majority of the return coming from underweighting the equity.
  • Major Drilling Group International was the fund’s third biggest contributor, with an average weighting of 2.01 percent. The stock rose 69.47 percent and contributed 89 basis points to the fund. Major Drilling is not a member of the benchmark.


  • The largest detractor from fund performance was our zero weighting in Agnico Eagle Mines, which was a 7.40 percent member of the benchmark. Agnico Eagle gained 24.74 percent for the quarter. This positive gain detracted from our performance by 97 basis points. Agnico Eagle appears to be modestly overvalued on our resource model and lost some of its more senior management team members due to retirement.
  • The second largest detractor from fund performance was the inclusion of Sandstorm Gold Royalties, which declined 12.27 percent for the quarter. Sandstorm had a very strong price gain in the prior quarter. It had an average weighting of 3.87 percent in the fund and is not a member of the benchmark.
  • The third largest detractor from fund performance was zero exposure to Kinross Gold, which gained 22.25 percent following an increase of 81.26 percent the prior quarter. The zero weighting relative to the benchmark weight of 5.22 percent detracted from the fund’s relative performance by 50 basis points. Kinross continues to be rewarded by steady execution despite our resource model indicating the stock is fundamentally overvalued.


There is still considerable uncertainty regarding the economic outlook with respect to the Covid-19 virus cases, which have begun ticking back up in certain regions of the U.S. and the world. Gold-backed ETFs saw a 10th straight month of inflows in September. With the significant inflows of gold and other precious metals going into ETFs, trading of futures and options on the COMEX by speculators seems to have lost its leadership in setting the direction of metal prices. The appetite for buying physical metals seems to be overwhelming price speculators who historically have moved the gold price around by paper trades.

Silver, known for its massive and rare price spikes, could be on its way to another boom. The white metal’s gains are nearly double that of gold for 2020, and it was the best performing precious metal in the third quarter with a gain of 27.62 percent. Retail investors have added more than 8,800 tons of the metal to ETFs so far this year. Palladium was the second best performing precious metal, gaining 18.88 percent, followed by platinum at 7.69 percent. While palladium is mainly used in catalytic converters on gasoline-fueled vehicles, platinum has suffered from a decline in diesel vehicle sales in Europe post the Volkswagen emission rigging scandal. However, platinum’s future may be improving with the push for more green energy via fuel cells, which use platinum as a catalyst. The number of gold bulls is growing.

Bank of America is sticking by its forecast of $3,000 an ounce gold over the next 18 months. Citigroup said that the current gold cycle is unique and that prices could “stay in a higher range for longer.” Goldman raised its 12-month price forecast to $2,300. Miners are also bullish. Agnico Eagle Mines CEO Sean Boyd said, “We would not be surprised to see $2,500 within the next two years because there’s still so much uncertainty out there.”


The FTSE Gold Mines Index encompasses all gold mining companies that have a sustainable and attributable gold production of at least 300,000 ounces a year, and that derive 75% or more of their revenue from mined gold. The S&P 500 Stock Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies. COMEX is the primary futures and options market for trading metals such as gold, silver, copper, and aluminum. Formerly known as the Commodity Exchange Inc., COMEX merged with the New York Mercantile Exchange (NYMEX) in 1994 and became the division responsible for metals trading. It is not possible to invest in an index.

LEAPS is a part of options trading that stands for long-term equity anticipation securities. LEAPS can be defined as options that have an expiry cycle of more than one year, unlike other standard options that have expiry cycles of three months, six months or nine months.

A basis point, or bp, is 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% (0.0001). A warrant is a derivative that gives the right, but not the obligation, to buy or sell a security—most commonly an equity—at a certain price before expiration.

Fund portfolios are actively managed, and holdings may change daily. Holdings are reported as of the most recent quarter-end and should not be considered a recommendation to buy or sell any security. Holdings in the Gold and Precious Metals Fund as a percentage of net assets as of 9/30/2020: K92 Mining Inc. 9.26%, Newmont Corp. 3.35%, Major Drilling Group International 2.42%, Agnico Eagle Mines Ltd. 0.00%, Sandstorm Gold Ltd. 3.55%, Kinross Gold Corp. 0.00%.

Net Asset Value
as of 01/19/2021

Global Resources Fund PSPFX $6.45 0.19 Gold and Precious Metals Fund USERX $12.97 0.08 World Precious Minerals Fund UNWPX $5.07 0.06 China Region Fund USCOX $11.06 0.57 Emerging Europe Fund EUROX $6.39 0.03 All American Equity Fund GBTFX $24.65 No Change Global Luxury Goods Fund USLUX $20.28 0.04 Near-Term Tax Free Fund NEARX $2.25 No Change U.S. Government Securities Ultra-Short Bond Fund UGSDX $2.00 No Change