Third Quarter 2020

The World Precious Minerals Fund had a total return of 25.00 percent in the third quarter of 2020, outperforming its benchmark, the NYSE Arca Gold Miners Index, which returned 7.42 percent. See complete fund performance here.

Gold mining stock gains were more muted than the prior quarter, following the peak in gold prices in the first week of August. Shorter-term investors were quick to take money off the table, expecting the gold rally to fail. However, selloffs in the bullion price were countered by Covid-19 news, expectations that a second stimulus measure would pass and a slowdown in the bounce back in unemployment. Overall, the longer gold builds a base, perhaps waiting for election results in November, the more likely investors will get comfortable that the stocks and bullion will rally in the fourth quarter, typically a seasonally strong period for bullion.

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 largest contributor to fund performance was Nano One Materials, which gained 107.68 percent. With an average fund weighting of 6.09 percent, the company contributed 379 basis points. Nano One announced it had entered into a joint development agreement (JDA) with a multi-billion-dollar Asian cathode material producer outside of China.
  • The second biggest contributor to fund performance was our overweighting of K92 Mining. With an average fund weighting of 5.73 percent for the quarter, the stock gained 75.59 percent and contributed 269 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 NYSE Arca Gold Miners Index.
  • The third best contributor was Chakana Copper, which gained 215.61 percent for the quarter, contributing 164 basis points to the fund. Chakana Copper is not a member of the NYSE Arca Gold Miners Index, but it gained in price with the positive move in copper prices and gold, to which the company has significant exposure.


  • An average cash balance of 3.73 percent was the biggest drag on performance relative to a cashless benchmark. Attribution analysis showed a 94 basis point impact to performance. Investment exposure to leveraged gold stock ETFs offset 28 basis points of the cash drag.
  • The second largest detractor from fund performance was our zero weighting in Gold Fields, which appreciated 31.51 percent. With an average weighting of 3.36 percent for the benchmark, the zero weighting missed 75 basis points the index accrued.
  • The third largest detractor from fund performance was a zero weighting in Agnico Eagle Mines, which was a 4.66 percent member of the benchmark. Agnico Eagle gained 24.74 percent for the quarter, and this positive gain detracted from fund performance by 64 basis points.


We learned in the third quarter that Warren Buffett’s Berkshire Hathaway bought $565 million worth of Barrick Gold during the second quarter. This reversal by Buffett, who has many times complained that gold does not pay a dividend or have any real utility, could attract more generalist investors to the space. Buffett is one of the most respected and well-known investors, and hopefully other investors follow suit by adding to their gold exposure through miners, funds or the physical metal itself.

Barrick Gold’s CEO Mark Bristow opined that the gold mining industry is still too fragmented and consolidation is necessary. In other natural resource sectors such as fertilizer, aluminum, and copper, there is almost an oligopoly pattern in that large amounts of these commodities are controlled by only a limited number of companies. By contrast, the gold industry is at the other end of the spectrum. The two largest gold companies, Newmont and Barrick Gold, may represent up to 40 percent of certain gold mining indexes, but combined they are less than 10 percent of new mine supply. Mergers and deals are starting to gain more traction in the smaller gold companies now, but new gold exploration companies are being created because the sector has seen little spending in the past decade. A lack of new significant gold discoveries over the last decade means that any significant exploration results are likely to be rewarded handsomely. Chalice Gold Mines, for example, had new nickel, copper and palladium discoveries in the first quarter. Our cost was $0.58 and today the shares are valued at over $3.00. De Grey Mining possibly made a very significant new gold discovery earlier in the year. We were able to acquire shares at $0.25, and the price is now over $1.30.

In an open letter to the mining industry, a coalition of prominent gold investors and money managers said performance of mining companies “continues to fall short.” The investors were targeting issues such as executive compensation and directors who own few shares of the companies they represent. “Though the performance of gold mining stocks has been noteworthy recently, we believe that performance continues to fall short in the areas of corporate governance, alignment of incentives and strategic vision & communication with investors,” the group said in the letter released the first day of the annual Denver Gold Group Americas Conference that takes place every September.


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. The NYSE Arca Junior Gold Indexis a modified equal dollar weighted index of small-cap companies involved in gold mining. It is not possible to invest in an index.

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 and security. Holdings in the World Precious Minerals Fund as a percentage of net assets as of 9/30/2020: Nano One Materials Corp. 6.06%, K92 Mining Inc. 6.24%, Chakana Copper Corp. 2.18%, Gold Fields Ltd. 0.00%, Agnico Eagle Mines Inc. 0.00%, Berkshire Hathaway Inc. 0.00%, Barrick Gold Corp. 0.00%, Newmont Corp. 0.40%, Chalice Gold Mines Ltd. 2.22%, De Grey Mining Ltd. 0.84%.

Net Asset Value
as of 01/15/2021

Global Resources Fund PSPFX $6.26 -0.19 Gold and Precious Metals Fund USERX $12.89 -0.44 World Precious Minerals Fund UNWPX $5.01 -0.18 China Region Fund USCOX $10.49 -0.12 Emerging Europe Fund EUROX $6.36 -0.13 All American Equity Fund GBTFX $24.65 No Change Global Luxury Goods Fund USLUX $20.24 -0.32 Near-Term Tax Free Fund NEARX $2.25 No Change U.S. Government Securities Ultra-Short Bond Fund UGSDX $2.00 No Change