There’s More to the Gold Rally than European Market Fears

By Frank Holmes
CEO and Chief Investment Officer
U.S. Global Investors

Gold was down 1.72 percent at the end of 2014, but things are looking up for the yellow metal. This week I returned from presenting at the Vancouver Resource Investment Conference, where sentiment for gold was through the roof.

And with good reason. Even though gold was down last year, it still ranked as the second-best-performing currency, following the U.S. dollar. The metal has risen about 10 percent year-to-date, and on Tuesday, for the first time since mid-August, it broke through the $1,300 mark.

Are you excited yet?

Our two gold funds, the Gold and Precious Metals Fund (USERX) and World Precious Minerals Fund (UNWPX), have responded positively to the rally. Both have jumped above their 50-day moving averages, a key trend indicator many investors use to decide when to allocate assets.

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You’ve probably heard or read that gold’s breakout is a direct result of what’s currently happening in Europe, but there’s much more to the story.

To be clear, the events I’m referring to are a huge deal and shouldn’t be discounted. As we say at U.S. Global Investors, government policy is a precursor to change, and certainly gold has struck a musical chord in the world of currency symphonies.

The European Central Bank’s (ECB’s) unveiling of a much-needed, trillion-dollar quantitative easing (QE) program will hopefully lead to a stronger economy in the eurozone. For two years now, it seems the region has held much of the world hostage with its lack of growth.

Switzerland unexpectedly unpegged its currency, the Swiss franc, from the euro, shocking money managers all over the world. The country also let its 10-year government bond yield sink into negative territory, joining Germany, Spain and Italy, whose yields now hover near record lows. This makes other assets, especially gold, look much more attractive.

And in Greece, the possibility of a far-left, anti-austerity Syriza victory in Sunday’s general election could spell the end of the Mediterranean country’s membership in the European Union.

All of these developments have spurred investors to seek safety in gold.

But there’s more at work fueling the metal’s ascent.

Currency Wars
As I’ve discussed many times before, the strong U.S. dollar—it’s currently up 2.2 standard deviations for the 10-year period—has not only weighed on crude oil but also caused other global currencies to depreciate. Both have helped many foreign gold producers expand their profit margins, as bullion is then able to gain in value more quickly.

“The Canadian dollar has weakened quite a bit against the U.S. dollar for a lot of our gold stocks in Canada,” Ralph Aldis, portfolio manager of our gold funds, explained during our most recent webcast. “These producers benefit when the local currency depreciates.”

This is because they pay their workers in the weaker local currency but sell their bullion in U.S. dollars.

When expressed in Canadian dollars, gold has sharply ramped up to a nine-month high:

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Gold has also shot upward in Japanese yen and euro terms:

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A weaker South African rand has been a tailwind for two of our South African holdings, Gold Fields and Harmony Gold Mining. Below you can see that both companies have broken free of their 50-day moving averages—by a much wider spread than we’ve seen since at least March of last year.

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Then there are falling fuel costs, ordinarily gold miners’ biggest expense.

“If you factor in lower energy prices, that basically gives companies a double whammy in terms of margin expansion,” Ralph said.

Headquartered in Toronto, Barrick Gold, the world’s largest gold producer, saves about $25 per ounce on lower diesel expenses, according to BullionVault.

Before it started recovering at the beginning of January, gold had been pretty banged up since mid-August. As a result, companies have slashed capital spending, especially the junior miners.

But recently we’ve seen merger and acquisition (M&A) activity in the gold space, typically a good sign. In late November, Osisko Gold Royalties announced it would buy Quebec City-based Virginia Mines for $424 million, and now we’ve learned that Vancouver-based Goldcorp will be acquiring precious metals explorer Probe Mines for $440 million. Probe is a relatively new player in the field, having made two discoveries in Ontario since 2009.

First of all, this makes sense. If you’re looking to expand your company, you might as well do it when everything’s on sale. But these M&As also indicate that there’s enough confidence in the future of the precious metals industry to justify such capital spending. It says a lot about the market that Goldcorp would agree to purchase a younger exploration company, a move we haven’t seen in a while.

Repatriation Games
This is what largely drives gold demand: confidence in the metal as a store of value, in good times and in bad. Gold is much more than a commodity—it’s a form of currency, one that “has never required the credit guarantee of a third party,” as former Federal Reserve Chair Alan Greenspan made clear in September.

Last year, gold was the second-strongest currency in the world, trailing only the U.S. dollar. It’s amazing how well it held up under the pressure of the greenback. Not just investors but also central banks recognize this.

“If the dollar or any other fiat currency were universally acceptable at all times,” Greenspan said, “central banks would see no need to hold any gold. The fact that they do indicates that such currencies are not a universal substitute.”

Indeed, we’re seeing central banks all around the world shoring up their own gold reserves by repatriating bullion from foreign institutions. December saw the biggest monthly outflow of gold from the New York Fed since 2001, bringing its holdings to their lowest level this century. 

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Central banks might be jittery from global growth concerns—the International Monetary Fund just downgraded its growth forecast for 2015—or simply recognizing the tenuousness of fiat money. Either way, the message is resounding: gold is an essential component to a strong portfolio and an excellent store of value.

As always, we recommend a 10-percent weighting in gold: 5 percent in bullion, 5 percent in gold stocks, then rebalancing every year.

I’ll have more to share with you when I return next week from Zurich, where I’ll be presenting at its International Business School. Also, be sure to catch the weekly episode of Gold Game Film with Kitco News this upcoming Monday. I’ll be conducting the interview from Florida while I attend the Inside ETFs Conference.

Expense ratios as stated in the most recent prospectus. The expense ratio after waivers is a voluntary limit on total fund operating expenses (exclusive of any acquired fund fees and expenses, performance fees, taxes, brokerage commissions and interest) that U.S. Global Investors, Inc. can modify or terminate at any time, which may lower a fund’s yield or return. Performance data quoted above is historical. Past performance is no guarantee of future results. Results reflect the reinvestment of dividends and other earnings. For a portion of periods, the fund had expense limitations, without which returns would have been lower. 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 does not include the effect of any direct fees described in the fund’s prospectus (e.g., short-term trading fees of 0.05%) which, if applicable, would lower your total returns. Performance quoted for periods of one year or less is cumulative and not annualized. Obtain performance data current to the most recent month-end at www.usfunds.com or 1-800-US-FUNDS.

Index Summary

• The major market indices finished higher this week.  The Dow Jones Industrial Average rose 0.92 percent. The S&P 500 Stock Index gained 1.60 percent, while the Nasdaq Composite advanced 2.66 percent. The Russell 2000 small capitalization index rose 1.04 percent this week.
• The Hang Seng Composite rose 2.35 percent; Taiwan gained 3.64 percent and the KOSPI advanced 2.54 percent.
• The 10-year Treasury bond yield fell 4 basis points to 1.79 percent.

Domestic Equity Market

The S&P 500 gained 1.60 percent this week as financial markets around the globe responded positively to the “shock and awe” quantitative easing (QE) announcement by the European Central Bank (ECB). Global liquidity will remain robust as central banks inject more capital into the global financial system.  Cyclical areas of the market outperformed due to the expected improving economic outlook expected in Europe and around the world. In response to the ECB’s actions, other central banks also took action to ease monetary policy. In many ways this was a defensive reaction to what has been termed a currency war, but the implications should be positive for global financial assets.

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Strengths

• The technology sector was the best performer this week with Micron Technology bouncing back 6.76 percent and recovering some of the recent sell-off, post earnings. Apple and Google also rose by more than 6 percent this week, which is a likely sign that money was coming back into the market and went to the large, liquid and quality names.
• The industrials sector was also a strong performer on the back of strong earnings results from airline names. Southwest Airlines and Delta Airlines were the best performers in the sector rising 15.96 and 10.30 percent, respectively. Lower fuel prices and continued robust industry dynamics were the drivers.
• Netflix was the best performing company this week, rising 29.68 percent. The company’s earnings report was very well received due to better-than-expected international subscriber growth and comments from the company that it would be profitable in all 200 countries with broadband internet service in two years.

Weaknesses

• The telecommunications services sector was the worst performer this week as Verizon posted a slight earnings miss, dragging the group lower. AT&T is set to report next week.
• The air freight and logistics group was also an underperformer this week. UPS fell almost 10 percent on Friday as the company unexpectedly warned that the fourth-quarter profit would be below expectations on higher costs.
• The worst performing company this week was F5 Networks, which fell 9.06 percent. The company reported quarterly revenue that was below expectations and failed to reassure investors that the second quarter would be better.

Opportunities

• After outperforming in 2014, defensive stocks may be poised to continue this positive movement. The Federal Reserve appears intent on normalizing monetary policy and the bond market is responding by sending long-term yields lower. This implies that the market believes a tighter Fed will materially slow down the economy.
• Earnings season will kick into high gear next week .Some key companies to keep an eye on include Microsoft, Apple, Facebook and Biogen IDEC.
• If oil can find a bottom and move higher, small and mid-cap energy stocks would be among the first beneficiaries.

Threats

• The rally in U.S. energy producers may be short lived as OPEC countries seem to be acting individually rather than as a collective cartel. This move makes predicting future actions more difficult, but is positive for the inverse beneficiary companies in sectors such as airlines and consumer discretionary.
• The Federal Reserve meets next Wednesday and if the recent hawkish tone remains the market may not respond positively.
• Earnings season got off to a rough start with large-cap financials disappointing, and while the past week was better, it wasn’t resoundingly so. If the market is looking for an excuse after such steady performance for the past year, a lackluster earnings season may be the catalyst for that 10-percent correction it’s been bracing for (but which has yet to materialize for more than two years).

The Economy and Bond Market

U.S. Treasury bonds were mixed this week, with short-term bond yields flat-to-up and longer-term yields falling. The European Central Bank (ECB) moved aggressively in implementing a much-awaited quantitative easing (QE) program. The concern going into the meeting was that the ECB would disappoint the market, but the bank pulled out all the stops and announced what is, in effect, an open-ended policy to purchase 60 billion euros of European government debt per month. This announcement sent bond yields lower in Europe and ignited a U.S. dollar rally.    

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Strengths

• Global central bankers, fearful of falling into a deflationary trap, continue to act aggressively and implement easing monetary policies.  
• German investor confidence soared in January according to the ZEW survey. The survey hit the highest level since February 2014.
• Housing starts for December were better than expected and weekly mortgage applications are surging on falling mortgage rates.

Weaknesses

• The HSBC China manufacturing flash purchasing managers’ index (PMI) rose in January but still remains in contraction territory.
• The International Monetary Fund reduced its 2015 global growth forecast to 3.5 percent from 3.8 percent.
• Chinese economic data remains relatively muted as GDP growth in 2014 was at the slowest level in 24 years, rising 7.3 percent. 

Opportunities

• The European Central Bank delivered this week on its QE announcement and other countries around the world responded by cutting interest rates or implementing other easing policies.
• The Federal Reserve meets again next week, and while it has continued to emphasize a preference to raise interest rates by mid-year, the strong dollar and rapidly falling inflation expectations may make the Fed backtrack a bit. If this move were to happen, the short end of the yield curve would likely rally.
• Municipal bonds continue to look like an attractive alternative in the broad, fixed-income universe.

Threats

• Greece is generating negative headlines again and while this appears to be an isolated political event, it does reinforce the idea of the potentially fragile nature of the euro currency. Greek elections are this Sunday, January 25.
• Oil prices appear to be extremely oversold. A bounce in oil could change the mood throughout the market and bonds could sell off in reaction. 
• The Fed’s next meeting is set for January 28, and if the hawkish tone continues, the market could be spooked.

Gold Market

For the week, spot gold closed at $1,294.49 up $14.04 per ounce, or 1.10 percent. Gold stocks, as measured by the NYSE Arca Gold Miners Index, lost 1.23 percent. The U.S. Trade-Weighted Dollar Index gained 2.60 percent for the week.

Strengths

• Gold prices topped $1,300 per ounce for the first time in five months on Thursday. As a result, gold traders were bullish for an eighth week, citing safe-haven demand stemming from the weaker euro as well as inflows into exchange-traded funds.
• Russia, the world’s fifth biggest holder of gold, boosted reserves for a ninth month in December, while its reserves jumped the most in six months. The country has more than tripled its gold reserves since 2005 and holds the most since at least 1993. The precious metal accounts for about 11 percent of Russia’s total foreign reserves.
• After a 47-year absence, the British Royal Mint is bringing back gold and silver bars bearing the mint’s historic refinery brand. The Royal Mint Refinery dates back to 1852 and was operated by N.M. Rothschild and Sons. Silver bars will be available in 100-gram units, while gold bars will be offered in a variety of sizes, ranging from one gram to 100-gram units. The gold bars, in particular, will be exempt from the value-added tax for British citizens.

Weaknesses

• Germany’s Bundesbank announced that it repatriated 120 tonnes of gold from Paris and New York in 2014. Since the transfers began in 2013, the bank has relocated a total of 157 tonnes. However, with Germany being the second biggest holder of gold, there is a question as to why the Bundesbank continues to struggle to get its gold reserves back. Previously, Germany has been denied requests for gold by New York as well as the opportunity to even view its gold on grounds of “security.” Further adding to this cloud of doubt is the fact that the last audit of the New York Fed took place over 50 years ago.
• The International Monetary Fund made the steepest cut to its global growth forecast in three years in an outlook released on Monday. It said slowing growth almost everywhere except in the U.S. will more than offset the boost to expansion from the slump in oil prices.
• Indian gold importers are offering the widest discount in 17 months versus London prices, as jewelers curtail purchases ahead of a possible cut in the import duty. This expectation has been built as a result of a falling trade deficit.

Opportunities

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• The institution of the Swiss National Bank’s peg of CHF 1.20 per euro, back on September 6, 2011, was the day that gold peaked at $1,920 per ounce. With the undoing of the peg and gold taking off, speculation abounds as to whether the Swiss National Bank’s actions will have once again marked a turning point for gold. In addition, silver appears to be breaking out, too, from its historic downtrend as shown in the chart below.

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• In his submission to this year’s London Bullion Market Association’s precious metals forecasting competition, Ross Norman who heads up London bullion broker Sharps Pixley, is forecasting gold to average $1,321 per ounce in 2015. Norman is considered to have been the most successful forecaster in the LBMA panel in the past, and has been the winner of the competition five times.
• Goldcorp has announced a takeover bid for junior developer Probe Mines, offering a solid premium at the $5 per share offer price.  We view this deal as a turning point in the risks mining companies have been willing to take relative to recent transactions.  Specifically, Goldcorp had previously made a bid for Osisko Mining, but only after it was completely de-risked relative to perhaps offering to buy Detour Gold or Pretium Resources, which offered better value and a higher likelihood of earning a superior return on invested capital.  Subsequently, Silver Standard bought the Marigold Mine while Coeur Mining purchased the Wharf Mine, from Goldcorp.  With Marigold and Wharf having been in production for the past 20 to 30 years, development risks were again avoided.  This move hopefully falls in line with a recent report published by Deloitte in which it recommends miners to embrace longer-term thinking, get back to basics to clarify what they stand for and what they plan to achieve in the long term.

Threats

• Barclays announced that opportunities to short gold are building as recent price gains are unsustainable.
• Goldman Sachs cut its average gold forecasts for 2016 and 2017 to $1,089 per ounce and $1,050 per ounce, respectively, citing that recent gains from weaker economic data and the surprise move by the Swiss to abandon the peg to the euro is most likely priced in.  Ironically, they then suggest that coming interest rate hikes in the U.S. which have been talked about for the last couple of years, are not incorporated into the current gold price.
• Global credit ratings advisory firm Moody’s Investors Service has changed its outlook on the global base metals industry to negative, citing weakening macroeconomic growth indicators and investor sentiment.

January 23, 2015 Bad News Is Good News: A Contrarian Case for Commodities	January 22, 2015 Is the Sentiment Up for Gold?	January 20, 2015 Watch How Gold Moves in Other Currencies

Energy and Natural Resources Market

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Strengths

• Refining stocks had a positive week as changes in crack spreads provide more favorable margins. The S&P Supercomposite Oil & Gas Refining & Marketing Index rose 11.47 percent this week, while Tesoro rose 12.09 percent this week.
• Major integrated oil stocks rallied this week as oil appears to have stabilized while higher dividend yields are attracting investors. The BI Global Integrated Oils Valuation Peers Index rose 8.32 percent this week.
• Fertilizer stocks were a relative outperformer this week along with a stronger U.S. dollar. The Bloomberg Leaders Fertilizers Index rose 2.84 percent this week, while Agrium rose 4.38 percent.

Weaknesses

• Dry ships underperformed this week as the outlook for iron ore prices remains dim. The Bloomberg Dry Ships Index closed down 3.38 percent this week.
• TSX energy stocks fell this week, failing to see the same relief that other energy stocks have experienced recently. The S&P/TSX Capped Energy Index fell 2.18 percent in dollar terms this week.
• Gold mining stocks took a breather from their recent rally this week as the dollar gained more ground. The NYSE Arca Gold Miners Index fell 1.14 percent.

Opportunities

• The official announcement from the European Central Bank of its quantitative easing program has lifted markets globally. Hopefully the success of the program will revive growth in the eurozone, thereby boosting demand for commodities.
• PT Freeport Indonesia is considering investing $17 billion to build a copper smelter in East Java ($2 billion) and to develop underground gold and copper deposits at its Grasberg mine ($15 billion) in the country. The company will sign a memorandum of understanding on land acquisition.
• According to the Commodity Weather Group, the Northeast U.S. could experience below-normal temperatures for the next seven to ten days, potentially helping to support weak natural gas prices.

Threats

• The short-term drawback of the ECB’s announcement is the increase that it has induced in the U.S. dollar. The commodities space is still desperately awaiting a reversal in the dollar.
• The platinum miners who have gone on strike in South Africa have threatened further industrial action and delivered demands for much higher pay, deepening a crisis that has become the biggest threat to the ruling ANC.

January 20, 2015 Palladium Was the Winner in 2014	January 15, 2015 You’ll Be Shocked to See How Few Equity and Bond Funds Have Risen for 14 Straight Years	January 12, 2015 Bad News Is Good News: A Contrarian View of China Investing

Emerging Markets

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Strengths

• Greek stocks rebounded substantially at the end of the week after the European Central Bank (ECB) announced the conditions of its quantitative easing (QE) program. Furthermore, unease surrounding Sunday’s election appears to have subsided as the Syriza party, the likely victor, has moved closer to the middle on many policies. The Athens Stock Exchange rose 6.31 percent this week.
• Hungarian stocks also rallied this week on the ECB’s quantitative easing announcement. This emerging Eastern European economy has been closely linked to the deflationary pressures faced by the eurozone. The Budapest Stock Exchange rallied 6.37 percent this week.
• Thai stocks outperformed this week, along with emerging markets in general, as the ECB announcement reignited the risk-on mentality among investors. The Stock Exchange of Thailand SET Index closed up 5.31 percent.

Weaknesses

• Chinese equities broke their 10-week winning streak as regulation crackdowns and slowing growth figures depressed local markets. The Shanghai Stock Exchange Composite Index fell 0.73 percent this week.
• After the government implemented a rate hike this week to combat rising prices, Brazilian equities fell slightly. The Ibovespa Brasil Sao Paulo Stock Exchange Index closed down 0.49 percent this week.
• Peruvian stocks continued to slump as copper prices weakened on China’s growth data. The Bolsa de Valores de Lima General Sector Index fell 0.58 percent this week.

Opportunities

• Immediate depreciation of the euro to a fresh 11-year low following the ECB’s larger-than-expected QE announcement may push the trade-weighted Chinese renminbi to new record highs.  If the renminbi moved up this could aggravate deflationary pressures in domestic China.  It seems that investors may be more convinced than ever that China’s next policy move, monetary or fiscal, will be further easing.  Chinese banks remain under-owned by active fund managers, despite their recently rally, and ought to benefit from looser government policy. 

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• The ECB finally announced its plans to address the growing threat of deflation in the eurozone. Through September 2016, at the earliest, the bank will purchase 60 billion euros in government bonds. The massive stimulus program pleasantly surprised markets, which popped sharply on the news. The easing policy should help revive growth in the struggling eurozone. Inflation expectations have already made a sharp U-turn, signaling the market expects further growth down the road.

Threats

• Macau’s visitor arrivals for multi-day stays in the month of December declined 8.5 percent year-over-year and 12.7 percent month-over-month, seasonally adjusted. This is the slowest move since 2009.  Anti-corruption scrutiny from China could potentially intensify over the upcoming Chinese New Year, which would not bode well for investor sentiment toward Macau’s casino operators.
• The dollar continues to break out as the weaker euro heads lower. The ECB’s announcement caused a renewed sell-off in the euro, which could be a temporary setback to emerging markets and commodities, in the form of a stronger dollar.

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Leaders and Laggards

The tables show the weekly, monthly and quarterly performance statistics of major equity and commodity market benchmarks of our family of funds.

Please consider carefully a fund’s investment objectives, risks, charges and expenses. For this and other important information, obtain a fund prospectus by visiting www.usfunds.com or by calling 1-800-US-FUNDS (1-800-873-8637). Read it carefully before investing. Distributed by U.S. Global Brokerage, Inc.

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

Foreign and emerging market investing involves special risks such as currency fluctuation and less public disclosure, as well as economic and political risk. By investing in a specific geographic region, a regional fund’s returns and share price may be more volatile than those of a less concentrated portfolio.

The Emerging Europe Fund invests more than 25 percent of its investments in companies principally engaged in the oil & gas or banking industries. The risk of concentrating investments in this group of industries will make the fund more susceptible to risk in these industries than funds which do not concentrate their investments in an industry and may make the fund’s performance more volatile.

Because the Global Resources Fund concentrates its investments in a specific industry, the fund may be subject to greater risks and fluctuations than a portfolio representing a broader range of industries.

Gold, precious metals, and precious minerals funds may be susceptible to adverse economic, political or regulatory developments due to concentrating in a single theme. The prices of gold, precious metals, and precious minerals are subject to substantial price fluctuations over short periods of time and may be affected by unpredicted international monetary and political policies. We suggest investing no more than 5 percent to 10 percent of your portfolio in these sectors.

Bond funds are subject to interest-rate risk; their value declines as interest rates rise. Tax-exempt income is federal income tax free. A portion of this income may be subject to state and local income taxes, and if applicable, may subject certain investors to the Alternative Minimum Tax as well. The Near-Term Tax Free Fund may invest up to 20% of its assets in securities that pay taxable interest. Income or fund distributions attributable to capital gains are usually subject to both state and federal income taxes. The Near-Term Tax Free Fund may be exposed to risks related to a concentration of investments in a particular state or geographic area. These investments present risks resulting from changes in economic conditions of the region or issuer.

Investing in real estate securities involves risks including the potential loss of principal resulting from changes in property value, interest rates, taxes and changes in regulatory requirements.

Past performance does not guarantee future results.

Some link(s) above may be directed to a third-party website(s). U.S. Global Investors does not endorse all information supplied by this/these website(s) and is not responsible for its/their content.

These market comments were compiled using Bloomberg and Reuters financial news.

Some link(s) above may be directed to a third-party website(s). U.S. Global Investors does not endorse all information supplied by this/these website(s) and is not responsible for its/their content.

These market comments were compiled using Bloomberg and Reuters financial news.

Fund portfolios are actively managed, and holdings may change daily. Holdings are reported as of the most recent quarter-end. Holdings as a percentage of net assets as of 9/30/2014:

Gold Fields Ltd: Gold and Precious Metals Fund, 1.08%; World Precious Minerals Fund, 0.25%
Harmony Gold Mining Co. Ltd: Gold and Precious Metals Fund, 0.86%; World Precious Minerals Fund, 0.76%
Barrick Gold Corp.: 0.0%
Osisko Gold Royalties: 0.0%
Virginia Mines, Inc.: World Precious Minerals Fund, 7.13%
Goldcorp, Inc.: Gold and Precious Metals Fund, 1.07%
Probe Mines Ltd: 0.0%
Micron Technology, Inc.: 0.0%
Apple, Inc.: All American Equity Fund, 4.35%; Holmes Macro Trends Fund, 4.56%
Google, Inc.: All American Equity Fund, 3.30%; Holmes Macro Trends Fund, 3.55%
Southwest Airlines: 0.0%
Delta Airlines: 0.0%
Netflix: 0.0%
Verizon Communications, Inc.: All American Equity Fund, 0.97%
AT&T, Inc.: All American Equity Fund, 1.09%
UPS: 0.0%
F5 Networks, Inc.: All American Equity Fund, 1.28%; Holmes Macro Trends Fund, 1.31%
Microsoft Corp.: 0.0%
Facebook, Inc.: All American Equity Fund, 2.73%; Holmes Macro Trends Fund, 3.18%
Biogen Idec, Inc.: All American Equity Fund, 3.57%; Holmes Macro Trends Fund, 3.66%
Detour Gold: 0.0%
Pretium Resources, Inc.: World Precious Minerals Fund, 2.43%
Silver Standard Resources, Inc.: Gold and Precious Metals Fund, 0.12%; World Precious Minerals Fund, 0.12%
Coeur Mining, Inc.: Gold and Precious Metals Fund, 0.02%; World Precious Minerals Fund, 0.02%
Tesoro Corp.: Global Resources Fund, 1.16%
Agrium, Inc.: Global Resources Fund, 1.45%
PT Freeport Indonesia: 0.0%

*The above-mentioned indices are not total returns. These returns reflect simple appreciation only and do not reflect dividend reinvestment.
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