N-CSR 1 fp0024417_ncsr.htm fp0023588

 

As filed with the Securities and Exchange Commission on March 7, 2017

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES

Investment Company Act file number 811-01800

U.S. GLOBAL INVESTORS FUNDS
Three Canal Plaza, Suite 600
Portland, Maine 04101

Jessica Chase, Principal Executive Officer
Three Canal Plaza, Suite 600
Portland, Maine 04101
207-347-2000

Date of fiscal year end: December 31

Date of reporting period: January 1, 2016 – December 31, 2016
 

ITEM 1. REPORT TO STOCKHOLDERS.

 

U.S. Global Investors Funds Annual Report


 

December 31, 2016

 

 


U.S. Global Investors Funds

 

Annual Report


 

December 31, 2016

 

 

Table of Contents


 

Letter to Shareholders

1

Definitions for Management Teams' Perspectives

10

Management Team's Perspective

12

Portfolios of Investments

54

Notes to Portfolios of Investments

98

Statements of Assets and Liabilities

110

Statements of Operations

114

Statements of Changes in Net Assets

118

Notes to Financial Statements

124

Financial Highlights

140

Report of Independent Registered Public Accounting Firm

151

Trustees and Officers

152

Approval of Investment Advisory Agreement

155

Additional Information

162

Expense Example

164

 


Nasdaq Symbols


 

U.S. Global Investors Funds

 

Investor Class

 

U.S. Government Securities Ultra-Short Bond Fund

UGSDX

Near-Term Tax Free Fund

NEARX

All American Equity Fund

GBTFX

Holmes Macro Trends Fund

MEGAX

Global Resources Fund

PSPFX

World Precious Minerals Fund

UNWPX

Gold and Precious Metals Fund

USERX

Emerging Europe Fund

EUROX

China Region Fund

USCOX

   

Institutional Class

 

Global Resources Fund

PIPFX

World Precious Minerals Fund

UNWIX

Gold and Precious Metals Fund*

USEIX

Emerging Europe Fund*

EURIX

 

*

The Institutional Class shares of the Gold and Precious Metals and Emerging Europe Funds have not commenced operations and currently are closed to investors. A notice will be issued when each class commences operations and opens to investors.

 

Atlantic Fund Services
3 Canal Plaza, Suite 600
Portland, ME
04101

 


U.S. Global Investors Funds

(unaudited)

 

 

Dear Fellow Shareholder,

 

2016 was a banner year for gold. After finishing in the red for three straight years, the yellow metal made a remarkable turnaround, ending 2016 up 8.56 percent.

 

In the first half of the year—gold’s best since 1974—demand was driven largely by the Fear Trade. Government bond yields in countries such as Japan, Switzerland and Germany plunged below zero, prompting overseas investors to pile into gold, not to mention American municipal debt. A shaky stock market early in the year, not to mention geopolitical uncertainty—specifically the risk of Brexit in the United Kingdom and the rise of Donald J. Trump here in the United States—also boosted demand.

 

In the second half, gold began to stall as investors awaited the results of the U.S. presidential election and anticipated a December rate hike. Immediately following Trump’s win, equities took off and the U.S. dollar surged, causing gold to fall out of favor. Between November 8 and December 31, 2016, the precious metal retreated nearly 10 percent.

 

Despite the downturn, gold miners managed to strike gold in 2016. The group, as measured by the NYSE Arca Gold Miners Index, finished the year up an amazing 53.26 percent, based on simple price appreciation, handily beating all other asset classes shown below.

 

 

I was immensely happy with the performance of our two gold funds, the Gold and Precious Metals Fund (USERX) and the World Precious Minerals Fund (UNWPX), both of which led many of their peers.

 

1

 


U.S. Global Investors Funds

(unaudited)

 

The two funds also received special recognition from Morningstar in 2016. USERX earned a 5-Star Overall Rating (as of December 31, among 71 Equity Precious Metals funds, based on risk-adjusted returns), while UNWPX was honored with a 5-Star Rating over the three-year period (again, as of December 31, among 71 Equity Precious Metals funds, based on risk-adjusted returns).

 

Gold should continue to be supported in 2017 by even deeper negative real rates, which could fall to their lowest level in two years as inflation outpaces nominal interest rate increases, according to UBS. In October, Federal Reserve Chair Janet Yellen suggested there might be some benefit in allowing inflation to exceed the central bank’s target rate of 2 percent before another hike is considered, which is good news for gold. Numerous times in the past I’ve shown that the yellow metal has tended to rise when real rates—what you get when you subtract inflation from the federal funds rate—fell into negative territory.

 

Global Manufacturing Improved, Supporting Commodity Prices

 

Commodities were the second-best asset class last year, responding to improved manufacturing activity and trade volumes around the world. Global manufacturing expanded for the fourth straight month in December, reaching 52.7, its highest reading since February 2014.

 

 

Purchasing manager’s index (PMI) readings for the U.S., Germany, Japan and the eurozone all recorded their highest posts in at least a year after building on a strengthening uptrend that had been in place since September. International trade volume expansion hit a 27-month high in December. And despite the “negative” consequence of Brexit, the U.K. Manufacturing PMI posted an amazing 56.1, up from 53.4 in November.

 

2

 


U.S. Global Investors Funds

(unaudited)

 

Despite a strengthening dollar, commodity prices remained relatively resilient, presumably on hopes that Trump’s proposed $1 trillion infrastructure spending package would be realized.

 

Year after year, the Periodic Table of Commodity Returns continues to be one of our most popular pieces. You can find the full-color, high-resolution version on our website, www.usfunds.com.

 

 

China’s commodities trading volume was also impressive in 2016. For the seventh consecutive year, the Asian giant maintained its rank as the biggest importer of raw materials. This helped solidify China’s role as the world’s top engine of economic growth, contributing an estimated 33.2 percent to global economic expansion in 2016, according to China’s National Bureau of Statistics.

 

Small Business Optimism Soared to 12-Year High

 

Here in the U.S., President Trump’s pledge to lower taxes and slash regulations is working wonders for business optimism. In December, the Index of Small Business Optimism soared a phenomenal 7.4 points to 105.8, its highest reading since 2004. The National Federation of Independent Business (NFIB), which conducts the survey, reported that attitudes toward capital spending and job creation in particular surprised to the upside.

 

3

 


U.S. Global Investors Funds

(unaudited)

 

 

Small-cap stocks, as measured by the Russell 2000 Index, surged on bets that Trump’s “America First” policies will benefit domestics with limited exposure to foreign markets, more so than multinational blue-chip stocks.

 

 

4

 


U.S. Global Investors Funds

(unaudited)

 

The president’s proposals are aggressively inward-facing, which bodes well for companies with little foreign exposure. As a group, small caps have far less exposure to foreign markets than larger, multinational companies do. Because they rely a lot less on exports, they’re not as negatively affected by a strong U.S. dollar, which has the effect of making American-made products more expensive for foreign buyers.

 

New Models for Our Domestic Equities Funds

 

We’re committed to taking advantage of this upside, which is why we adjusted and dramatically improved the methodology for our two domestic equities funds, the All American Equity Fund (GBTFX) and the Holmes Macro Trends Fund (MEGAX).

 

Among other changes, we seek to capture the performance of the “growthiest” companies in All American’s benchmark, the S&P 500 Index, by focusing on those whose most recent quarter’s sales per share is greater than the average of the previous four quarters. So if a company’s average sales per share for the past four quarters is $30, let’s say, it needs to show something higher than that in the current quarter to be considered. We want the most active, productive companies on a per-share basis, and we’ve found that sales per share (also known as revenue per share) is one of the best ways to measure this.

 

The benchmark for MEGAX is the S&P Composite 1500 Index, which introduces small- and mid-cap stocks to our universe of investable companies. Again, many of these stocks have been among the best performers since the November election.

 

Mid-cap companies are especially attractive because they’ve reached a point in their enterprise life cycle where the challenges inherent to smaller companies—raising capital early on and managing capacity growth, for example—are mostly behind them. At the same time, they remain dynamic enough for rapid growth to be possible.

 

That’s why mid-cap stocks now account for 40 percent of our new MEGAX model. Meanwhile, 36 percent is in small caps, the remaining 24 percent in large caps.

 

We’re very excited about the changes and have a lot of confidence in them going forward.

 

Warren Buffett’s Big Bet on Airlines

 

After years of deriding the airline industry, billionaire investor Warren Buffett confirmed in November that his holding company invested nearly $1.3 billion in the four big-name domestic carriers.

 

This was a dramatic reversal for the 86-year-old investing wizard, who previously called the airline industry a capital “death trap” and once joked that investors would have been served well had Orville Wright’s plane been shot down at Kitty Hawk.

 

5

 


U.S. Global Investors Funds

(unaudited)

 

The thing is, Buffett held these opinions long before airlines began making the fundamental changes that would flip their fortunes from bankruptcy to record profitability. When Buffett first tried his hand at making money in the aviation industry in 1989, airlines were still struggling in a fiercely competitive marketplace.

 

But following the massive wave of industry consolidation between 2005 and 2010, a new business environment emerged, one characterized by disciplined capacity growth, new sources of revenue, greater efficiency and a commitment to repairing balance sheets.

 

Buffett professes to like airlines now for the same reason he’s long been a fan of railroads—namely, the barriers to entry are extremely high if not entirely impenetrable to new competitors. This is the “moat” Buffett refers to when talking about rail. What’s more, as a value investor, he prefers inexpensive stocks, and among industrials, airlines were cheapest of all, based on price-to-earnings and cash flow.

 

 

Muni Bonds a Key to Making America Great Again

 

Again, President Trump has proposed a spending package as high as $1 trillion over the next 10 years. Although the private sector will be expected to finance a large portion of the work, massive amounts of public debt will be necessary.

 

6

 


U.S. Global Investors Funds

(unaudited)

 

As such, this could be a “very big item for the muni market in the coming years,” according to John Vahey, managing director of federal policy for Bond Dealers of America, a trade association for fixed-income dealers. Demand is high at the moment. On Election Day alone, U.S. voters approved $55.7 billion in new debt, the highest single-day issuance since 2008.

 

Even though rates were lifted only 0.25 percent in December, it’s important to be aware that when rates rise, bond prices fall. At first glance, this inverse relationship might seem illogical, but it makes sense. If newly-issued bonds carry a higher yield, the value of existing bonds with lower rates declines.

 

That’s why investors should consider taking advantage of shorter-duration, investment-grade munis, which are less sensitive to rate increases than longer-term bonds whose maturities are further out.

 

Our Near-Term Tax Free Fund (NEARX) invests primarily in high-quality, investment-grade muni bonds in attractive jurisdictions. We believe after all, a well-structured, diversified portfolio—one that also includes munis—is still the most prudent strategy going forward.

 

To get the latest insights and commentary on gold and other commodities, emerging markets, municipal bonds and much, much more, subscribe to our Investor Alert and to my personal CEO blog, Frank Talk. Both can be reached by visiting usfunds.com.

 

Thank you for your continued trust and confidence in U.S. Global Investors.

 

Happy investing!

 

 

Frank E. Holmes
CEO and Chief Investment Officer
U.S. Global Investors, Inc.

 

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. The Funds are distributed by Foreside Fund Services, LLC. U.S. Global Investors is the investment adviser.

 

7

 


U.S. Global Investors Funds

(unaudited)

 

Gold and Precious Metals Fund

World Precious Minerals Fund

Overall/71

Overall/71

3-Year/71

3-Year/71

5-Year/64

5-Year/64

10-Year/46

10-Year/46

 

Morningstar ratings based on risk-adjusted return and number of funds
Category: Equity Precious Metals
Through: 12/31/2016

 

The Morningstar Rating™ for funds, or “star rating”, is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.

 

Bond funds are subject to interest-rate risk; their value declines as interest rates rise. Though the Near-Term Tax Free Fund seeks minimal fluctuations in share price, it is subject to the risk that the credit quality of a portfolio holding could decline, as well as risk related to changes in the economic conditions of a state, region or issuer. These risks could cause the fund’s share price to decline. Tax-exempt income is federal income tax free. A portion of this income may be subject to state and local taxes and at times the alternative minimum tax. 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.

 

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

 

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% to 10% of your portfolio in these sectors.

 

The S&P 500 Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies. 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 MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance

 

8

 


U.S. Global Investors Funds

(unaudited)

 

in the global emerging markets. The Russell 2000 Index is a U.S. equity index measuring the performance of the 2,000 smallest companies in the Russell 3000. The Russell 3000 Index consists of the 3,000 largest U.S. companies as determined by total market capitalization. The S&P Composite 1500 is a broad-based capitalization-weighted index of 1500 U.S. companies and is comprised of the S&P 400, the S&P 500 and the S&P 600. The index was developed with a base value of 100 as of December 30, 1994.

 

The JPMorgan Global Manufacturing Purchasing Manager’s Index is an indicator of the economic health of the global manufacturing sector. The PMI index is based on five major indicators: new orders, inventory levels, production, supplier deliveries and the employment environment.

 

The Small Business Optimism Index is compiled from a survey that is conducted each month by the National Federation of Independent Business (NFIB) of its members.

 

U.S. Global Investors is not affiliated with Warren Buffett or Berkshire Hathaway.

 

The sections labeled Portfolio of Investments contain complete lists of the funds’ holdings.

 

There is no guarantee that the issuers of any securities will declare dividends in the future or that, if declared, will remain at current levels or increase over time.

 

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

 

9

 


Definitions for Management Teams’ Perspectives

(unaudited)

 

Benchmark Index Definitions

 

Returns for indices reflect no deduction for fees, expenses or taxes, unless noted.

 

The Bloomberg Barclays U.S. Treasury Bills 6-9 Months Total Return Index tracks the performance of U.S. Treasury Bills with a maturity of six to nine months.

 

The Bloomberg Barclays 3-Year Municipal Bond Index is a total return benchmark designed for municipal assets. The index includes bonds with a minimum credit rating of BAA3, are issued as part of a deal of at least $50 million, have an amount outstanding of at least $5 million and have a maturity of two to four years.

 

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 Hang Seng Composite Index is a market-capitalization weighted index that covers about 95% of the total market capitalization of companies listed on the Main Board of the Hong Kong Stock Exchange.

 

The MSCI Emerging Markets Europe 10/40 Index (Net Total Return) 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 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 S&P Global Natural Resources Index (Net Total Return) includes 90 of the largest publicly-traded companies in natural resources and commodities businesses that meet specific investability requirements, offering investors diversified, liquid and investable equity exposure across 3 primary commodity-related sectors: Agribusiness, Energy, and Metals & Mining. 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 S&P 500 Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies.

 

The S&P Composite 1500 Index is a broad-based capitalization-weighted index of 1500 U.S. companies and is comprised of the S&P 400, the S&P 500 and the S&P 600.

 

10

 


Definitions for Management Teams’ Perspectives

(unaudited)

 

Other Index Definitions

 

The Bloomberg Commodity Index is made up of 22 exchange-traded futures on physical commodities. The index represents 20 commodities, which are weighted to account for economic significance and market liquidity.

 

The Caixin China Manufacturing Purchasing Manager’s Index is a composite indicator designed to provide an overall view of activity in the manufacturing sector and acts as a leading indicator for the whole economy. When the PMI is below 50.0 this indicates that the manufacturing economy is declining and a value above 50.0 indicates an expansion of the manufacturing economy.

 

The MSCI All Country Far East Free ex Japan Index is a free float-adjusted market capitalization-weighted index that is designed to measure the equity market performance of the Far East, excluding Japan. The index consists of the following developed and emerging market country indices: China, Hong Kong, Indonesia, Korea, Malaysia, the Philippines, Singapore, Taiwan and Thailand.

 

The Purchasing Manager’s Index (PMI) is an indicator of the economic health of the manufacturing sector. The PMI index is based on five major indicators: new orders, inventory levels, production, supplier deliveries and the employment environment.

 

The Shanghai Composite Index is an index of all stocks that trade on the Shanghai Stock Exchange.

 

The U.S. Trade Weighted Dollar Index provides a general indication of the international value of the U.S. dollar.

 

11

 


U.S. Government Securities Ultra-Short Bond Fund

(unaudited)

 

Management Team’s Perspective

 

Introduction

 

The U.S. Government Securities Ultra-Short Bond Fund (UGSDX) is designed to be used as an investment that takes advantage of the security of U.S. Government bonds and obligations, while simultaneously pursuing a higher level of current income than money market funds offer. The fund’s dollar-weighted average effective maturity is two years or less.

 

Performance Graph

 

U.S. Government Securities Ultra-Short Bond Fund

Average Annual Performance

For the Years Ended
December 31, 2016

 

One Year

Five Year

Ten Year

U.S. Government Securities Ultra-Short Bond Fund

0.47%

0.24%

0.78%

Bloomberg Barclays U.S. Treasury Bills 6-9 Months Total Return Index

0.49%

0.20%

0.40%

Performance data quoted above is historical. Past performance is no guarantee of 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 an investor’s shares, when redeemed, may be worth more or less than their original cost. The graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. For all or a portion of the periods, the fund had expense limitations and reimbursements to maintain a minimum yield, without which returns would have been lower.

The above returns for the U.S. Government Securities Ultra-Short Bond Fund include the fund’s results as a money market fund through the date of its conversion (December 20, 2013) to an ultra-short bond fund, and therefore are not representative of the fund’s results had it operated as an ultra-short bond fund for the full term of the periods shown.

Gross expense ratio as stated in the most recent prospectus is 1.13%. Pursuant to a voluntary arrangement, the Adviser has agreed to limit total fund operating expenses (exclusive of any acquired fund fees and expenses, performance fees, taxes, brokerage commissions and interest) to not exceed 0.45%. The Adviser can modify or terminate this arrangement at any time. In addition, returns may include the effects of additional voluntary waivers of fees and reimbursements of expenses by the Adviser, including waivers and reimbursements to maintain a minimum net yield for the fund.

See Definitions for Management Teams’ Perspectives for index definitions.

Please visit our website at www.usfunds.com for updated performance information for different time periods.

 

12

 


U.S. Government Securities Ultra-Short Bond Fund

(unaudited)

 

The Year in Review – Economic and Political Issues that Affected the Fund

 

Despite no tangible change in economic fundamentals, the risk-off sentiment that dominated the beginning of the year completely reversed by the first quarter’s end. To start the year, depressed oil prices and global growth concerns, particularly in China, led to significant spread widening across the credit markets, a sharp drop in equity markets and a rally in Treasuries. However, the market rebounded in mid-February on little data, causing oil prices to rise by nearly 10 percent, the S&P 500 Index to post a positive 1.2 percent return, and high-yield debt to recover amidst significant inflows. Poor liquidity conditions exacerbated market volatility in the first quarter. The depth to which the markets fell and the speed at which prices rebounded without any significant fundamental catalyst are evidence of the challenges investors face in the illiquid environment. Trading volumes have failed to keep pace with an increase in issuance across corporate and sovereign bonds, increasing the likelihood that smaller trading volumes will have an outsize impact on market pricing. Given the volatility that dominated the beginning of the year and increasing evidence of a slowing U.S. economy, the market largely expected the Federal Reserve (the Fed) to keep rates on hold at its March meeting. The Fed delivered, keeping the benchmark lending rate steady at between 0.25 and 0.50 percent. The Fed emphasized the uncertainty surrounding the outlook and the rising risks from abroad as some of the key factors weighing on its decision. Furthermore, Fed officials scaled back its forecast for rate hikes during the remainder of the year, expecting to raise rates twice in 2016, compared to their December 2015 projection of four times. By focusing on financial market turmoil as a key element that factored into its decision, the Fed appeared to be reversing course on the importance of market volatility. Previously, the Fed dismissed volatility in oil prices or markets as a normal phenomenon that did not drive policy. Now, the Fed stated it is uncomfortable raising rates in the context of market volatility like that seen during the first quarter.

 

The second quarter saw the unprecedented phenomenon of more than $10 trillion in negative-yielding government debt stretching around the world, defying the boundaries of what should be possible according to traditional economics. Central banks’ pumping continued monetary stimulus, coupled with weak fundamentals, drove markets to extreme levels. Concerns over a number of potential tail risks during previous months resulted in intense market volatility with sharp selloffs, followed by exuberant rallies. The Brexit surprise was the latest such event that appeared on most investors’ list of concerns, and if realized, was expected to result in a market selloff. While a selloff did occur, it was only a moderate one over a period of just two days. A rally then persisted not only for risky assets but U.S. Treasuries as well. This trend was representative of broader forces at work, all of which resulted in increased market volatility. As investors awaited the remaining half of the year, there were many potential market disruptors that included the U.S. elections, other referendums (Scotland, Catalonia), potential policy error by the Fed, China’s economic rebalancing, sluggish global growth, troubled Italian banks, negative

 

13

 


U.S. Government Securities Ultra-Short Bond Fund

(unaudited)

 

interest rate policies (NIRP) and other geopolitical events. As disruptive as it was, NIRP ironically had a silver lining. The lack of yield across the globe implied that U.S. fixed income markets were one of the world’s most attractive, particularly on a risk adjusted basis. This was reflected in the strong performance of U.S. fixed income during the second quarter. The U.S. Treasury curve flattened, with 10+ year maturity bonds exhibiting declines of 30 basis points (bps) or more. The 10-year ended the quarter at 1.47 percent. Corporate bond performance, maintaining the momentum from the first quarter, was mostly positive with energy and metals & mining leading the charge. Spreads shrugged off the Brexit vote late in June.

 

The month of September was dominated by central bank meetings as the Federal Reserve, Bank of Japan, European Central Bank (ECB) and the Bank of England all held policy meetings. Importantly, the sentiment around September’s meetings was a bit different than in past years as the market started to question the efficacy of further central bank easing. Judging by Treasury market price action, the aggregate of global central bank action for September left the market wanting as Treasury yields finished lower on the month. The release of the September statement showed a Fed that hoped a tightening could be warranted in December. It was apparent from the release of the staff economic projections that hiking aspirations for 2017 and beyond were significantly more tepid than they were previously. The staff’s forecasts for the fed funds rate called for one rate hike in 2016 (down from two before), two hikes in 2017 (down from three before) and three hikes in 2018 (same as before). These downward revisions suggested the notion that monetary policy is less accommodative at current levels than previously thought was beginning to take hold inside the Federal Reserve Open Market Committee (FOMC).

 

While the ECB elected to ease policy in roundabout fashion at their December policy meeting, the FOMC decided to tighten policy at its own December meeting, raising the policy rate from 25-50 bps to 50-70 bps. This move did not come as much of a surprise to market participants, as it was fully priced into fed funds future contracts prior to the meeting. Similarly, the release of the FOMC statement was very much as expected, delivering an even-handed, non-committal assessment of the U.S. macroeconomic backdrop. However, the Fed did deliver one final surprise to the market in the form of an upgrade to the policy-tightening forecast for 2017. The median participant now looks for three hikes in 2017, up from two in September, and the mean outlook for the funds rate at the end of next year was revised up 7 bps from 1.31 percent to 1.38 percent. The level of the funds rate projection for 2018 and 2019 was shifted up slightly, though the pace of hikes in those years was generally little changed from the September projections. Interestingly, this upgraded 2017 tightening guidance did not come with any upgrades to the FOMC’s economic forecast projections. The Fed expects slightly better growth next year of 2.1 percent versus its prior forecast of 2 percent. The 2018 growth forecast was left unchanged at 2 percent. Despite offering minimal forward guidance, the 25 bps policy tightening seemed to temporarily reawaken the animal spirits in the U.S. Treasury market as yields surged higher, led by the middle segment of the curve.

 

14

 


U.S. Government Securities Ultra-Short Bond Fund

(unaudited)

 

Investment Highlights

 

The U.S. Government Securities Ultra-Short Bond Fund returned 0.47 percent for the year ended December 31, 2016, underperforming its benchmark, the Bloomberg Barclays U.S. Treasury Bills 6-9 Months Total Return Index, which returned 0.49 percent.

 

The fund shortened its maturity profile toward the latter half of 2016 as interest rates on short-term agency securities moved higher in anticipation of the Fed’s rate hike and after the U.S. election. This allowed the fund to mitigate losses.

 

Current Outlook

 

Interest rates rose much further and faster than expected in 2016. From a post-Brexit low of 1.37 percent in July, the benchmark 10-year Treasury yield hit a high of 2.64 percent in December, after the Fed hiked the fed funds rate for the first time all year, and indicated that it may raise it three more times in 2017. Elections and geopolitical events around the world seem to be pointing to a paradigm shift. Populist forces eager for faster growth have led to a shift from monetary policy to fiscal stimulus. In the U.S., expectations are running high that the pro-growth policies of Donald Trump will lead to a more hawkish Fed and higher rates.

 

The section labeled Portfolio of Investments contains a complete list of the fund’s holdings.

 

Portfolio Allocation by Issuer
Based on Total Investments

December 31, 2016

 

Portfolio Allocation by Maturity

 

December 31, 2016

 

6 – 12 Months

 

$

40,778,171

     

74.5

%

1 – 2 Years

   

13,940,322

     

25.5

%

   

$

54,718,493

     

100.0

%

                 

 

15

 


Near-Term Tax Free Fund

(unaudited)

 

Management Team’s Perspective

 

Introduction

 

The Near-Term Tax Free Fund (NEARX) seeks to provide a high level of current income exempt from federal income taxation and to preserve capital. However, a portion of any distribution may be subject to federal and/or state income taxes. The Near-Term Tax Free Fund will maintain a weighted average maturity of less than five years.

 

Performance Graph

 

Near-Term Tax Free Fund

Average Annual Performance

For the Years Ended
December 31, 2016

 

One Year

Five Year

Ten Year

Near-Term Tax Free Fund

-0.45%

1.40%

2.69%

Bloomberg Barclays 3-Year Municipal Bond Index

0.08%

1.13%

2.71%

Performance data quoted above is historical. Past performance is no guarantee of 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 an investor’s shares, when redeemed, may be worth more or less than their original cost. The graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. For all or a portion of the periods, the fund had expense limitations, without which returns would have been lower.
Gross expense ratio as stated in the most recent prospectus is 1.09%. The Adviser has contractually agreed to limit total fund operating expenses (exclusive of any acquired fund fees and expenses, performance fees, taxes, brokerage commissions and interest) to not exceed 0.45% on an annualized basis through April 30, 2017.
See Definitions for Management Teams’ Perspectives for index definitions.
Please visit our website at www.usfunds.com for updated performance information for different time periods.
 

16

 


Near-Term Tax Free Fund

(unaudited)

 

The Year in Review – Economic and Political Issues that Affected the Fund

 

Municipal bond yields declined during the first quarter of the year, which drove prices higher. A higher exposure to cash, given unattractive yields, was a drag on fund performance. As short-term rates rose and longer-term yields declined, the municipal yield curve flattened. As a result, longer-term bonds outperformed. The front end of the yield curve, in the area with less-than-two-year maturities, had the weakest returns. The fund benefited modestly from its barbell positioning. Within the main sectors, revenue bonds and general obligations outperformed and pre-refunded bonds lagged. Of the largest states, New Jersey had the best returns for the quarter. Illinois outperformed to a lesser extent, and California lagged slightly. Investors’ fears about falling commodity prices, a slowing Chinese economy and market volatility abated during the first quarter, which led to a greater appetite for risk and allowed lower-rated and longer-maturity bonds to outperform. The fund’s large exposure to higher quality bonds was a source of underperformance. While overall credit fundamentals remain sound, specific issuers were newsworthy. Illinois remained without a state budget, and the impasse continued to pressure state universities and the Chicago Board of Education, among others. Energy-producing states North Dakota, Alaska and Louisiana were downgraded in response to ongoing weakness in oil prices. Draft legislation from the U.S. House of Representatives was set to allow Puerto Rico to restructure some of its $70 billion debt under a federal oversight board, and this legislation was slated to be formally introduced to the U.S. Congress in April.

 

The second quarter saw unprecedented geopolitical outcomes. Most notably, in a historic decision, the U.K. voted to exit the European Union. Despite polls showing a close race, markets were taken aback by the “leave” decision and sold off sharply. The pound dropped 12 percent to a 30-year low. Global stock markets also suffered large corrections. Meanwhile, global rates saw immediate flight-to-safety moves with the 10-year U.S. Treasury yield touching 1.40 percent and German 10-year yields reaching negative 0.16 percent. In U.S. markets, the dollar, U.S. Treasuries and equities saw the greatest price impacts following the Brexit vote, but they rebounded quickly as fears faded that Brexit was a new “Lehman moment.” Central banks stepped in to backstop risk by providing ample liquidity to the market, but the 10-year U.S. Treasury yield remained hovering around 1.5 percent, roughly 30 bps below where it was pre-Brexit, reflecting the significant uncertainty that still hung over the market. With nearly 50 percent of global fixed income securities yielding 1 percent or lower, the search for yield drove investors into riskier assets and overshadowed worsening fundamentals. During the quarter, the spread between the 2-year Treasury note and the 10-year was less than 90 bps, the lowest level since 2007. In contrast to previous episodes of curve flattening, which were driven by Federal Reserve rate hikes on the front end, this instance of curve flattening was driven by a rally in 10-year rates. Amid worries about jobs growth and low inflation, the Fed opted to hold off on a rate hike at the June meeting. Bringing its views more in line with market expectations, the Fed revised its forecast for growth in

 

17

 


Near-Term Tax Free Fund

(unaudited)

 

2016, from 2.2 percent to 2 percent, and lowered projections of future rate increases. As of the June meeting, most members still anticipated two hikes, though a greater number of officials forecasted just one increase. In municipal market developments, the U.S. Senate passed the bill protecting Puerto Rico from creditors. The legislation created a financial control board to help restructure the island’s $70 billion in debt and oversee its finances, marking the largest federal intervention ever into the U.S. municipal bond market. Illinois had its bond ratings dropped to levels not seen for a U.S. state in over a decade because of a protracted political deadlock that had left it veering toward its second straight year without a budget. Moody’s cut its grade on about $28.8 billion of general-obligation and sales-tax debt by one level to Baa2, its lowest for a state since Massachusetts in 1992. S&P Global Ratings followed by dropping it one step to BBB+. Atlantic City got a lifeline as New Jersey Governor Chris Christie signed two bills that pulled the city from the brink of bankruptcy and gave it about five months to right its finances, a task that if unmet would result in an unprecedented state takeover. The measures infused Atlantic City with enough cash to pay bills and workers through October. Officials had until then to craft a five-year plan to restore fiscal stability. Tennessee was awarded a AAA general-obligation bond rating from S&P Global Ratings, which cited the strengthening state economy, growing reserves and consistent payment of its required contribution to the state’s pension system. It became the eighth state to receive the top bond rating ranking from both S&P Global Ratings and Moody’s. The others are Delaware, Maryland, Missouri, North Carolina, Texas, Utah and Virginia.

 

As was widely expected, in their September meeting, the Federal Reserve’s Open Market Committee (FOMC) opted to keep the federal funds rate unchanged. Fed Chair Janet Yellen and her allies maintained that employment and inflation data did not warrant an increase and they continued to resist pressures to tighten monetary policy. While the Fed was reluctant to act, the end of the lower-for-longer era of U.S. central bank policy appeared to be drawing closer and a December rate hike looked likely. The FOMC upgraded its assessment of near-term risks, describing them as “roughly balanced.” The Fed also clearly signaled its intent in its Summary of Economic Projections by showing a preponderance of participants still expected an increase in 2016. Investors’ focus for the remainder of the quarter shifted toward the November elections and December’s FOMC meeting. In state and municipal government news, a report from Moody’s evaluated the impact of low oil and gas prices on energy-dependent state and local governments. It noted that the hardest hit states were Alaska, Louisiana, North Dakota, Oklahoma and New Mexico. In other news, Chicago approved a plan to raise the city’s water and sewer taxes to shore up its pension funds. The plan calls for a hike in the taxes of about 33 percent over five years. California had its credit rating raised by Fitch Ratings to AA- because of the strength of its economy and strong budget management. Lastly, in a report analyzing the fiscal resilience among U.S. states, S&P Global Ratings deemed Illinois, Pennsylvania, New Jersey and Connecticut to have “only a limited capacity” to withstand the effect of a moderate recession. The report also found Washington, Florida and New York as the best positioned.

 

18

 


Near-Term Tax Free Fund

(unaudited)

 

November’s surprise election outcome proved to be a boon for risk assets and a bust for so-called “safe havens,” including Treasuries and municipal bonds. Muni prices sank as a result of a rally in yields and, to a lesser degree, concerns over future infrastructure spending and tax policies. It was the market’s worst performance month since the 2008 financial crisis. Fund flows, a measure of demand, turned sharply negative, ending 56 weeks of inflows. More than $10 billion left muni funds in November. The California Public Employees’ Retirement System (CalPERS), the nation’s largest public pension fund, voted to reduce its discount rate or rate of return on its investments from 7.5 percent to 7 percent over the next three years. CalPERS determined that achieving a 7.5 percent investment return over the next 10 years would be a significant challenge. Reducing the discount rate will undoubtedly result in higher contribution rates for California local governments that participate in the CalPERS plan. Furthermore, CalPERS’ decision to lower its discount rate has far reaching implications beyond California to the broader state and local government sector. Given the size of the fund (more than $300 billion), CalPERS has been a bellwether for investment trends at other public plans. Any change it makes will likely influence others to follow suit and lower their own discount rates, which, in turn, will result in incremental credit pressure for the sector. Overall, rating agencies do a good job of incorporating the implications of changes in discount rate assumption into their analysis by using their own hypothetical standardized discount rates to calculate the unfunded pension liabilities. However, the ratings don’t necessarily fully incorporate the potential budgetary impact of a reduction in discount rates. As a result, as broader public pension funds continue to reduce discount rates, state and local governments will likely feel incremental negative ratings pressure.

 

Investment Highlights

 

For the year ended December 31, 2016, the Near-Term Tax Free Fund returned -0.45 percent, underperforming its benchmark, the Bloomberg Barclays 3-Year Municipal Bond Index, which gained 0.08 percent.

 

Strengths

 

Buying opportunistically during multi-standard deviation moves in the municipal bond market and letting the yield advantage work in the fund’s favor over time has proven to be advantageous, as has the fund’s low turnover approach.

 

The fund benefited from its allocation to bonds from New York, New Hampshire and New Jersey.

 

The fund benefited from its allocation to medical and higher education bonds.

 

Weaknesses

 

The fund was negatively impacted from an overweight position in Texas bonds, which underperformed.

 

The fund’s exposure to general obligation bonds underperformed.

 

19

 


Near-Term Tax Free Fund

(unaudited)

 

The fund was hurt by its exposure to the longer end of the yield curve, which underperformed the shorter end.

 

Current Outlook

 

Opportunities

 

Concerns about overburdened pensions place increasingly more pressure on troubled state’s general obligation bonds. As a result, focusing on high quality essential revenue bonds instead of general obligation bonds is likely to be an area of opportunity.

 

Threats

 

Tax reform, which has been a Republican priority, is likely to garner increasing interest. While the value of tax exemption would be lessened if the top marginal tax rate were reduced from 39.6 percent to 33 percent, the correction necessary to overcome this lower-tax environment is likely to be manageable. While the elimination of the tax exemption is unlikely, it poses a major threat to the municipal market.

 

The section labeled Portfolio of Investments contains a complete list of the fund’s holdings.

 

Top 10 Area Concentrations
(Based on Net Assets)

December 31, 2016

Texas

23.95%

New York

9.54%

Washington

8.90%

Florida

5.21%

Illinois

4.48%

Michigan

3.86%

Pennsylvania

3.17%

New Jersey

3.16%

California

2.68%

Missouri

2.38%

Total Top 10 Areas

67.33%

 

20

 


Near-Term Tax Free Fund

(unaudited)

 

Municipal Bond Ratings*
Based on Total Municipal Bonds

December 31, 2016

 

*

Credit quality ratings are measured on a scale that generally ranges from AAA (highest) to D (lowest). “Not Rated” is used to classify securities for which a rating is not available. Credit-quality ratings for each issue are obtained from Moody’s and S&P Global Ratings, and the higher rating for each issue is used.

 

21

 


All American Equity Fund & Holmes Macro Trends Fund

(unaudited)

 

Management Team’s Perspective

 

Introduction

 

The principal objective of the All American Equity Fund (GBTFX) is to seek capital appreciation by investing primarily in a broadly diversified portfolio of domestic common stocks. The fund invests in large-capitalization stocks while retaining the flexibility to seek out promising individual stock opportunities, including stocks with meaningful dividend yields.

 

The Holmes Macro Trends Fund (MEGAX) invests in companies with good growth prospects and strong positive earnings momentum. The fund’s primary objective is to seek long-term capital appreciation.

 

Performance Graphs

 

All American Equity Fund

Average Annual Performance

For the Years Ended
December 31, 2016

 

One Year

Five Year

Ten Year

All American Equity Fund

-0.14%

8.12%

4.10%

S&P 500 Index

11.96%

14.66%

6.95%

Performance data quoted above is historical. Past performance is no guarantee of 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 an investor’s shares, when redeemed, may be worth more or less than their original cost. The graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. For all or a portion of the periods, the fund had expense limitations, without which returns would have been lower.

Gross expense ratio as stated in the most recent prospectus is 1.94%. Pursuant to a voluntary arrangement, the Adviser has agreed to limit total fund operating expenses (exclusive of any acquired fund fees and expenses, performance fees, taxes, brokerage commissions and interest) to not exceed 2.20%. The Adviser can modify or terminate this arrangement at any time.

See Definitions for Management Teams’ Perspectives for index definitions.

Please visit our website at www.usfunds.com for updated performance information for different time periods.

 

22

 


All American Equity Fund & Holmes Macro Trends Fund

(unaudited)

 

Holmes Macro Trends Fund

Average Annual Performance

For the Years Ended
December 31, 2016

 

One Year

Five Year

Ten Year

Holmes Macro Trends Fund

8.66%

8.36%

3.70%

S&P Composite 1500 Index

13.03%

14.78%

7.19%

Performance data quoted above is historical. Past performance is no guarantee of 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 an investor’s shares, when redeemed, may be worth more or less than their original cost. The graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. For all or a portion of the periods, the fund had expense limitations, without which returns would have been lower.

Gross expense ratio as stated in the most recent prospectus is 1.81%. Pursuant to a voluntary arrangement, the Adviser has agreed to limit total fund operating expenses (exclusive of any acquired fund fees and expenses, performance fees, taxes, brokerage commissions and interest) to not exceed 2.20%. The Adviser can modify or terminate this arrangement at any time.

See Definitions for Management Teams’ Perspectives for index definitions.

Please visit our website at www.usfunds.com for updated performance information for different time periods.

 

The Year in Review – Economic and Political Issues that Affected the Funds

 

The fundamental manager struggled in 2016 against a sea of macro related surprises. For example, volatility spiked the first few months of the year, Brexit surprised investors in June, the world experienced a surprise outcome with a Donald Trump win in the U.S. presidential election and the Federal Reserve raised rates in December.

 

Despite the macro surprises, U.S. equities performed well, finishing the year with a 11.96 percent gain.

 

23

 


All American Equity Fund & Holmes Macro Trends Fund

(unaudited)

 

The top performing factors in 2015 failed to continue their winning ways in 2016. Returns, balance sheet, size and volatility started off strong early in the year, but reversed and continued to be weak the remainder of the year due to reflationary expectations on investors’ minds. Value was the best performing factor in 2016.

 

In December, the Fed raised its benchmark rate 25 bps. This will be a slight headwind going into 2017, but the Fed believes the economy should remain on its current pace of growth. The Fed is so confident about economic growth, in fact, that it warned about a possible two additional hikes before the end of 2017.

 

Investment Highlights

 

The All American Equity Fund returned -0.14 percent for the year ending 2016, underperforming the 11.96 percent return for the benchmark S&P 500 Index. The Holmes Macro Trends Fund returned 8.66 percent for the year ending 2016, underperforming the 13.03 percent return for the benchmark S&P Composite 1500 Index.

 

Because the funds are actively managed and the holding period is generally not a consideration in investment decisions, the portfolio turnover rate may fluctuate from year to year as the funds adjust their portfolio composition. The funds’ annual portfolio turnovers were, and are expected to continue to be, more than 100 percent.

 

All American Equity Fund

 

Strengths

 

Health care, telecommunication services and utilities were the top three best-performing sectors.

 

Darden Restaurants was the biggest contributor to the fund.

 

The underweighting in telecommunications helped the fund outperform the benchmark’s allocation.

 

Weakness

 

Consumer discretionary, cash and financials were the three allocations that detracted from the fund the most.

 

Tractor Supply Co. was the single largest detractor from the fund.

 

The fund’s underweighting in financials reduced its potential performance.

 

Holmes Macro Trends Fund

 

Strengths

 

The industrials and health care sectors as well as the fund’s ETF allocations were the top contributors to fund performance.

 

24

 


All American Equity Fund & Holmes Macro Trends Fund

(unaudited)

 

LogMeIn was the biggest contributor to the fund.

 

The overweighting in the industrial sector helped the fund outperform the benchmark’s allocation.

 

Weaknesses

 

Materials and energy as well as the fund’s cash allocations were the largest drags on fund performance.

 

Regeneron Pharmaceuticals was the single largest detractor from the fund.

 

The fund’s overweighting in cash reduced potential returns.

 

Current Outlook

 

Opportunities

 

The Donald J. Trump administration has been telegraphing increased infrastructure stimulus. This should bode well for the country’s growth prospects.

 

Global leading indicators continue to improve. This should provide the needed support necessary for investors to feel comfortable with elevated price-to-earnings (P/E) ratios.

 

The continuing combination of improved consumer and business confidence and surging U.S. stock markets should boost investors’ future expectations of the equities growth.

 

Threats

 

U.S. equities are considered to be in an eight-year bull market. It is not unreasonable to anticipate a possible correction.

 

The Federal Reserve is now tasked with returning the benchmark interest rates to “normal” levels. The latest minutes imply possibly two rate hikes in 2017.

 

A large risk to the future outlook of the markets and economy is a negative shock to sentiment.

 

The section labeled Portfolio of Investments contains a complete list of the funds’ holdings.

 

25

 


All American Equity Fund & Holmes Macro Trends Fund

(unaudited)

 

All American Equity Fund

 

Top 10 Equity Holdings (Based on Net Assets)

December 31, 2016

Whirlpool Corp.

3.25%

Appliances

 

Public Storage

3.22%

REITS - Storage

 

Delta Air Lines, Inc.

3.18%

Airlines

 

Phillips 66

3.14%

Oil Companies - Integrated

 

Travelers Companies, Inc.

3.10%

Property/Casualty Insurance

 

CVS Health Corp.

3.10%

Retail - Drug Store

 

PulteGroup, Inc.

3.09%

Building - Residential/Commercial

 

Patterson Companies, Inc.

3.08%

Dental Supplies & Equipment

 

Pfizer, Inc.

3.05%

Medical - Drugs

 

Entergy Corp.

3.05%

Electric - Integrated

 

Total Top 10 Equity Holdings

31.26%

 

Portfolio Allocation by Industry Sector*

Based on Total Investments

December 31, 2016

 

*

Summary information above may differ from the portfolio schedule included in the financial statements due to the use of different classifications of securities for presentation purposes.

 

26

 


All American Equity Fund & Holmes Macro Trends Fund

(unaudited)

 

Holmes Macro Trends Fund

 

Top 10 Equity Holdings (Based on Net Assets)

December 31, 2016

Kimberly-Clark Corp.

5.89%

Consumer Product - Miscellaneous

 

Altria Group, Inc.

5.65%

Tobacco

 

IDEXX Laboratories, Inc.

5.25%

Diagnostic Kits

 

Pool Corp.

4.87%

Distribution/Wholesale

 

Pitney Bowes, Inc.

4.78%

Office Automation & Equipment

 

Tempur Sealy International, Inc.

4.19%

Home Furnishings

 

Lennox International, Inc.

3.95%

Building Products - Air & Heating

 

B/E Aerospace, Inc.

3.70%

Aerospace/Defense - Equipment

 

NewMarket Corp.

3.64%

Chemicals - Specialty

 

Hawaiian Holdings, Inc.

3.47%

Airlines

 

Total Top 10 Equity Holdings

45.39%

 

Portfolio Allocation by Industry Sector*

Based on Total Investments

December 31, 2016

 

*

Summary information above may differ from the portfolio schedule included in the financial statements due to the use of different classifications of securities for presentation purposes.

 

27

 


Global Resources Fund

(unaudited)

 

Management Team’s Perspective

 

Introduction

The Global Resources Fund (PSPFX and PIPFX) is a non-diversified natural resources fund with the principal objective of seeking long-term growth of capital while providing protection against inflation and monetary instability. The fund invests in companies involved in the exploration, production and processing of petroleum, natural gas, coal, alternative energies, chemicals, mining, iron and steel, and paper and forest products around the globe.

 

Performance Graph

 

Global Resources Fund

Average Annual Performance

For the Periods Ended
December 31, 2016

 

One Year

Five Year

Ten Year

Since Inception (Institutional Class)

Global Resources Fund - Investor Class

14.99%

-9.04%

-4.62%

n/a

Global Resources Fund - Institutional Class (Inception 3/1/10)

15.43%

-8.49%

n/a

-4.56%

S&P 500 Index

11.96%

14.66%

6.95%

13.08%

S&P Global Natural Resources Index (Net Total Return)

31.45%

-0.82%

0.55%

-0.60%

Performance data quoted above is historical. Past performance is no guarantee of 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 an investor’s shares, when redeemed, may be worth more or less than their original cost. The graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. For all or a portion of the periods, the fund had expense limitations, without which returns would have been lower.

Gross expense ratio as stated in the most recent prospectus is 1.58% for the Investor Class and 1.35% for the Institutional Class. Pursuant to a voluntary arrangement, the Adviser has agreed to limit total fund operating expenses (exclusive of any acquired fund fees and expenses, performance fees, taxes, brokerage commissions and interest) to not exceed 1.90% for the Investor Class. Also pursuant to a voluntary agreement, the Adviser has agreed to waive all class specific expenses of the Institutional Class. The Adviser can modify or terminate these arrangements at any time.

See Definitions for Management Teams’ Perspectives for index definitions.

Please visit our website at www.usfunds.com for updated performance information for different time periods.

 

28

 


Global Resources Fund

(unaudited)

 

The Year in Review – Economic and Political Issues that Affected the Fund

 

The Bloomberg Commodity Index rose 11.4 percent through the year 2016, posting its first positive year since 2010. All major commodities rallied, with crude oil, copper and gold prices rallying 45, 17.4, and 8.6 percent, respectively. Initial concerns that the global economy was slowing, particularly due to weaker economic data from China, did not materialize. In a sharp contrast to expectations, the global manufacturing sector beat all expectations, and the year in review was marked by a steady upward trajectory in manufacturing activity across the globe. This was evidenced by JP Morgan’s Global Manufacturing PMI barometer, which troughed in February and steadily rose to an 18-month high in December 2016. Both U.S. and Chinese manufacturing activity rallied throughout the year and also ended 2016 on their highest respective points, both denoting solid expansionary momentum.

 

Crude oil’s significant relative outperformance to the broader market was driven by lower U.S. oil production and self-imposed caps by Organization of Petroleum Exporting Nations (OPEC) members. U.S. shale producers slashed production earlier in the year in response to prices below $35 per barrel, removing as many as 600,000 barrels per day from the market, and leading the market closer to a supply-demand balance. Once prices stabilized in the second quarter, stronger manufacturing activity, as well as increasing gasoline demand, supported a price rally back into the $40 to $50 range. In the second half of the year, OPEC took decisive leadership and engineered a self-imposed cap on production, which helped improve sentiment toward the sector by signaling that OPEC members can still work together.

 

The base metals complex, highly susceptible to manufacturing activity globally, rallied as Chinese imports of metals hit new records. Copper, nickel and zinc posted double-digit returns in 2016, a reflection of unexpected record demand for the metals. In addition, markets reacted to a number of supply cuts, mainly in the zinc market, and supply disruptions in the copper and nickel markets, which supported stronger pricing. The metals closed the year near 52-week highs on speculation that a “reflation” trade led by President Donald Trump could drive a demand boost from the metals-intensive infrastructure sector.

 

Gold rose for the first time in four years. The first Federal Reserve rate-hike in the tightening cycle, which happened back in December 2015, gave way to a gold rally, as investors were quick to realize the Fed could not achieve its initial pace for rate hikes, which weighed on the U.S. dollar. Most important, however, was gold’s safe haven status, which helped the metal garner assets after U.K. voters surprisingly voted in favor of an exit from the EU.

 

29

 


Global Resources Fund

(unaudited)

 

Investment Highlights

 

Overview

 

For the year ended December 31, 2016, the Investor Class of the Global Resources Fund returned 14.99 percent and the Institutional Class returned 15.43 percent, trailing the fund’s benchmark, the S&P Global Natural Resources Index (Net Total Return) (SPGNRUT), which rose 31.45 percent.

 

The fund employed a defensive investment position from time to time in the past year with higher-than-average cash balances on hand to protect the liquidity of the fund. However, to maintain varying degrees of investment exposure to the commodities market, the fund utilized a number of rolling call option positions to hedge the fund’s benchmark risks and provide optionality to upswings in commodities stocks.

 

Because the fund is actively managed and holding period is generally not a consideration in investment decisions, the portfolio turnover rate may fluctuate from year to year as the fund adjusts its portfolio composition. The fund’s annual portfolio turnover was, and is expected to continue to be, more than 100 percent.

 

Strengths

 

The fund’s overweighting in precious metals, construction materials and junior natural resource stocks, as well as its underweight in fertilizers and chemicals, paper and forest and oil exploring and developer stocks had a positive contribution to the fund relative to its benchmark.

 

The fund had superior stock selection in oil explorers and developers, precious metals, construction materials, industrials and fertilizer and chemicals’ sectors. This superior stock selection resulted in positive contribution to the fund relative to its benchmark.

 

The securities that provided the highest contribution to the fund were Klondex Mines, Gran Colombia Gold, Richmont Mines and Claude Resources.

 

Weaknesses

 

The fund’s overweighting in industrials, agribusiness, oil and gas refining and renewable stocks, as well as its underweighting in base and industrial metals stocks, had a negative contribution to the fund relative to its benchmark.

 

The fund had inferior stock selection in the base and industrial metals sector, the oil and gas refining sector, the oil services sector, paper and forest companies and the integrated oil sector.

 

The securities that resulted in the largest negative contribution to the fund were Atlas African Industries, Pacific Green Energy, Doray Minerals, DHT Holdings and Pacific Infrastructure.

 

30

 


Global Resources Fund

(unaudited)

 

Current Outlook

 

Opportunities

 

Commodity prices may continue to rally as supply and demand dynamics are tightening, according to Citigroup. With 2016 almost in the books, commodities are posting their best annual performance in over five years. The trend should continue in 2017, says Citigroup, a bank which has been notoriously bearish on commodities, by stating that “there is absolutely no doubt that commodity markets are at a turning point.”

 

The Brent forward curve is signaling that oil storage tanks will start emptying the second half of 2017, according to oil traders surveyed by Reuters. As crude oil trades range bound and overhang continues to exist in inventories, higher demand in the future is slowly starting to emerge where oil fundamentals may turn bullish in late 2017.

 

2016 led rallies in zinc and coal, but 2017 could be the year of nickel and oil. Nickel will be finishing 2016 with a rally of 22 percent; however, developments such as the Philippines President Rodrigo Duterte’s rally against mining companies and Indonesia’s export ban may dramatically hamper the metals fundamentals and create a severe supply shortage.

 

Threats

 

China may fall short of its 6.5 percent in economic growth objective according to president Xi Jinping. Xi stated that the country doesn’t need to meet its objective if doing so will create too much systematic risk and jeopardize its long term growth prospects. In 2015 policymakers pledged an annual growth rate of at least 6.5 percent through 2020. Falling short of its growth objectives will have negative ramifications for industrial metals demand, a negative read-through for base metals.

 

Commodity prices may be susceptible to major swings in 2017 as commodity exporting nations prepare for the potential of protectionist measures in the U.S. Following the victory of President Donald Trump, markets have reacted to a stronger U.S. dollar and are making preparations for potential protectionist policies against their imports. Some economic commentators have warned that a wave of protectionist measures may sink the world into a global recession, with negative implications for commodity prices.

 

General Motors is temporarily idling five U.S. assembly plants in an attempt to reduce bloated inventories. The sector has experienced rapid growth over the past five years as a result of cheap consumer financing; however, interest rates on car loans are slowly rising while terms are much longer than before. According to the research organization IHS Automotive, sales could slide by more than 200,000 vehicles if the company permanently suspends production from these plants—a negative read-through for platinum group metals and steel demand.

 

The section labeled Portfolio of Investments contains a complete list of the fund’s holdings.

 

31

 


Global Resources Fund

(unaudited)

 

Top 10 Equity Holdings (Based on Net Assets)

December 31, 2016

Klondex Mines Ltd.

7.09%

Gold Mining

 

Pacific Infrastructure Ventures, Inc.

5.23%

Real Estate Operating/Development

 

Regis Resources Ltd.

1.63%

Gold Mining

 

Northern Star Resources Ltd.

1.43%

Gold Mining

 

Resolute Mining

1.43%

Gold Mining

 

Nippon Light Metal Holdings Co., Ltd.

1.42%

Metal - Aluminum

 

Interfor Corp.

1.39%

Forestry

 

Evolution Mining Ltd.

1.34%

Gold Mining

 

Nevsun Resources Ltd.

1.34%

Metal - Copper

 

Vestas Wind Systems A.S.

1.33%

Energy - Alternate Sources

 

Total Top 10 Equity Holdings

23.63%

 

Portfolio Allocation by Industry Sector*

Based on Total Investments

December 31, 2016

 

*

Summary information above may differ from the portfolio schedule included in the financial statements due to the use of different classifications of securities for presentation purposes.

 

32

 


Precious Metals and Minerals Funds

(unaudited)

 

Management Team’s Perspective

 

Introduction

 

The World Precious Minerals Fund (UNWPX and UNWIX) and the Gold and Precious Metals Fund (USERX) pursue an objective of long-term capital growth through investments in gold, precious metals and mining companies. The World Precious Minerals Fund focuses on equity securities of companies principally engaged in the exploration, mining and processing of precious minerals such as gold, silver, platinum and diamonds. Although this fund has the latitude to invest in a broad range of precious minerals, it currently remains focused on the gold sector. The Gold and Precious Metals Fund focuses on the equity securities of established gold and precious metals companies and pursues current income as a secondary objective.

 

World Precious Minerals Fund

Average Annual Performance

For the Periods Ended December 31, 2016

 

One Year

Five Year

Ten Year

Since Inception (Institutional Class)

World Precious Minerals Fund - Investor Class

75.08%

-11.85%

-5.45%

n/a

World Precious Minerals Fund - Institutional Class (Inception 3/1/10)

75.97%

-11.42%

n/a

-8.58%

S&P 500 Index

11.96%

14.66%

6.95%

13.08%

NYSE Arca Gold Miners Index*

53.26%

-16.36%

-5.98%

-10.33%

* These are not the total returns. These returns reflect simple appreciation only and do not reflect dividend reinvestment.

Performance data quoted above is historical. Past performance is no guarantee of 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 an investor’s shares, when redeemed, may be worth more or less than their original cost. The graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. For all or a portion of the periods, the fund had expense limitations, without which returns would have been lower.

Gross expense ratio as stated in the most recent prospectus is 2.01% for the Investor Class and 20.56% for the Institutional Class. Pursuant to a voluntary arrangement, the Adviser has agreed to limit total fund operating expenses (exclusive of any acquired fund fees and expenses, performance fees, taxes, brokerage commissions and interest) to not exceed 1.90%. Also pursuant to a voluntary agreement, the Adviser has agreed to waive all class specific expenses of the Institutional Class. The Adviser can modify or terminate these arrangements at any time.

See Definitions for Management Teams’ Perspectives for index definitions.

Please visit our website at www.usfunds.com for updated performance information for different time periods.

 

33

 


Precious Metals and Minerals Funds

(unaudited)

 

Gold and Precious Metals Fund

Average Annual Performance

For the Year Ended
December 31, 2016

 

One Year

Five Year

Ten Year

Gold and Precious Metals Fund

45.36%

-10.72%

-3.22%

S&P 500 Index

11.96%

14.66%

6.95%

FTSE Gold Mines Index

60.72%

-14.75%

-4.38%

Performance data quoted above is historical. Past performance is no guarantee of 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 an investor’s shares, when redeemed, may be worth more or less than their original cost. The graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. For all or a portion of the periods, the fund had expense limitations, without which returns would have been lower.

Gross expense ratio as stated in the most recent prospectus is 2.20%. Pursuant to a voluntary arrangement, the Adviser has agreed to limit total fund operating expenses (exclusive of any acquired fund fees and expenses, performance fees, taxes, brokerage commissions and interest) to not exceed 1.90%. The Adviser can modify or terminate this arrangement at any time.

See Definitions for Management Teams’ Perspectives for index definitions.

Please visit our website at www.usfunds.com for updated performance information for different time periods.

 

34

 


Precious Metals and Minerals Funds

(unaudited)

 

The Year in Review - Economic and Political Issues that Affected the Funds

 

Gold started the year strong following the first rate hike in December 2015, marking the first rate hike in eight years. Precious metals got an early boost following Janet Yellen’s remarks stating that the Federal Reserve will proceed “cautiously” with rate hikes this year. Gold investors started pouring money into gold ETFs at the fastest pace since 2009, with negative rates in Europe boosting its appeal. Hence, gold bullion prices clocked their best quarterly rally in 30 years.

 

Momentum continued into the second quarter, helped by the market turmoil following the United Kingdom’s decision to leave the European Union late in June. Gold rallied more in the first half of the year than in any other year since 1974, with prices pushed up 24 percent. The funds were the beneficiaries of two significant transactions in the first half of the year. In the first major deal, Tahoe Resources announced its definitive agreement to acquire Lake Shore Gold for $678 million in an all-stock transaction. The premium paid was about 15 percent to the prior closing price of Lake Shore. In the second transaction, Silver Standard Resources announced its agreement to buy all the outstanding common shares of Claude Resources, with the offer valuing Claude at C$337 million. According to Bloomberg, the price is about a 25 percent premium to the 20-day weighted average price of Claude and a 30 percent premium to Claude’s closing price on March 4. Our gold funds held slightly more than 9 million shares of Claude, almost 5 percent of the company.

 

China introduced a new yuan-priced gold fix, and within a week of the new fix being introduced, Russia and China announced a new gold trading platform. The trading platform the Chinese and Russians have adopted may eventually be a mechanism to set prices for goods or services in terms of gold and to break the dollar’s place as the currency of international trade. Platts reported that both Chinese and Russian banks increased their gold purchases during the month of June after they had both slowed their gold purchases in May. Russia added around 18 metric tons, and China added around 15 metric tons. China is now the sixth-largest holder of gold reserves, and Russia is the seventh-largest. The two countries have accounted for over 95 percent of total central bank purchases of gold in the last two years in their efforts to diversify away from foreign currency.

 

The surge in gold prices did have some drawbacks as price-sensitive India cut demand for the precious metal to the lowest in seven years. Weak demand forced dealers to sell gold at a discount to clear inventories. In addition, India’s gold imports in June were just 32 tonnes and were 43 percent less than June last year. This is a significant drop for India, one of the top countries for gold consumption, along with China. China consumption had its own headwinds with anti-corruption measures taking a toll on gold jewelry purchases, with demand falling 17.4 percent compared to 2015. Meanwhile, the investment-related demand for gold picked up, with gold bar and coin purchases up 25.3 percent and 17.3 percent, respectively.

 

35

 


Precious Metals and Minerals Funds

(unaudited)

 

China’s gold withdrawals surged in November as prices fell with the anticipated U.S. rate hike in December. According to the monthly report from the Shanghai Gold Exchange, purchases increased to 214.72 tonnes and was a 40 percent rise over the October figure. According to Bloomberg Intelligence, the five-year average gold premium is typically around $5.50 an ounce in China, but has soared to almost $40 an ounce, as falling prices invite “bargain buying” among the Chinese. This level of demand puts China on track to potentially maintain its position as the world’s largest gold consumer. Rumors and reports indicate that international banks are having difficulties with their imports, as the People’s Bank of China is taking longer to approve each importing transaction. The central bank may be trying to unofficially restrict gold imports to curb high capital outflows from China’s investors.

 

MarketWatch writer Nigam Arora believes the real reason behind the crash in gold price is India, not Trump. Citigroup analysts predicted that a Trump victory would push gold to $1,400, while a Hillary Clinton victory would send prices down to $1,250. Coincidently, India’s Prime Minister Narendra Modi directed that 500 and 1,000 rupee notes be banned as elections were taking place in the U.S. These represent 20 percent of the cash value in circulation and 80 percent of cash outstanding. The impact of demonetization in India is still being felt in gold demand. Gold imports in India for 2016 were much lower than the annual average of 1,000 metric tons, with just over 600 tons in 2016. Analysts anticipate that demand will be similarly low in 2017. Market observers in India say demand for gold is at rock bottom, despite the typically lucrative Indian wedding season in the fourth quarter. Precious metals prices did not rally until the last week of the year, with gold rising above $1,150 per ounce, snapping a three-year losing streak with an 8.56 percent gain.

 

Investment Highlights

 

For the year ended December 31, 2016, the World Precious Minerals Fund Investor Class returned 75.08 percent and the Institutional Class returned 75.97 percent, making the fund the best-performing actively managed mutual fund for all funds in the U.S. The fund’s benchmark, the NYSE Arca Gold Miners Index, gained 53.26 percent (simple price appreciation basis). The strategy of the World Precious Minerals Fund favors junior exploration and development stocks and mid-tiered producing stocks. These lower-capitalization stocks have historically outperformed senior gold mining companies over longer periods, as senior gold miners have typically acquired proven assets of junior gold companies rather than explored for new mining projects with capital-constrained budgets.

 

The Gold and Precious Metals Fund returned 45.36 percent for the year, underperforming its benchmark, the FTSE Gold Mines Index, which rose 60.72 percent on a total return basis. While focusing on established, gold-producing companies, the Gold and Precious Metals Fund holds a higher weighting of mid-tier stocks compared to its benchmark.

 

36

 


Precious Metals and Minerals Funds

(unaudited)

 

Both funds employed a defensive investment position from time to time in the past year with higher-than-average cash balances on hand to protect the liquidity of the funds. However, to maintain varying degrees of investment exposure to the gold market, the funds utilized some call options positions and directional ETFs, which are more liquid than options, to hedge the funds’ benchmark risks and provide optionality to upswings in gold stocks.

 

In addition to the rise in gold, silver finished the year up 14.86 percent, platinum only gained 1.16 percent, but palladium ended the year strongest with a gain of 20.96 percent, driven primarily by strong auto sales and anticipation of pro-growth Trump spending plans.

 

Because the funds are actively managed and the holding period is generally not a consideration in investment decisions, the portfolio turnover rate may fluctuate from year to year as the funds adjust their portfolio composition. The funds’ annual portfolio turnovers were, and are expected to continued to be, more than 100 percent.

 

Strengths

 

Barsele Minerals was spun out of Orex Minerals late in 2015 to gain better recognition of the three individual assets held by the company, two of which are in Mexico while Barsele’s asset is in Sweden and is joint-ventured with Agnico-Eagle Mines. Overall, Barsele was the biggest dollar contributor to the World Precious Minerals Fund with an 846 percent gain.

 

Klondex Mines was the best dollar gainer for Gold and Precious Metals with a 129 percent gain and was also the second-best contributor to World Precious Minerals. The second-best contributor to Gold and Precious Metals was the choice to eliminate Goldcorp from the portfolios earlier in the year, which significantly underperformed the market.

 

The third-best contributor to World Precious Minerals was Orex Minerals with a 127 percent gain. For Gold and Precious Metals, the choice not to own Newcrest Mining also had the third-highest attribution effect to fund performance relative to its benchmark.

 

Weaknesses

 

For both gold-oriented funds, Barrick Gold and Newmont Mining, relative to their benchmarks, showed up as being significant detractors to the funds’ performance as they were underweight both names, which delivered price changes of 118 percent and 90 percent, respectively. However, the large weighting in both funds in Klondex Mines, which gained 129 percent, outperformed Barrick Gold and Newmont Mining and did so while posting double-digit returns on invested capital. Barrick and Newmont had poor returns on invested capital.

 

37

 


Precious Metals and Minerals Funds

(unaudited)

 

Barrick Gold parsed out as being the biggest detractor to the funds’ returns. Newmont Mining was the second-worst contributor to World Precious Minerals and the third-worst contributor to Gold and Precious Metals.

 

The second-biggest drag on Gold and Precious Metals was from the Osisko Gold Royalty warrants held throughout the year. The warrants averaged less than 1 percent of the fund and only appreciated 6 percent over the year. The third-biggest drag on the performance of World Precious Minerals was its avoidance of any ownership in Kinross Gold. Although it appreciated 73 percent over the course of the year, its returns on invested capital hovered around negative 30 percent for most of the year.

 

Current Outlook

 

Opportunities

 

Mark Mobius, executive chairman of Templeton Emerging Markets Group, says he thinks gold will gain as much as 15 percent through 2017, as the Federal Reserve increases rates slowly and the dollar remains subdued. “The U.S. dollar is not that strong and may even decline,” said Mobius. Goldman has reiterated its view that any sell-off substantially below $1,250 an ounce should be seen as a buying opportunity. Gold demand may be spurred by weakness in China’s currency and concerns over the nation’s property market. In addition, global inflation expectations have risen to the highest level since May 2015. Investors anticipate annual consumer inflation of 1.4 percent. Gold is traditionally used as a hedge against inflation.

 

Bank Credit Analyst (BCA) points out that, realistically, it will take time for the incoming Trump administration to draft legislation that deploys fiscal stimulus—at least six months. It will then take time to see if it works. Given this reality, BCA’s team notes that the U.S. dollar and real rates “have moved too far too fast and likely will correct.” Where BCA differs from consensus is that the rising inflation expectations it measures in the forward markets are probably warranted for 2017. If growth materializes with stimulus, overlaid on a labor market that is close to full employment, the low inflation consensus could shift higher. This could depress real rates and provide a more attractive outlook for gold in 2017. Portfolio manager Terence Kooyker at Blenheim says he is bullish on gold, too. Kooyker says faster U.S. inflation and low interest rates will support gold, adding that “gold always performs best when nobody thinks you should own it.”

 

U.S. debt dynamics are set to turn positive for gold in 2017, according to ICBC Standard Bank, highlighting that the costs of higher yields are being overlooked. The Congressional Budget Office (CBO) calculates that net interest payments on the approximately $14 trillion of U.S. debt will amount to around $250 billion in 2017 (around 1.4 percent of U.S. GDP). “If we apply an 80-basis point increase to the CBO’s net interest forecasts and keep the other variables unchanged, then by 2026 the Treasury would be paying an additional $185 billion in interest annually,

 

38

 


Precious Metals and Minerals Funds

(unaudited)

 

and interest will have increased to 3.3 percent of GDP,” the report continues. In the note, Tom Kendall stresses the key point that the financing costs for the U.S. have already jumped, whereas the Trump administration’s policies may or may not have a positive impact on U.S. growth and the effects will be lagged. Thus, any disappointments on the growth front, combined with higher interest costs and contentious negotiations on raising the debt ceiling in the first quarter, could well result in a more bullish scenario for gold.

 

Threats

 

Two top gold forecasters see further losses for the yellow metal in 2017. Both Oversea-Chinese Banking and ABN Amro see gold slipping to $1,100 an ounce by the end of 2017. “From an investor point of view, there is little reason to own gold,” Georgette Boele, a currency and commodity analyst with ABN Amro, said. In a parallel vein to India’s demonetization, Goldcore reported that Citibank will make all Australian branches cashless, and UBS proposes that Australia eliminate $100 and $50 bills.

 

Earlier this year, it was reported that CalPERS, the largest public pension fund in the U.S., earned only 0.6 percent on its investments last fiscal year. In order to meet its long-term goal, however, the pension needs to be returning over 12 times that amount. CalPERS’ Chief Investment Officer Ted Eliopoulus writes that it is a significant policy issue and the system must average at least 7.5 percent a year to match its assumed rate of return or turn to taxpayers to make up the difference. CalPERS has subsequently announced it is looking to pair back its global equity and private equity exposure by 5 percentage points in favor of a larger allocation to real assets and inflation and liquidity asset classes.

 

Hedge fund manager Stanley Druckenmiller told CNBC that he sold all of his gold on the night of President Trump’s victory, saying that “All the reasons I owned it for the last couple of years seen to be ending.” Druckenmiller stated that he now has a “large bet on economic growth.” Some caution on exuberance may be warranted though, as David Rosenberg highlights in a piece for The Globe and Mail. Back in September, Donald Trump declared that markets are in a “big, fat ugly bubble.” Rosenberg believes Trump may be right on this one—this is the most expensive market in 15 years. In fact, if the price-to-earnings (P/E) ratio does its own version of mean-regression, then the equity market is discounting 33 percent earnings growth in 2017. “Look, if the market was even discounting 10 to 15 percent earnings per share growth, there is some moderate upside,” he continues. “But Mr. Market is priced for a one-in-20 event that only occurs at the early stages of the cycle, not heading into year number eight.”

 

The section labeled Portfolio of Investments contains a complete list of the funds’ holdings.

 

39

 


Precious Metals and Minerals Funds

(unaudited)

 

World Precious Minerals Fund

 

Top 10 Equity Holdings (Based on Net Assets)

December 31, 2016

Klondex Mines Ltd.

19.79%

Gold Mining

 

Barsele Minerals Corp.

6.37%

Precious Metals

 

TriStar Gold, Inc.

3.61%

Gold Mining

 

Pretium Resources, Inc.

3.22%

Gold Mining

 

Auryn Resources, Inc.

2.42%

Diversified Minerals

 

Lithium X Energy Corp.

2.11%

Diversified Minerals

 

Fiore Exploration Ltd.

1.92%

Precious Metals

 

Roxgold, Inc.

1.92%

Precious Metals

 

Gold Standard Ventures Corp.

1.80%

Gold Mining

 

Lundin Gold, Inc.

1.79%

Gold Mining

 

Total Top 10 Equity Holdings

44.95%

 

Portfolio Allocation by Industry*

Based on Total Investments

December 31, 2016

 

*

Summary information above may differ from the portfolio schedule included in the financial statements due to the use of different classifications of securities for presentation purposes.

 

40

 


Precious Metals and Minerals Funds

(unaudited)

 

Gold and Precious Metals Fund

 

Top 10 Equity Holdings (Based on Net Assets)

December 31, 2016

Klondex Mines Ltd.

22.29%

Gold Mining

 

Kirkland Lake Gold, Inc.

8.02%

Gold Mining

 

Wesdome Gold Mines Ltd.

5.30%

Gold Mining

 

St Barbara Ltd.

4.61%

Gold Mining

 

Barrick Gold Corp.

3.83%

Gold Mining

 

Jaguar Mining, Inc.

3.47%

Gold Mining

 

Royal Gold, Inc.

3.37%

Gold Mining

 

Torex Gold Resources, Inc.

3.29%

Gold Mining

 

Newmont Mining Corp.

3.26%

Gold Mining

 

Silver Wheaton Corp.

3.08%

Silver Mining

 

Total Top 10 Equity Holdings

60.52%

 

Portfolio Allocation by Industry*

Based on Total Investments

December 31, 2016

 

*

Summary information above may differ from the portfolio schedule included in the financial statements due to the use of different classifications of securities for presentation purposes.

 

41

 


Emerging Europe Fund

(unaudited)

 

Management Team’s Perspective

 

Introduction

 

The investment objective of the Emerging Europe Fund (EUROX) is to achieve long-term capital growth by investing in a non-diversified portfolio of equity securities of companies located in the emerging markets of Europe.(1)

 

Performance Graph

 

Emerging Europe Fund

Average Annual Performance

For the Years Ended
December 31, 2016

 

One Year

Five Year

Ten Year

Emerging Europe Fund

14.23%

-4.25%

-6.67%

S&P 500 Index

11.96%

14.66%

6.95%

MSCI Emerging Markets Europe 10/40 Index (Net Total Return)

25.70%

-1.64%

-3.59%

* Performance data quoted above is historical. Past performance is no guarantee of 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 an investor’s shares, when redeemed, may be worth more or less than their original cost. The graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. For all or a portion of the periods, the fund had expense limitations, without which returns would have been lower.

Gross expense ratio as stated in the most recent prospectus is 2.61%. Pursuant to a voluntary arrangement, the Adviser has agreed to limit total fund operating expenses (exclusive of any acquired fund fees and expenses, performance fees, taxes, brokerage commissions and interest) to not exceed 2.85%. The Adviser can modify or terminate this arrangement at any time.

See Definitions for Management Teams’ Perspectives for index definitions.

Please visit our website at www.usfunds.com for updated performance information for different time periods.

 

(1)

The following countries are considered to be in the emerging Europe region: Albania, Armenia, Azerbaijan, Belarus, Bulgaria, Croatia, the Czech Republic, Estonia, FYR Macedonia, Georgia, Greece, Hungary, Latvia, Lithuania, Moldova, Poland, Romania, Russia, Slovakia, Slovenia, Turkey and Ukraine.

 

42

 


Emerging Europe Fund

(unaudited)

 

The Year in Review – Economic and Political Issues that Affected the Fund

 

Russia was the best performing market this year. The MSCI Russia Index rebounded at the beginning of the year and continued its sharp upward move after the Organization of Petroleum Exporting Countries (OPEC) announced production cuts at the end of November. Russia benefits from higher oil prices, as a majority of the country’s revenue comes from the sale of oil and gas, comprising about 30 percent of the country’s gross domestic product (GDP). A couple of events took place this year that strengthened Russia’s positon in Europe. First, the United Kingdom voted to exit the eurozone, leaving the continent more divided. The U.K. had consistently spoken in favor of preserving the sanctions against Russia, which were introduced in 2014 after Russia annexed Crimea. Also, the U.S. presidential election boosted optimism among Russian investors as Donald Trump wants to cooperate with Vladimir Putin in fighting terrorism and may review sanctions that Barack Obama imposed on Russia after its conflict with Ukraine.

 

Hungary was the second-best performing market within the emerging European countries. The aggressive monetary easing program continued. The central bank of Hungary is dovish and trying to be growth supportive, bringing benchmark rates down to 90 basis points from 1.35 percent at the beginning of 2016. Hungary’s government will cut its corporate tax rate to the lowest level in the eurozone; a new 9 percent corporate tax rate will be introduced in 2017, significantly lower than Ireland’s 12.5 percent. Hungary regained its investment grade at S&P Global Ratings after almost five years as economic growth rebounded and the government’s budget discipline bolstered public finances.

 

In Poland, the newly elected right wing Law & Justice party started to implement social spending programs and create more state controlled economy. At the beginning of the year, S&P Global Ratings cut Poland’s long-term foreign currency sovereign credit rating from A- to BBB+ with negative outlook, citing moves by the new Law & Justice administration to seize control of the country’s public media and challenge the independence of its constitutional court. In December, S&P Global Ratings raised the outlook to stable from negative on reduced concerns over the central banks’ independence from government.

 

The Czech Republic underperformed the index. The country’s central bank has kept the benchmark rate at a record low of 0.05 percent through the year and has indicated that it will remove a cap on the koruna once inflation reaches its target of 2 percent. The approaching end of the intervention regime and expectations of exchange-rate gains are luring investors into Czech sovereign bonds.

 

43

 


Emerging Europe Fund

(unaudited)

 

The Greek market also underperformed in the past year. Eurozone finance ministers agreed to unlock a further 10.3 billion euros in loans—a tranche of cash that Athens needed to meet debt repayments due in July. Debt relief for Greece was also approved, extending the repayment period and capping interest rates. Greece needs more disbursements and currently is working on implementation of further reforms.

 

Turkey was the worst performing market for the second year in a row. The country’s tourism industry experienced its worst summer in 25 years amid terrorism and an attempted coup. A state of emergency was declared on July 21, a move that President Recep Tayyip Erdogan said would enable the state to act faster against those who plotted a failed coup. Thousands of people were arrested, from high-ranking military officials to university professors, on alleged links to the Gulen Movement. Toward the end of the year, President Erdogan pushed forward with the process of concentrating power in his office as the governing party officially proposed an executive presidency to parliament. It was a year of valiance and political instability in Turkey. The lira declined 17 percent against the dollar.

 

Investment Highlights

 

Overview

 

For the year ended December 31, 2016, the fund returned 14.23 percent, while the benchmark MSCI Emerging Markets Europe 10/40 Index (Net Total Return) returned 25.70 percent.

 

Russia and Hungary outperformed the benchmark, while Greece, Poland, the Czech Republic and Turkey underperformed. On a sector basis, energy and material were the best-performing sectors, while finance, consumer discretionary, health care, telecommunications, consumer staples, utilities, real estate and industrials underperformed.

 

At the beginning of 2016, the fund was positioned in a defensive mode, underweighting Russia. Throughout the year, the fund increased its Russian holdings and used call options on a Russian ETF (RSX) as well as directional ETFs to hedge the fund’s benchmark risk.

 

Because the fund is actively managed, and the holding period is generally not a consideration in investment decisions, the portfolio turnover rate may fluctuate from year to year as the fund adjusts its portfolio composition. The fund’s annual portfolio turnovers were, and are expected to continued to be, more than 100 percent.

 

Strengths

 

The fund’s underweighting of Poland as well as good stock selection in Greece had a positive contribution to the fund’s performance relative to its benchmark.

 

The fund’s stock selection in financials and utilities had a positive contribution to the performance of the fund relative to its benchmark.

 

44

 


Emerging Europe Fund

(unaudited)

 

Sberbank, a Russian bank, made the largest single contribution to the performance of the fund.

 

Weaknesses

 

The fund’s underweighting of Russia as well as higher cash levels had a negative impact on the fund’s performance relative to its benchmark.

 

The fund’s overweighting in industrials and underweighting in energy had a negative effect on the fund’s performance relative to its benchmark.

 

The Direxion Daily Russia 3X Bear ETF was the single worst contributor to the performance of the fund.

 

Current Outlook

 

Opportunities

 

The central bank of the Czech Republic expects inflation to accelerate to 2 percent in the third quarter of next year, and may remove a cap on the koruna. The market has already started to bet on the foreign-exchange regime changing and selling the euro against the koruna as one of the top trades for 2017.

 

The U.S. will likely start easing its penalties—imposed on Russia over annexation of Crimea in 2014—during the next 12 months, according to 55 percent of respondents in a Bloomberg survey. Without the restrictions, Russia’s economic growth would get a boost equivalent to 0.2 percentage points of gross domestic product next year and 0.5 percentage points in 2018. Donald Trump’s surprise election in November is feeding expectations of policy change toward Russia.

 

The FTSE index provider classifies Romania as a frontier market and, in September 2016, added it to the watch list for possible promotion to Secondary Emerging Market status. Romania meets eight of the nine “Quality of Markets” criteria required for attaining Secondary Emerging Market status, with recent developments in the infrastructure of the market being received positively by international portfolio investors. The one outstanding criterion is sufficient broad-market liquidity to support a sizeable global investment. Romania may be coming closer to emerging market status.

 

Threats

 

The European political calendar is full for the next 12 months and could create some political tension. British Prime Minister Theresa May gave March 31 as the deadline for triggering Article 50, which will start the process of Brexit. In April, France will hold presidential elections. A Marine Le Pen victory could create crisis in the European Union area given her antipathy to this area. It could also promote a more populist, industrial-policy driven agenda. In August, Germany will hold national elections. Angela Merkel announced her decision to run for

 

45

 


Emerging Europe Fund

(unaudited)

 

 

a fourth term. Her leadership is critical to retain investment confidence in the region. However, her supporters have declined in number due to her immigration policies.

 

The Bank Credit Analyst research team predicts the dollar bull market to stay intact during 2017, with the Trade Weighted Index rising by around 5 percent, which should be negative for riskier emerging Europe assets. The group remains bearish on emerging Europe currencies.

 

The outflow of assets from Turkey could continue next year and the lira may remain vulnerable to external conditions and political risks feeding into higher inflation. The Turkish economy faces recession risks as the third quarter GDP contracted 1.8 percent on a year-over-year basis, the first contraction since the third quarter on 2009. The coup attempt in July appears to have hurt the economy more than expected.

 

The section labeled Portfolio of Investments contains a complete list of the fund’s holdings.

 

Top 10 Equity Holdings (Based on Net Assets)

December 31, 2016

Sberbank of Russia

10.49%

Commercial Banks - Non US

 

Lukoil PJSC

8.18%

Oil Companies - Integrated

 

Gazprom OAO

7.93%

Oil Companies - Integrated

 

Polski Koncern Naftowy Orlen S.A.

1.97%

Oil Refining & Marketing

 

Moneta Money Bank A.S.

1.82%

Regional Banks - Non US

 

OTP Bank plc

1.75%

Commercial Banks - Non US

 

Eurocash S.A.

1.64%

Food - Wholesale/Distribution

 

Arcelik A.S.

1.58%

Appliances

 

Magnit PJSC

1.46%

Food - Retail

 

MOL Hungarian Oil & Gas plc

1.45%

Oil Companies - Integrated

 

Total Top 10 Equity Holdings

38.27%

 

46

 


Emerging Europe Fund

(unaudited)

 

Country Distribution*

Based on Total Investments

December 31, 2016

 

*

Country distribution shown is based on domicile. The locale of company operations may be different.

 

47

 


China Region Fund

(unaudited)

 

Management Team’s Perspective

 

Introduction

 

The China Region Fund (USCOX) seeks long-term growth of capital. The fund invests in both established and emerging companies registered and operating in the China region.(1)

 

Performance Graph

 

China Region Fund

Average Annual Performance

For the Years Ended
December 31, 2016

 

One Year

Five Year

Ten Year

China Region Fund

-1.05%

1.82%

-1.09%

Hang Seng Composite Index

2.73%

6.94%

4.00%

MSCI All Country Far East Free ex Japan Index*

6.57%

4.98%

4.16%

* These are not total returns. These returns reflect simple appreciation only and do not reflect dividend reinvestment.

Performance data quoted above is historical. Past performance is no guarantee of 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 an investor’s shares, when redeemed, may be worth more or less than their original cost. The graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. For all or a portion of the periods, the fund had expense limitations, without which returns would have been lower.

Gross expense ratio as stated in the most recent prospectus is 3.08%. Pursuant to a voluntary arrangement, the Adviser has agreed to limit total fund operating expenses (exclusive of any acquired fund fees and expenses, performance fees, taxes, brokerage commissions and interest) to not exceed 2.55%. The Adviser can modify or terminate this arrangement at any time.

See Definitions for Management Teams’ Perspectives for index definitions.

Please visit our website at www.usfunds.com for updated performance information for different time periods..

 

(1)

The China region is defined as any country that either shares a border with China or is located in the South China Sea or the East China Sea and includes: the People’s Republic of China (PRC or China), Bangladesh, Cambodia, Hong Kong, India, Indonesia, Kazakhstan, Korea, Kyrgyzstan, Laos, Malaysia, Mongolia, Myanmar, Nepal, Pakistan, Philippines, Singapore, Taiwan, Tajikistan, Thailand and Vietnam.

 

48

 


China Region Fund

(unaudited)

 

The Year in Review – Economic and Political Issues that Affected the Fund

 

2016 kicked off with an explosive bang as the Shanghai Composite Index tumbled in the opening days of the year, losing as much as a quarter of its value in the month of January. The Hang Seng Composite Index (HSCI)—along with most global indices—also dropped sharply that month, falling as much as 16 percent. While Hong Kong stumbled back to a positive total return, Shanghai did not fully recover and finished down more than 10 percent for the year.

 

Despite equity market hiccups, 2016 offered positive signs from measurements of manufacturing in China. The official China Manufacturing Purchasing Manager’s Index (PMI) rose from 49.7 at the close of 2015 to 51.4 at the close of 2016. This official data was consistent with the private Caixin China Manufacturing Purchasing Manager’s Index (PMI), which also rose steadily throughout the year, climbing from the contractionary 48 range to an expansionary 51.9 in December, thus closing 2016 at the high for the year.

 

Toward the end of 2015, the Chinese authorities lowered expectations for 2016’s gross domestic product (GDP) growth rate to a range of 6.5-7.0 percent, promising a focus upon growth-oriented policies; this range was indeed met as GDP in China finished out the year at 6.8 percent. Particularly noteworthy in 2016 is the historic inclusion of the Chinese renminbi in the International Monetary Fund’s (IMF’s) Special Drawing Rights (SDR) basket of currencies, granting the yuan a powerful place alongside the U.S. dollar, British pound sterling, Japanese yen and the euro as a global reserve currency.

 

Near the end of 2016, press reports confirmed that China’s Xi Jinping remains “comfortable” with a 2017 GDP growth rate below 6.5 percent as leadership seeks to prioritize stability and risk control above growth for growth’s sake. Indeed, while 2016 was marked in some ways by relatively quiet(ed) but nonetheless creeping concerns about rising Chinese debt levels and non-performing loans (in addition to slowing growth), the proxies for investors were primarily the yuan—which weakened throughout much of the year, stabilized ahead of SDR inclusion and a G-20 summit in China, and then continued weakening until hitting more than 6.96—and a close eye on China’s FX reserve levels, which fell to roughly $3 trillion at the close of the year. Throughout 2016, Chinese authorities attempted to crack down heavily on capital outflows from the mainland by methods ranging from capping certain foreign currency transactions to prohibiting various purchases of wealth management products (which weighed on insurers to some degree). Separately, Chinese authorities also clamped down quickly upon a surge in commodities speculation, while various cities and local governments took a number of steps to curb rapid property appreciation, especially in Tier 1 cities.

 

49

 


China Region Fund

(unaudited)

 

All the while, China’s growing middle class—like other middle classes in the region—continued its ascent, perpetuating thematic trends in industries like tourism, automobiles and health care, for example. Macau also saw a resurgence in latter 2016, as the gaming and hospitality center began a recovery from Xi Jinping’s crackdown on corruption, perhaps signaling that China’s middle class stepped up, at least partly, to fill in some of the gaps from Macau’s formerly ostentatious VIP orientation.

 

Elsewhere in the region, President Joko Widodo of the Republic of Indonesia continued his promised course of reform, achieving his stated objective of a Tax Amnesty Scheme (TAS) for repatriating offshore and undeclared assets to bring in tax revenue and keep Indonesia ahead of the 2018 implementation of the Automatic Exchange of Information banking secrecy laws. This encouraging move should help to offset “JokoWi’s” promised infrastructure spending and development, bolster property investment and bring increased transparency and revenue to the island-nation.

 

Other particularly notable political developments in the region include the rise of President Tsai Ing-wen of the Democratic Progressive Party to office in Taiwan (her carefully crafted rhetoric and relations with the People’s Republic of China may well be frostier than under her recent predecessors), while the tough-talking, populist former Davao City mayor Rodrigo Roa Duterte won election to the presidency of the Philippines. Thailand’s revered and long-reigning King Bhumibol (Rama IX) passed away in October and was succeeded by his son, Vajiralongkorn.

 

Of relevance for the region are three final, interrelated geopolitical issues affecting 2016 and the future, all of which involve the United States of America. The first is the continued rise in U.S. interest rates in the wake of a reasonably strong U.S. economy, which reverberates around the world due to the reach of the strengthened U.S. dollar. The second is the election of U.S. President Donald Trump, whose openly protectionist policies and saber-rattling rhetoric raise several questions concerning the region, especially with respect to China: the potential effects and fallout of branding China a “currency manipulator,” the status of U.S. policies on China and Taiwan and issues of sovereignty in the South China Sea, among others. Third, and finally, the Obama administration’s troubled Trans-Pacific Partnership (TPP) now appears to be dead in the water.

 

Investment Highlights

 

Overview

 

For the year ended December 31, 2016, the China Region Fund had a negative return of 1.05 percent, underperforming the benchmark Hang Seng Composite Index (HSCI), which advanced 2.73 percent in total return.

 

50

 


China Region Fund

(unaudited)

 

Because the fund is actively managed and holding period is generally not a consideration in investment decisions, the portfolio turnover rate may fluctuate from year to year as the fund adjusts its portfolio composition. The fund’s annual portfolio turnover was, and is expected to continue to be, more than 100 percent.

 

Strengths

 

Within the broader “China Region,” Indonesia and Taiwan proved most helpful with respect to positive contributions from country allocation to fund performance for the year.

 

Stock selection within the consumer goods sector constituted the largest sector alpha generator for the fund, while sector allocation within conglomerates proved most successful.

 

Geely Automobile Holdings, Sunny Optical Technology Group and Guangzhou Automobile Group finished the year as the top three contributors to fund performance.

 

Weaknesses

 

Outside of Hong Kong—where stock selection left room for improvement—country allocation to South Korea and Malaysia was less than satisfactory.

 

Sector allocation to consumer services was a net detractor for the fund.

 

Boer Power Holdings, AIA Group and China Construction Bank detracted the most from fund performance for the year.

 

Current Outlook

 

Opportunities

 

Chinese tourism continues to grow steadily, with domestic tourists taking 4.44 billion trips in 2016, up 11 percent from the previous year. Tourism contributed a whopping 11 percent to the country’s GDP.

 

As expected (though somewhat unprecedented), the 2017 resolution to impeach South Korean President Park Geun-hye may provide more transparency and something of a reset for South Korean domestic politics in new elections.

 

Even though the Trans-Pacific Partnership (TPP)—to which China was noticeably not party—is now apparently defunct, China is already moving, along with regional partners, to create a replacement trade agreement—to which the U.S. has not been party—with talks that began in 2016 and are expected to continue in 2017. Regardless of U.S. involvement or lack thereof, a new trade agreement could provide a number of the same expected benefits that TPP potentially could have.

 

51

 


China Region Fund

(unaudited)

 

Threats

 

The declining levels of China’s FX reserves continue to hold investors’ attention, particularly as the yuan has approached 7.0 and reserves have fallen to just above $3 trillion.

 

Perhaps central to issues of declining reserves and a weaker yuan is the question of where U.S.-China trade policies go from here. While investors have obvious reasons to expect U.S. President Trump to seek policies that minimize the potential for a trade war and that discourage unnecessary tension, thus far President Trump’s rhetoric remains elevated and his policies unclarified.

 

In addition to potentially sweeping U.S. political and policy changes that could reverberate throughout the world, recent regional developments also remain highly relevant. Questions and potential threats exist, for example, around the issues of the Philippine “pivot” toward China, the effectiveness of recent Indian demonetization, the status of Taiwan, an as-yet constitutionally unapproved impeachment in South Korea and ongoing concerns about sovereignty in disputed areas of the South China Sea.

 

The section labeled Portfolio of Investments contains a complete list of the fund’s holdings.

 

Top 10 Equity Holdings (Based on Net Assets)

December 31, 2016

Tencent Holdings Ltd.

5.29%

Internet Application Software

 

Geely Automobile Holdings Ltd.

4.99%

Automotive - Cars & Light Trucks

 

Sunny Optical Technology Group Co., Ltd.

4.15%

Photo Equipment & Supplies

 

Guangzhou Automobile Group Co., Ltd.

4.01%

Automotive - Cars & Light Trucks

 

GF Securities Co., Ltd.

3.14%

Investment Management/Advisory Services

 

PICC Property & Casualty Co., Ltd.

2.99%

Property/Casualty Insurance

 

PCCW Ltd.

2.78%

Telecom Services

 

CSPC Pharmaceutical Group Ltd.

2.77%

Medical - Drugs

 

Man Wah Holdings Ltd.

2.54%

Retail - Home Furnishings

 

ANTA Sports Products Ltd.

2.25%

Retail - Apparel/Shoe

 

Total Top 10 Equity Holdings

34.91%

 

52

 


China Region Fund

(unaudited)

 

Country Distribution*

Based on Total Investments

December 31, 2016

 

*

Country distribution shown is based on domicile and not intended to conform to the China region definition in the prospectus. The locale of company operations may be different.

 

53

 


U.S. Government Securities Ultra-Short Bond Fund
Portfolio of Investments

December 31, 2016

 

United States
Government and Agency
Obligations 96.35%

 

Coupon

Rate %

 

Maturity

Date

 

Principal

Amount

   

Value

 
                     

Federal Farm Credit Bank 47.01%

 

Fixed Rates:

                   
   

1.13

 

09/22/17

 

$

2,000,000

   

$

2,004,594

 
   

1.16

 

10/23/17

   

1,000,000

     

1,002,589

 

Variable Rates:

                       
   

0.70

 

01/30/17

   

1,650,000

     

1,650,084

 
   

0.72

 

04/27/17

   

9,000,000

     

9,001,738

 
   

0.73

 

05/12/17

   

5,933,000

     

5,934,388

 
   

0.69

 

10/13/17

   

4,100,000

     

4,103,120

 
   

0.78

 

03/22/18

   

3,000,000

     

3,004,068

 
                     

26,700,581

 
                         

Federal Home Loan Bank 40.06%

 

Fixed Rates:

                       
   

0.63

 

04/26/17

   

3,000,000

     

2,999,751

 
   

0.88

 

09/27/17

   

3,000,000

     

3,001,521

 
   

1.00

 

12/19/17

   

8,000,000

     

8,005,128

 
   

1.13

 

03/29/18

   

750,000

     

749,753

 
   

1.00

 

08/28/18

   

4,000,000

     

3,979,920

 
   

1.50

 

03/08/19

   

4,000,000

     

4,013,348

 
                     

22,749,421

 
                         

Tennessee Valley Authority 9.28%

 

Fixed Rates:

                       
   

6.25

 

12/15/17

   

2,930,000

     

3,075,258

 
   

1.75

 

10/15/18

   

2,174,000

     

2,193,233

 
                     

5,268,491

 

 

Total Investments 96.35%

     

54,718,493

 

(cost $54,640,917)

                       

Other assets and liabilities, net 3.65%

                   

2,075,118

 
                         

Net Assets 100.0%

                 

$

56,793,611

 

 

See notes to portfolios of investments and notes to financial statements.

 

54

 


Near-Term Tax Free Fund
Portfolio of Investments

December 31, 2016

 

Municipal Bonds 92.86%

 

Coupon
Rate %

 

Maturity
Date

 

Principal
Amount

   

Value

 
                     

Alabama 1.22%

 

Bessemer, Alabama Electric Revenue, Refunding, AGM

 

3.10

 

12/01/21

 

$

100,000

   

$

102,706

 

Limestone County, Water & Sewer Authority

 

2.25

 

12/01/21

   

365,000

     

355,634

 

Mobile Alabama, Refunding, GO Unlimited, Series B

 

5.00

 

02/15/17

   

45,000

     

45,210

 

Pelham, Alabama, GO Unlimited

 

2.00

 

02/01/18

   

130,000

     

131,257

 

University of South Alabama, University Revenue, Refunding

 

5.00

 

11/01/18

   

500,000

     

531,705

 
                     

1,166,512

 
                         

Alaska 0.04%

 

Valdez Alaska, School District, GO Unlimited

 

4.00

 

06/30/17

   

40,000

     

40,561

 
                         

Arizona 0.65%

 

Arizona State Transportation Board Excise Tax Revenue

 

5.00

 

07/01/17

   

175,000

     

178,518

 

McAllister Academic Village LLC, Arizona State University Hassayampa Revenue, Refunding

 

5.75

 

07/01/18

   

200,000

     

212,898

 

Tempe, Arizona, GO Unlimited, Series A

 

2.00

 

07/01/19

   

220,000

     

223,219

 
                     

614,635

 
                         

Arkansas 1.43%

 

Atkins School District No. 18, Refunding, GO Limited

 

1.00

 

02/01/19

   

420,000

     

413,797

 

Cave City School District No. 2-A, Refunding, GO Limited

 

1.00

 

02/01/19

   

260,000

     

255,369

 

Hot Springs, Arizona Wastewater Revenue

 

4.00

 

12/01/19

   

510,000

     

540,279

 

Paris School District No. 7, Refunding, GO Limited

 

1.00

 

06/01/18

   

150,000

     

149,207

 
                     

1,358,652

 
                         

California 2.68%

 

California State, Recreational Facility, Refunding, GO Unlimited

 

5.00

 

12/01/19

   

5,000

     

5,014

 

California State, Statewide Communities Development Authority, Enloe Medical Center Revenue, Series A

 

5.25

 

08/15/18

   

340,000

     

361,508

 

Chaffey Community College District, GO Unlimited, Series C, NATL

 

5.00

 

06/01/32

   

300,000

     

305,028

 

Delano, California Union High School District, Refunding, GO Unlimited, Series A, NATL

 

4.75

 

02/01/17

   

200,000

     

200,540

 

 

See notes to portfolios of investments and notes to financial statements.

 

55

 


Near-Term Tax Free Fund
Portfolio of Investments

December 31, 2016

 

Municipal Bonds (cont'd)
 
Coupon
Rate %
 
Maturity
Date
 
Principal
Amount
   
Value
 
                     
California (cont'd)
 
Los Angeles Unified School District, Election 2004, GO Unlimited, Series H, AGM
 
5.00
 
07/01/32
 
$
200,000
   
$
203,970
 
Newman-Crows Landing Unified School District, GO Unlimited, AGM
 
4.00
 
08/01/19
   
115,000
     
122,017
 
Orange County Sanitation District, Certificates of Participation, Series B, AGM
 
5.00
 
02/01/21
   
100,000
     
100,306
 
Riverside County, California Redevelopment Successor Agency, Refunding, Tax Allocation
 
5.00
 
10/01/19
   
200,000
     
216,632
 
Santa Clara County, California Financing Authority Revenue, Obstetrics and Gynecology, El Camino Hospital, AMBAC
 
5.00
 
02/01/18
   
350,000
     
358,110
 
Santa Clara Valley Transportation Authority, Series A, AMBAC
 
5.00
 
04/01/27
   
370,000
     
373,659
 
Santa Paula Schools Financing Authority, Santa Paula Elementary School District Revenue, AGM
 
4.25
 
11/01/22
   
300,000
     
307,161
 
                     
2,553,945
 
                         
District of Columbia 0.35%
 
District of Columbia Income Tax Revenue, Series A
 
5.25
 
12/01/27
   
300,000
     
330,063
 
                         
Florida 5.21%
 
Citizens Property Insurance Co., Senior Secured, Coastal Account, Revenue, Series A-1
 
4.00
 
06/01/18
   
100,000
     
103,463
 
Escambia County, Florida, Health Facilities Authority Revenue, Baptist Hospital, Inc. Project, Series A
 
5.00
 
08/15/19
   
290,000
     
309,650
 
Florida State Board of Education Lottery Revenue, Series B, BHAC
 
5.00
 
07/01/26
   
100,000
     
102,986
 
Florida State Board of Governors Parking Facility Revenue, Series A
 
3.00
 
07/01/17
   
300,000
     
303,066
 
Florida State Department of Management Services Certificates of Participation, Refunding, Series A
 
5.00
 
08/01/19
   
500,000
     
543,725
 
Florida State Department of Management Services Certificates of Participation, Series A
 
5.00
 
08/01/24
   
340,000
     
362,182
 

 

See notes to portfolios of investments and notes to financial statements.

 

56

 


Near-Term Tax Free Fund
Portfolio of Investments

December 31, 2016

 

Municipal Bonds (cont'd)

 

Coupon
Rate %

 

Maturity
Date

 

Principal
Amount

   

Value

 
                     

Florida (cont'd)

 

Florida State Municipal Power Agency, Stanton Project Revenue, Refunding

 

5.13

 

10/01/17

 

$

300,000

   

$

308,790

 

Hillsborough County, Florida School Board, Refunding, Certificates of Participation, Series A

 

4.25

 

07/01/25

   

300,000

     

319,401

 

Hillsborough County, Florida School Board, Certificates of Participation, Refunding, NATL

 

4.00

 

07/01/19

   

100,000

     

101,267

 

Jacksonville Florida Special Revenue, Series C

 

5.00

 

10/01/20

   

270,000

     

299,754

 

Leesburg, Florida Capital Improvement Revenue Bonds, Refunding

 

5.00

 

10/01/21

   

405,000

     

447,489

 

Margate, Florida Water & Sewer Revenue, Refunding, AGM

 

4.00

 

10/01/19

   

250,000

     

264,353

 

Miami - Dade County, Florida Expressway Authority Toll System Revenue, Series A

 

5.00

 

07/01/21

   

430,000

     

483,939

 

Orange County School Board, Certificates of Participation, Series A, NATL

 

5.00

 

08/01/32

   

275,000

     

281,306

 

Orlando, Florida Community Redevelopment Agency Tax Increment Revenue, Downtown District, Tax Allocation, Series A

 

4.00

 

09/01/17

   

170,000

     

172,212

 

Polk County, Florida School District Revenue, AGM

 

5.00

 

10/01/17

   

215,000

     

221,102

 

Saint Johns County, Florida Transportation Revenue, Refunding, AGM

 

5.00

 

10/01/20

   

310,000

     

344,754

 
                     

4,969,439

 
                         

Georgia 1.85%

 

Carroll City-County, Georgia Hospital Authority, Tanner Medical Center, Inc. Project

 

5.00

 

07/01/18

   

600,000

     

632,904

 

Georgia State Municipal Electric Authority Revenue, Unrefunded, NATL

 

5.50

 

01/01/20

   

40,000

     

41,093

 

Georgia State Municipal Gas Authority, Toccoa Project, Refunding, AGM

 

5.00

 

06/01/22

   

600,000

     

670,428

 

Glynn-Brunswick Memorial Hospital Authority, Southeast Georgia Health System and Affiliates Revenue, Certificates of Participation, Series A

 

4.50

 

08/01/17

   

150,000

     

152,918

 

Gwinnett County, Georgia, Hospital Authority, Gwinnett Hospital Systems Revenue, Series B, AGM

 

5.00

 

07/01/18

   

250,000

     

263,483

 
                     

1,760,826

 

 

See notes to portfolios of investments and notes to financial statements.

 

57

 


Near-Term Tax Free Fund
Portfolio of Investments

December 31, 2016

 

Municipal Bonds (cont'd)

 

Coupon
Rate %

 

Maturity
Date

 

Principal
Amount

   

Value

 
                   

Idaho 0.27%

 

Idaho Housing & Finance Association, Grant & Revenue Anticipation, Federal Highway Trust Fund, Series A

 

5.00

 

07/15/21

 

$

225,000

   

$

252,938

 
                         

Illinois 4.48%

 

Chicago Board of Education, GO Unlimited, NATL

 

5.25

 

12/01/19

   

300,000

     

318,381

 

Chicago, Illinois, O’Hare International Airport Revenue, Gen - Third Lien, Series C, AGC

 

5.25

 

01/01/23

   

250,000

     

272,965

 

Clinton Bond Fayette Etc Counties Community College District No. 501 Kaskaskia, GO Unlimited

 

5.75

 

12/01/19

   

500,000

     

547,905

 

Du Page County, Refunding, GO Unlimited

 

5.60

 

01/01/21

   

330,000

     

356,720

 

Du Page County School District No. 33 West Chicago, Redunding, GO Unlimited, Series B

 

4.00

 

12/01/21

   

1,000,000

     

1,078,419

 

Illinois Metropolitan Pier & Exposition Authority, Unrefunded, NATL (ZCB)

 

1.75

(1) 

06/15/18

   

415,000

     

399,857

 

Illinois Regional Transportation Authority, Series A, AMBAC

 

7.20

 

11/01/20

   

120,000

     

133,174

 

Lake & McHenry County, Fox Lake, Illinois, Debt Certificates, Series B

 

3.00

 

11/01/19

   

265,000

     

270,109

 

Springfield, Illinois Metropolitan Sanitation District, Sewer Revenue, Senior Lien, Series A

 

4.00

 

01/01/17

   

570,000

     

570,000

 

Will Grundy Etc Counties Community College District No. 525, Joliet Junior College Project, GO Unlimited

 

6.25

 

06/01/22

   

300,000

     

319,566

 
                     

4,267,096

 
                         

Indiana 1.89%

 

Clark-Pleasant, Indiana School Building

 

5.00

 

01/15/19

   

275,000

     

294,151

 

Indianapolis Local Public Improvement Bond Bank, Waterworks Project, Series 2007 L, NATL

 

5.25

 

01/01/33

   

305,000

     

317,661

 

Merrillville Redevelopment Authority, Tax Allocation

 

5.00

 

08/15/20

   

350,000

     

385,882

 

Tri-Creek 2002 High School Building, AGM

 

5.00

 

07/15/19

   

800,000

     

800,928

 
                     

1,798,622

 
                         

Iowa 0.68%

 

Clive, Iowa, GO Unlimited, Series A

 

2.00

 

06/01/19

   

235,000

     

238,100

 

 

See notes to portfolios of investments and notes to financial statements.

 

58

 


Near-Term Tax Free Fund
Portfolio of Investments

December 31, 2016

 

Municipal Bonds (cont'd)

 

Coupon
Rate %

 

Maturity
Date

 

Principal
Amount

   

Value

 
                     

Iowa (cont’d)

 

University of Iowa Hospitals and Clinics, Iowa State Board of Regents, Hospital Revenue, Series A

 

3.00

 

09/01/19

 

$

400,000

   

$

413,228

 
                     

651,328

 
                         

Kansas 1.28%

 

Sedgwick County, Kansas, Unified School District No. 261 Haysville, GO Unlimited

 

5.00

 

11/01/17

   

885,000

     

913,161

 

Sedgwick County, Kansas, Unified School District No. 266 Maize, GO Unlimited, NATL

 

5.00

 

09/01/17

   

50,000

     

51,283

 

Wichita, Kansas, Refunding, GO Unlimited, Series A

 

5.00

 

12/01/17

   

250,000

     

259,130

 
                     

1,223,574

 
                         

Kentucky 1.98%

 

Boyle County, Kentucky Library District, Refunding, GO Unlimited, BAM

 

2.00

 

01/01/17

   

220,000

     

220,000

 

Fort Thomas Independent School District Finance Corp., Series C

 

2.00

 

11/01/17

   

465,000

     

468,413

 

Hardin County Water District No. 2, Refunding, Series C

 

2.00

 

01/01/17

   

180,000

     

180,000

 

Kentucky Municipal Power Agency, Power System Revenue, Prairie State Project, Series A, NATL

 

5.25

 

09/01/22

   

440,000

     

452,065

 

Louisville & Jefferson County Metropolitan Sewer District, Series A

 

5.00

 

05/15/23

   

500,000

     

566,910

 
                     

1,887,388

 
                         

Louisiana 1.73%

 

Louisiana Office Facilities Corp, Refunding

 

5.00

 

11/01/17

   

700,000

     

721,392

 

Louisiana State, GO Unlimited, Series A

 

5.00

 

08/01/26

   

800,000

     

924,120

 
                     

1,645,512

 
                         

Massachusetts 1.20%

 

Massachusetts State, Refunding, GO Limited, Series C

 

5.00

 

04/01/22

   

800,000

     

919,640

 

Stoughton, Massachusetts Public Improvement, GO Limited, NATL

 

4.00

 

05/01/17

   

225,000

     

225,509

 
                     

1,145,149

 

 

See notes to portfolios of investments and notes to financial statements.

 

59

 


Near-Term Tax Free Fund
Portfolio of Investments

December 31, 2016

 

Municipal Bonds (cont'd)

 

Coupon
Rate %

 

Maturity
Date

 

Principal
Amount

   

Value

 
                     

Michigan 3.86%

 

Detroit, Michigan Local Development Financing Authority, Refunding, Tax Allocation, Series A

 

5.38

 

05/01/18

 

$

70,000

   

$

70,057

 

Gibraltar, Michigan School District, Refunding, GO Unlimited, AGM

 

5.00

 

05/01/21

   

475,000

     

522,500

 

Michigan Public Power Agency AFEC Project Revenue, Series A

 

4.50

 

01/01/19

   

280,000

     

295,098

 

Michigan State, Trunk Line Revenue, Refunding

 

4.50

 

11/01/26

   

105,000

     

112,495

 

Michigan State Hospital Finance Authority, Trinity Health, Series A

 

6.00

 

12/01/18

   

200,000

     

217,594

 

Michigan Strategic Fund, Series A, AGC

 

5.00

 

10/15/17

   

200,000

     

205,926

 

Oxford Area Community School District, GO Unlimited, Series A, Q-SBLF

 

5.00

 

05/01/22

   

365,000

     

415,268

 

Portage Public Schools, School Building & Site, GO Unlimited, AGM

 

5.00

 

05/01/20

   

300,000

     

315,066

 

Romeo Community School District, Refunding, GO Unlimited, Q-SBLF

 

3.00

 

05/01/18

   

500,000

     

509,840

 

Wayne County, Michigan Airport Authority Revenue, Detroit Metropolitan Airport, Refunding, Series C

 

4.00

 

12/01/19

   

255,000

     

268,288

 

Wyoming, Michigan, Water Supply System, Refunding

 

4.00

 

06/01/20

   

215,000

     

229,964

 

Zeeland Public Schools, Refunding, GO Unlimited

 

5.00

 

05/01/18

   

490,000

     

512,756

 
                     

3,674,852

 
                         

Minnesota 1.17%

 

Chaska, Minnesota Electric Revenue, Refunding, Series A

 

3.00

 

10/01/17

   

535,000

     

542,372

 

Lake Washington Sanitary District, GO Unlimited, Series A, AGM

 

2.00

 

02/01/18

   

205,000

     

207,005

 

Minneapolis & St Paul, Minnesota Metropolitan Airports Commission, Airport Revenue, Airport Revenue, Refunding, Series B, NATL

 

5.00

 

01/01/19

   

255,000

     

255,000

 

Royalton Independent School District No. 485, GO Unlimited, Series A

 

5.00

 

02/01/17

   

110,000

     

110,333

 
                     

1,114,710

 
                         

Mississippi 0.42%

 

Rankin County School District, GO Limited

 

2.00

 

08/01/19

   

400,000

     

402,200

 

 

See notes to portfolios of investments and notes to financial statements.

 

60

 


Near-Term Tax Free Fund
Portfolio of Investments

December 31, 2016

 

Municipal Bonds (cont'd)

 

Coupon
Rate %

 

Maturity
Date

 

Principal
Amount

   

Value

 
                     

Missouri 2.38%

 

Jackson County, Missouri, Special Obligation Refunding, Truman Sports Complex Project

 

5.00

 

12/01/18

 

$

215,000

   

$

228,747

 

Kansas City, Missouri, Refunding, Series B

 

5.00

 

08/01/19

   

650,000

     

703,580

 

Kansas City, Missouri Water Revenue, Series F, AGM

 

4.00

 

12/01/22

   

250,000

     

277,423

 

Missouri Development Finance Board, Eastland Center Project, Tax Allocation, Series A

 

5.00

 

04/01/17

   

250,000

     

252,320

 

Missouri State Health & Educational Facilities Authority, Southwestern Baptist University Revenue

 

3.00

 

10/01/17

   

265,000

     

267,965

 

Missouri State Regional Convention & Sports Complex Authority

 

5.00

 

08/15/19

   

500,000

     

541,425

 
                     

2,271,460

 
                         

New Hampshire 0.65%

 

New Hampshire, Federal Highway Grant Anticipation Bonds

 

5.00

 

09/01/17

   

200,000

     

205,024

 

New Hampshire Health & Education Facilities Authority Revenue, Southern New Hampshire University Project

 

5.00

 

01/01/18

   

400,000

     

414,656

 
                     

619,680

 
                         

New Jersey 3.16%

 

Atlantic City, New Jersey, Refunding Tax Appeal, GO Unlimited

 

4.00

 

11/01/18

   

500,000

     

417,695

 

Atlantic City, New Jersey Municipal Utilities Authority Revenue, Refunding, AMBAC

 

5.00

 

06/01/17

   

150,000

     

150,155

 

Camden County, New Jersey Improvement Authority, Refunding

 

4.00

 

01/15/18

   

600,000

     

617,418

 

Cumberland County, New Jersey Improvement Authority, Technical High School Project, AGM

 

3.00

 

09/01/17

   

550,000

     

556,765

 

Elizabeth, New Jersey Parking Authority Project Revenue, Elizabethtown Plaza Redevelopment, Series B

 

4.00

 

11/01/17

   

255,000

     

261,033

 

Hudson County, New Jersey Improvement Authority Lease Revenue, North Hudson Regional Fire, Refunding, Series A, AGM

 

5.63

 

09/01/18

   

400,000

     

427,144

 

Passaic Valley, New Jersey, Sewage Commissioners Revenue, Series G

 

5.75

 

12/01/21

   

500,000

     

578,070

 
                     

3,008,280

 

 

See notes to portfolios of investments and notes to financial statements.

 

61

 


Near-Term Tax Free Fund
Portfolio of Investments

December 31, 2016

 

Municipal Bonds (cont'd)

 

Coupon
Rate %

 

Maturity
Date

 

Principal
Amount

   

Value

 
                     

New York 9.54%

 

Arlington Central School District, GO Unlimited

 

5.00

 

12/15/25

 

$

1,000,000

   

$

1,157,619

 

Greece, New York Central School District, GO Unlimited

 

2.00

 

06/15/19

   

455,000

     

459,018

 

Long Island Power Authority Revenue, Series B

 

5.00

 

09/01/21

   

465,000

     

523,836

 

Nassau County Industrial Development Agency, New York Institute of Technology Project Revenue, Refunding, Remarketing, Series A

 

5.00

 

03/01/21

   

350,000

     

386,243

 

New York City, GO Unlimited, Series B

 

5.00

 

08/01/19

   

400,000

     

434,556

 

New York City, GO Unlimited, Series E

 

5.25

 

08/01/22

   

875,000

     

1,018,210

 

New York City, GO Unlimited, Series I

 

5.00

 

08/01/22

   

1,000,000

     

1,150,599

 

New York State Dormitory Authority, Nonconstruction Supported Debt, Municipal Facilities Health Lease, Series 1

 

5.00

 

01/15/17

   

300,000

     

300,351

 

New York State Thruway Authority, Series B

 

5.00

 

04/01/27

   

1,335,000

     

1,374,395

 

New York State Urban Development, Series D

 

5.50

 

01/01/19

   

250,000

     

270,190

 

New York State Urban Development, NATL

 

5.50

 

03/15/19

   

615,000

     

670,129

 

North Castle, New York, Public Improvement, GO Unlimited

 

3.88

 

12/01/22

   

210,000

     

214,851

 

Patchogue-Medford Union Free School District, GO Unlimited

 

5.00

 

10/01/17

   

465,000

     

478,197

 

Sodus, New York Central School District, Refunding, GO Unlimited

 

3.00

 

06/15/18

   

640,000

     

655,424

 
                     

9,093,618

 
                         

North Carolina 2.29%

 

Beaufort County, North Carolina, GO Limited

 

5.00

 

06/01/21

   

200,000

     

223,744

 

Charlotte, North Carolina Certificates of Participation, Series A

 

5.00

 

10/01/21

   

1,000,000

     

1,114,409

 

North Carolina Medical Care Commission, Firsthealth Carolina Project, Refunding, Series C

 

4.00

 

10/01/17

   

420,000

     

429,152

 

North Carolina State Municipal Power Agency #1, Catawba Electric Revenue, Refunding, Series A

 

5.25

 

01/01/20

   

400,000

     

416,404

 
                     

2,183,709

 
                         

Ohio 1.01%

 

Cleveland, Ohio, Parking Facility Revenue, Prefunding, Refunding, AGM

 

5.25

 

09/15/22

   

130,000

     

152,247

 

Lorain County, Ohio, Community College District, Revenue

 

3.25

 

12/01/17

   

650,000

     

662,968

 

 

See notes to portfolios of investments and notes to financial statements.

 

62

 


Near-Term Tax Free Fund
Portfolio of Investments

December 31, 2016

 

Municipal Bonds (cont'd)

 

Coupon
Rate %

 

Maturity
Date

 

Principal
Amount

   

Value

 
                     

Ohio (cont’d)

 

Marion County, Ohio, Variable Refunding, GO Limited, AGC

 

4.00

 

12/01/20

 

$

150,000

   

$

150,173

 
                     

965,388

 
                         

Oklahoma 0.35%

 

Oklahoma State Agricultural & Mechanical Colleges, Oklahoma State University, Series A

 

5.00

 

08/01/21

   

300,000

     

332,187

 
                         

Oregon 0.23%

 

Oregon State Facilities Authority, Legacy Health Project Revenue, Refunding, Series A

 

4.50

 

05/01/20

   

200,000

     

216,592

 
                         

Pennsylvania 3.17%

 

Allegheny County, Pennsylvania Sanitary Authority, AGM

 

5.00

 

06/01/19

   

700,000

     

755,069

 

Delaware Valley, Pennsylvania, Regional Financial Authority Revenue, Permanently Fixed Business Development Services, AMBAC

 

5.50

 

08/01/18

   

295,000

     

313,550

 

Muhlenberg Township, Pennsylvania, GO Unlimited, AGM

 

3.00

 

11/01/17

   

280,000

     

281,795

 

Pennsylvania Higher Educational Facilities Authority, State System, Higher Education Project, Refunding, Series AQ

 

5.00

 

06/15/17

   

275,000

     

279,925

 

Philadelphia School District, Pennsylvania, Refunding, GO Unlimited, Series E

 

5.25

 

09/01/24

   

625,000

     

664,625

 

Reading, Pennsylvania School District, GO Unlimited, Series A

 

5.00

 

04/01/20

   

400,000

     

433,900

 

Wilkes-Barre Finance Authority, University of Scranton, Refunding, Series A

 

5.00

 

11/01/19

   

275,000

     

295,559

 
                     

3,024,423

 
                         

South Carolina 1.00%

 

Spartanburg County, South Carolina Regional Health Services District, Hospital Revenue, Refunding, Series A

 

5.00

 

04/15/19

   

600,000

     

642,924

 

Spartanburg County, South Carolina Sanitation Sewer District, Series A, AGC

 

3.50

 

03/01/19

   

300,000

     

312,609

 
                     

955,533

 

Tennessee 0.23%

 

Memphis, Tennessee Sanitary Sewage System Revenue, Refunding, AGM

 

5.00

 

05/01/20

   

200,000

     

221,364

 

 

See notes to portfolios of investments and notes to financial statements.

 

63

 


Near-Term Tax Free Fund
Portfolio of Investments

December 31, 2016

 

Municipal Bonds (cont'd)

 

Coupon
Rate %

 

Maturity
Date

 

Principal
Amount

   

Value

 
                     

Texas 23.95%

 

Addison, Texas Certificates of Obligation, GO Limited

 

4.50

 

02/15/28

 

$

140,000

   

$

145,335

 

Addison, Texas Certificates of Obligation, GO Limited

 

4.00

 

02/15/20

   

250,000

     

258,153

 

Arlington, Texas, GO Limited, Series B

 

2.00

 

08/15/19

   

500,000

     

505,860

 

Beaumont Independent School District, GO Unlimited, PSF-GTD

 

5.00

 

02/15/23

   

1,000,000

     

1,004,670

 

Bryan Independent School District, GO Unlimited, Series A, PSF-GTD

 

5.00

 

02/15/22

   

410,000

     

469,040

 

Cedar Hill Texas, Refunding, GO Limited

 

5.00

 

02/15/22

   

800,000

     

918,136

 

Center, Texas Certificates of Obligation, GO Limited, AGM (ZCB)

 

3.55(1)

02/15/20

   

150,000

     

139,313

 

Clear Lake, Texas, Waterworks & Sewer System, GO Unlimited

 

3.00

 

03/01/19

   

125,000

     

129,311

 

Conroe Independent School District, GO Unlimited, PSF-GTD

 

4.00

 

02/15/17

   

55,000

     

55,196

 

Corpus Christi, Texas Business & Job Development Corporation, Seawall Project, Sales Tax Revenue, Refunding

 

5.00

 

03/01/20

   

350,000

     

382,620

 

Culberson County-Allamoore Independent School District, GO Unlimited, PSF-GTD

 

3.00

 

02/15/19

   

860,000

     

887,606

 

Dallas, Texas Waterworks & Sewer System Revenue, Unrefunded, AMBAC

 

4.50

 

10/01/19