Gold And Health Care Stocks Get A Clean Bill Of Health

Gold And Health Care Stocks Get A Clean Bill Of Health by Frank Holmes

Even though the Federal Reserve announced this week that it would wait a little longer to raise rates, spooked investors fled to gold bullion, helping to drive prices above $1,200 an ounce. It was the greatest single-session surge by percentage in nearly a month and a half for the yellow metal, widely seen as a safe-haven investment. As I told MarketWatch yesterday, $1,200 is an important threshold for gold miners because it helps increase profitability and spur production.

The market move can be attributed not only to the Fear Trade—interest rate jitters and the Greek financial crisis—but also to the Love Trade. Heading into late June, the yellow metal has historically hit a trough and then rebounded on account of the approaching Indian festival and wedding seasons, a traditional time for gold gift-giving. I mentioned in a Frank Talk this week that in all but two of the past 27 years, gold and gold equities enjoyed a late summer rally, and that between 2001 and 2014, the metal posted an average 14.9-percent gain between midsummer and mid-autumn.

At the same time, it’s important for investors to keep in mind that gold has its own DNA of volatility. For the 12-month period over the last 10 years, gold’s volatility has been plus or minus 19 percent.

Other factors that could be influencing gold markets right now are China and, believe it or not, the State of Texas. The Asian giant is buying massive amounts of the metal to back the renminbi, which it purportedly wants to elevate to a world-class reserve currency. Similarly, Texas will be bringing home between $650 million and $1 billion worth of bullion from the Federal Reserve, as it’s in the early stages of creating the first state-run gold depository.

Global Pharmaceutical Spending Could Reach $1.3 Trillion by 2018

Besides gold, we’re also finding strength in health care, the best-performing S&P 500 Index sector for not only the week but also the one-, three-, five- and 10-year periods.

It’s easy to see why. According to health care information and technology company IMS Health, total pharmaceutical spending around the globe is expected to reach $1.3 trillion in just three years’ time. Although the U.S. remains the largest market in the world, China is set to experience the largest spending growth as its population continues to swell and incomes rise.

Indeed, in many parts of the world, the fastest-growing demographic is those aged 65 and older, a cohort that is much more likely to be prescribed medicines and require other health care treatments and services. Because of rising life expectancy, the number of centenarians—those over 100—is projected to grow 10-fold between 2010 and 2050, according to the National Institute on Aging.

As a result, the number of people over 65 will, for the first time ever, make up a larger percentage of the world’s population than those under five. This bifurcation should continue to widen as even more people live longer and reach advanced ages.

2015 Health Care M&As Expected to Top 2014’s Record $114 Billion

Last year, health care companies benefited from a series of business deals, all of which totalled a record $114 billion. We’re only halfway through the year, and already we’ve seen close to $100 billion worth of mergers, acquisitions and other deals, one of the biggest being CVS’s takeover of Target’s pharmaceutical business for $2 billion.

Below, you can see how some of the growthier health care companies we hold in our Holmes Macro Trends Fund (MEGAX)—Canadian drug-maker Valeant,  insurance company Cigna and hospital-operator HCA Holdings—have outperformed the S&P 500 Health Care Index year-to-date. All three companies recently hit all-time highs.

Valeant, maker of a wide range of best-selling drugs, has managed to expand over the years through a host of strategic acquisitions, including eyecare company Bausch + Lomb and specialty pharma company Salix Pharmaceuticals. It’s reported that a Valeant insider has recently purchased $1.8 million in company stock, usually a good sign of future growth. Meanwhile, Cigna shares had a boost when the market learned that rival insurers Anthem and Aetna expressed interest in buying the Connecticut-based company.

Because of a growing (and aging) population and the emergence of a truly global middle class, we see health care as a strong performer for the long-term. Along with information technology and consumer discretionary, we are overweight health care right now, which has helped MEGAX beat its benchmark, the S&P Composite 1500 Index, year-to-date.

This Asset Class Could Earn You More Income Than Treasuries, and They’re Tax-Advantaged

In a recent Barron’s article, investors are reassured that even though the municipal bond market has contracted for the last three months largely because of concerns about rising interest rates, now might be a great time to get into shorter-term munis. In fact, according to Bloomberg, households are increasingly moving away from individual muni bonds and into actively-managed muni mutual funds.

Seekers of fixed income, Barron’s says, can earn more “from a triple-A rated muni maturing in 15 years than they can from a Treasury—roughly 2.8 percent versus 2.6 percent.”

The muni, moreover, is tax-free at the federal level and, in many cases, the state level.

Our Near-Term Tax Free Fund (NEARX) invests mostly in quality, short-term municipal bonds. Having provided investors with over 20 straight years of positive returns, NEARX holds five stars overall from Morningstar, among 185 Municipal National Short-Term funds as of 5/31/2015, based on risk-adjusted return.

Index Summary

• The major market indices finished up this week.  The Dow Jones Industrial Average gained 0.64 percent. The S&P 500 Stock Index gained 0.75 percent, while the Nasdaq Composite rose 1.30 percent. The Russell 2000 small capitalization index gained 1.55 percent this week.
• The Hang Seng Composite fell 2.66 percent this week; while Taiwan fell 0.90 percent and the KOSPI fell 0.25 percent.
• The 10-year Treasury bond yield fell 13 basis points to 2.26 percent.

Domestic Equity Market

Strengths

• Less cyclical sectors such as health care, staples and utilities outperformed this week as investor confidence remains relatively weak. Government bonds rallied as well, with the yield on the U.S. government 10-year note falling 13 basis points to 2.26 percent.
• Building permits for the month of May came in at 1,275 units versus an expected 1,100 units. The recent data pertaining to housing has been a strong point in the U.S. economy.
• This week the Federal Reserve Open Market Committee (FOMC) left rates unchanged as expected. The continuation of a zero interest rate policy is positive for stocks.

Weaknesses

• Germany’s ZEW survey of expectations came in much weaker than expected. This is particularly concerning at a time when the eurozone is stepping up its easing policies.
• Core consumer prices in the U.S.  rose by a mere 0.1 percent for the prior month. Continued weak inflation is a troubling sign for the economy.
• Industrial production month-over-month contracted in May, adding another piece of evidence to the case that the U.S. economy is slowing down.

Opportunities

• The U.S. Markit Manufacturing purchasing managers’ index (PMI) for the month of June will be released next week. It is set to slightly increase, which should be positive for more cyclical areas.
• The University of Michigan Consumer Sentiment Index is expected by analysts to remain at elevated levels, which could bode well for consumer-oriented stocks.
• The U.S. dollar appears to be solidifying its downtrend as it fell for the third straight week. Companies with high foreign revenue exposure could benefit.

Threats

• Despite the positive market reaction to the Federal Reserve this week, it still remains relatively clear that the rate liftoff is set for this year. If this does in fact turn out to be too soon, markets could contract.
• U.S. GDP growth for the first quarter is set to be revised to a contraction of 0.2 percent, and although this is better than the previous estimate, it is still an absolute negative.
• Durable goods orders for the month of May are set to contract by 0.7 percent. Continued weakness from this indicator is weighing on certain industrial areas.

The Economy and Bond Market

Greece moved closer to a debt default as talks to extend its financial bailout reached another stalemate. In response, European financial market volatility rose and the yield premium between Germany’s “safe-haven” bunds and bonds issued by Spain, Italy and Portugal rose to its highest level this year. U.S. data firmed, adding to speculation that the Federal Reserve could raise rates in September. Fed policymakers indicated the pace of further rate hikes could be slowed after this year, and U.S. stock indices rose in response to this more dovish stance. The yields on the 10-year U.S. Treasury note and the 10-year German bund ended the week at 2.26 percent and 0.75 percent, respectively. Oil prices were relatively stable, with U.S. West Texas Intermediate (WTI) crude oil ending the week just under $60 per barrel and Brent crude below $63.

Strengths

• While households remain the largest holders of municipal bonds, mutual funds have played an increasing role in the muni market since the financial crisis. Mutual funds’ market share in municipal bonds has increased from 10.87 percent in 2006 to 18.21 percent in 2014. Direct holdings by individuals have been declining because of the changing market structure with the loss of bond insurers. As insurance has been reduced, diversification has become more valuable, causing individuals to be more willing to pay for professional management.
• The NAHB/Wells Fargo Housing Market Index increased to 59 in June from 54 in May, above expectations of 56. The present single family sales index increased to 65 from 58, the future single family sales index increased to 69 from 63, and the prospective buyers traffic index increased to 44 from 39. There was broad improvement across all regional indices. This report is consistent with other positive measures of the housing market during the spring and early summer. Additionally, building permits jumped 11.8 percent month-over-month to 1,275,000 from 1,140,000 (revised modestly from 1,143,000), representing the highest level of permits since September 2007 and coming in above expectations for 1,100,000. The data implies a continued trend higher in construction.

• The Philadelphia Federal Index jumped to 15.2 in June from 6.7 in May, above expectations of an increase to 8.0. On an Institute for Supply Management (ISM)-adjusted basis, the index moved up to 52.0 from 50.3. Further above the 50-level suggests expansion in manufacturing activity. Overall, the report suggests solid regional manufacturing.

Weaknesses

• The Empire State Manufacturing Survey decreased to -1.98 in June from 3.09 in May, coming in below expectations of an increase to 6.00. The ISM-adjusted index also fell to 51.9 in June from 52.1 in May.
• Housing starts pulled back 11.1 percent month-over-month to 1,036,000 in May from 1,165,000 in April (revised up from 1,135,000), partly reversing the 22.1-percent month-over-month gain in April. Expectations were for a smaller 4.0-percent decline to 1,090,000. All regions saw declines in starts.
• Industrial production declined 0.2 percent month-over-month in May, down from a downwardly revised 0.5 percent decline in April (from a 0.3 percent decline initially) and below the expected 0.2-percent month-over-month increase. This left capacity utilization to slip down to 78.1 percent from 78.3 percent in April (revised up from 78.2 percent initially). This was below expectations of 78.3 percent.

Opportunities

• Final GDP data for the first quarter could be revised higher to show a modest increase rather than shrinkage at an annualized rate of 0.7 percent.

• Sales of previously-owned homes likely recovered last month after falling unexpectedly in April, data from the National Association of Realtors is expected to show. Economists expect existing home sales to have jumped 4.4 percent to a 5.26 million unit-rate in May.
• Economists expect the proxy for business spending (durable goods orders) rose by 0.2 percent in May after falling 1 percent in April. New home sales may have edged up a little further after the 6.8-percent gain in May. Data should confirm that home prices are rising at an annual rate of just over 5 percent in April.

Threats

• Flash purchasing managers’ index (PMI) results for both manufacturing and services in June will provide important information about growth momentum and hiring at the end of the second quarter. A continuation of the downtrend seen in the past two months would provide a conflicting contrast to strength seen in recent jobs and housing reports.
• Markets head into a quieter week in terms of data, so the biggest focus is likely to be the back and forth in the Greek debt crisis. Emergency weekend meetings are unlikely to resolve the situation, and with some from the European Central Bank (ECB) warning that Greece may not open its banks on Monday and also that officials won’t do anything to counter short-term volatility, the latest round of talks scheduled for Monday could create some potential volatility in markets. This would most notably be transmitted through the euro, which has had substantial ups and downs depending on which rumor about a deal or no deal was out in the stratosphere.

• With the odds of an initial rate hike later this year increasing in recent weeks, volatility could pick up in the market as we approach lift-off. This could be the catalyst for the long-talked about correction that some pundits say the market is overdue for.

Gold Market

For the week, spot gold closed at $1,200.80 up $19.15 per ounce, or 1.62 percent. Gold stocks, as measured by the NYSE Arca Gold Miners Index, gained 0.31 percent. The U.S. Trade-Weighted Dollar Index fell 0.88 percent for the week.

Date	Event	Survey	Actual	Prior
June -16	Germany CPI YoY	0.70%	0.70%	0.70%
June -16	Germany ZEW Survey Current Situation	63	62.9	65.7
June -16	Germany ZEW Survey Expectations	37.3	31.5	41.9
June -16	U.S. Housing Starts	1090K	1036K	1135K
June -17	Europe CPI Core YoY	0.90%	0.90%	0.90%
June -17	U.S. FOMC Rate Decision (Upper Bound)	0.25%	0.25%	0.25%
June -18	U.S. CPI YoY	0.10%	0.00%	-0.20%
June -18	U.S. Initial Jobless Claims	277K	267K	279K
June -23	Markit China PMI Mfg	49.5	—	49.2
June -23	U.S. Durable Goods Orders	-0.70%	—	-0.50%
June -23	U.S. New Home Sales	525K	—	517K
June -24	U.S. GDP Annualized QoQ	-0.20%	—	-0.70%
June -25	Hong Kong Exports YoY	0.90%	—	2.20%
June -25	U.S. Initial Jobless Claims	273K	—	267K

Strengths

• Gold traders are the most bullish in a month on the prospect of slower U.S. interest rate increases. Gold saw a second weekly advance after efforts to secure a Greek bailout faltered and the Federal Reserve signaled a more dovish stance on interest rate increases. Shanghai Gold Exchange withdrawal volume in the week to June 12 came in at a strong 46.2 metric tonnes.
• The Bank of China will become the first Chinese bank to join the auction process that sets gold prices in the London market. The bank, along with seven other lenders, will start participating in the twice-daily electronic auction. The addition of a Chinese bank is another sign that China is increasing its influence in gold and currency markets worldwide.
• Cornerstone Macro’s survey shows that neutral investor sentiment is at a 25-year high, with both bears and bulls disappearing. Such ambiguity could quickly translate to panic given a rise in volatility in the markets.

• The gold monetization scheme in India aims to unlock the value of jewelry sitting idle. However, the current plan may not be enough to lure people to park their gold in a scheme that offers one gram for every 100 in a year. Furthermore, it may prove difficult to overcome people’s sentimental attachment to their jewelry assets placed on deposit as they will be melted for only a 1-percent return.

Weaknesses

• Morgan Stanley sees gold prices under pressure for the rest of the year given expectations for an increase in U.S. interest rates along with subdued retail demand. They also mention the rapidly strengthening equity markets in China drawing investors away from gold as well as the heavy rains in India putting a dampener on Indian demand.

• The managing director for the Far East region at the World Gold Council said that a gold upheaval is unlikely when the U.S. raises interest rates. Instead, higher rates may create adjustments in the gold market. Additionally, Kitco Metals noted sales are down 13 percent from this time last year. Silver sales are down 17 percent.
• According to Metals Focus, silver prices will likely average in the high $15-per-ounce level during the summer but rise to the $16 level in the fall. Average prices in 2015 are likely to be about 15 percent lower than last year, but rise about 10 percent in 2016 as the uncertainty over interest rates fades with the expected gradual increase in U.S. rates. Weakness in platinum is apparent with prices slumping to a six-year low.

Opportunities

• China continues to be one of the world’s largest buyers of gold as shown by the increased offtake of physical deliveries from the Shanghai Gold Exchange as the country is working towards establishing the renminbi as a reserve currency.  Another factor that could drive gold higher could be a rotation of funds within the country.

• Policymakers squelched the run in the Chinese real estate market, pushing billions of dollars into the country’s stock market. If Chinese investors suddenly sour on stocks, their next move could be to gold. Furthermore, Paradigm Capital published a study looking at what the next gold upcycle might look like. Taking into consideration the past five upcycles, they determine there is an 80-percent probability that gold will average over $1,540 per ounce, and could move much higher than $1,940 over the next three to four years.

• Low interest rates, private equity and some miners flush with cash while others are in need of major debt reduction, may cause a sharp increase in precious metals mergers and acquisitions (M&As) this year. Bloomberg shows that deals for gold mines reached a two-year high in the second quarter and the premium paid for public gold companies soared, and was the second highest over the past 12 years. This bodes well for further consolidation in the industry and highlights how cheap current valuations are.

• Klondex Mines reported that the Water Pollution Control Permit for its Fire Creek project is in hand, and the tonnage cap linked to Fire Creek’s operations is now lifted. Upcoming catalysts include resource updates for Fire Creek and Midas incorporating positive drill results released this year, the Midas TSF expansion permit to increase tailing storage capacity, a potential U.S. listing and inclusion in major gold equity indices, and the Fire Creek Environmental Assessment approval.

Threats

• A record number of investors told Bank of America Merrill Lynch this month that they have taken out protection against falling stocks over the next three months. According to Alan Ruskin from Deutsche Bank, 2015 will go down as the year when major central banks hit an inflection point in their willingness to distort and manipulate markets. Thus, the mix of overt and subtle withdrawal of market support is a key macro driver of recent market volatility.

• Apparently regulators care much more about manipulation of the stock market than gold. This is because the sentence handed down to Mirus Futures for allegedly spoofing the gold futures market in February 2014 was only $200,000, while Nav Sarao, the kid who allegedly spoofed the S&P 500 Index in 2010, could spend up to 380 years in jail.
• According to the latest plans for a gold monetization scheme in India, sovereign gold bonds will provide a good alternative for investors, and if subscribed fully in the first year, it will result in a saving of $2 billion on imports of bullion at current prices. This would represent 27 percent of the 2014 investment demand. The rate of interest will be linked to the international rate for gold borrowing, but with 2 percent as the indicative lower limit and interest rates will be paid in terms of grams of gold.

Energy and Natural Resources Market

Strengths

• Precious metals stocks outperformed this week as the Federal Reserve kept policy rates unchanged, coming across as more dovish to investors. The NYSE Arca Gold Miners Index rose 0.31 percent and the Global X Silver Miners ETF rose 2.92 percent.
• Despite the dollar’s decline, packaged food stocks outperformed in a more risk-off environment. The S&P Supercomposite Packaged Foods Index rose 2.59 percent this week.
• Utilities had a bounce this week as the 10-year yield retreated. The S&P 500 Utilities Index rose 1.47 percent this week.

Weaknesses

• Iron and steel producers underperformed this week as concerns over China’s and other emerging markets’ growth remains elevated. The Bloomberg World Iron/Steel Index fell 4.67 percent this week.
• Oil and gas drillers fell this week as oil lacks momentum. The S&P Supercomposite Oil & Gas Drilling Index fell 4.78 percent this week.
• Coal stocks continued their downtrend. The Market Vectors Global Coal Index fell 2.56 percent this week.

Opportunities

• The dollar appears to be in a clear downtrend. The greenback’s strength over the past few months has been a severe headwind for commodities. A pullback is much welcomed.
• Despite the slight rebound in oil prices, the rig count continues to fall. The Baker Hughes oil rig count fell by two to 857 this week.
• Full implementation of China’s “one belt, one road” trade route with Europe could boost steel demand in China by 5 percent.

Threats

• A proposal has been submitted by the Obama administration to increase fuel-economy requirements for trucks by 24 percent by 2027. This new regulation could be a setback for certain transports.
• China’s flash purchasing managers’ index (PMI) results for the prior month will come out next week. With the previous releases disappointing markets, this could cause a pullback in resource-related stocks.

• Copper prices remained relatively flat this week despite a weak China Fixed Assets Investment report.  However, if the current trend continues, copper prices may weaken over the summer before seasonal strength later in the year.

Emerging Markets

Strengths

• Indian equities saw their first positive week in a while. Heavier-than-expected rainfall during monsoon season should provide relief to the farming industry and prevent a spike in food prices. The S&P BSE SENSEX Index rose 3.37 percent this week.
• Turkish equities bounced back after their selloff last week following disappointing election results. The rhetoric surrounding the formation of a coalition government has been muted, a positive for maintaining market volatility. The Borsa Istanbul 100 Index rose 2.39 percent last week.
• The U.S. dollar closed down again this week, bringing the count to three straight weeks for the currency. As time progresses, the dollar seems to be in a downtrend, which is a positive sign for emerging markets.

Weaknesses

• Greece and its creditors failed to reach an agreement this week, causing Greek equities to underperform. As outflows continue, Greek banks received an increase in emergency-lending assistance funds. The Athens Stock Exchange General Index fell 11.25 percent this week.
• Chinese equities pulled back sharply this week. Liquidity is temporarily frozen in anticipation of various initial public offerings next week. The Shanghai Stock Exchange Composite Index fell 13.32 percent this week.
• Hungarian stocks fell for the third straight week as regional concerns continue to weigh on markets. The Budapest Stock Exchange Index fell 1.87 percent this week.

Opportunities

• The central banks of Hungary, the Czech Republic and Turkey will release their policy rate decisions next week. Analysts are expecting all three banks to maintain current rates. However, any unexpected easing could boost markets, all else equal.
• As you can see in the chart below, Greek banks are forming a traditional double bottom according to the FTSE/ATHEX Banks Index. These exceptionally cheap banks could be a great buying opportunity upon a settlement between Greece and its creditors.

• Although this week’s 13-percent drop in China A-Shares makes conspicuous news headlines, it has not significantly deviated from correction patterns in the 2005-2007 bull market. It was during that time that four episodes of double-digit percentage drawdowns, in hindsight, proved to be rare opportunities for accumulation.
• Seasonally, June is the worst calendar month for the A-Shares, as July tends to stage a recovery. The release of temporarily frozen liquidity for IPO subscriptions, along with the announcement of flash purchasing managers’ index (PMI) data for June, could act as near-term catalysts for a rebound in China A-Shares, boding well for H-Shares in general.

Threats

• Brazil’s economic activity for the prior month and most recent inflation data disappointed investors. With productivity contracting more than expected and inflation still on the rise despite recent rate hikes, Brazil remains a troubled market.
• Russian industrial production contracted sharply for the month of May, highlighting the damage the country’s economy is bracing for this year.

• Similarly, Russian retail sales were also down in May. Although the central bank lowered the key rate by 100 basis points to 11.5 percent, rates are still unacceptably high.
• The Indonesian rupiah remains susceptible to further weakness against a tightening scare in the U.S. The macro thesis of owning Indonesian stocks is being challenged as President Joko “Jokowi” Widodo’s 30-percent tax revenue growth assumption appears increasingly illusive in a slowing economy, therefore diminishing the likelihood of realizing a fresh infrastructure investment cycle, promised earlier. It might not be such a stretch to argue that, in U.S. dollar terms, the bear market in Indonesian equities has resumed.

Leaders and Laggards

Weekly Performance
Index	Close	Weekly Change($)	Weekly Change(%)
DJIA	18,014.28	+115.44	+0.64%
S&P 500	2,109.76	+15.65	+0.75%
S&P Energy	558.01	-2.59	-0.46%
S&P Basic Materials	315.85	+1.88	+0.60%
Nasdaq	5,117.00	+65.90	+1.30%
Russell 2000	1,284.66	+19.64	+1.55%
Hang Seng Composite Index	3,704.09	-101.23	-2.66%
Korean KOSPI Index	2,046.96	-5.21	-0.25%
S&P/TSX Canadian Gold Index	154.59	+0.32	+0.21%
XAU	66.65	+0.10	+0.15%
Gold Futures	1,200.40	+21.20	+1.80%
Oil Futures	59.46	-0.50	-0.83%
Natural Gas Futures	2.81	+0.06	+2.25%
10-Yr Treasury Bond	2.26	-0.13	-5.47%

 

Monthly Performance
Index	Close	Monthly Change($)	Monthly Change(%)
DJIA	18,014.28	-271.12	-1.48%
S&P 500	2,109.76	-16.09	-0.76%
S&P Energy	558.01	-23.12	-3.98%
S&P Basic Materials	315.85	-3.35	-1.05%
Nasdaq	5,117.00	+45.26	+0.89%
Russell 2000	1,284.66	+26.92	+2.14%
Hang Seng Composite Index	3,704.09	-203.80	-5.22%
Korean KOSPI Index	2,046.96	-92.58	-4.33%
S&P/TSX Canadian Gold Index	154.59	-12.91	-7.71%
XAU	66.65	-5.42	-7.52%
Gold Futures	1,200.40	-9.40	-0.78%
Oil Futures	59.46	+0.48	+0.81%
Natural Gas Futures	2.81	-0.10	-3.53%
10-Yr Treasury Bond	2.26	+0.01	+0.58%

 

Quarterly Performance
Index	Close	Quarterly Change($)	Quarterly Change(%)
DJIA	18,014.28	-113.37	-0.63%
S&P 500	2,109.76	+1.66	+0.08%
S&P Energy	558.01	-5.29	-0.94%
S&P Basic Materials	315.85	+6.29	+2.03%
Nasdaq	5,117.00	+90.58	+1.80%
Russell 2000	1,284.66	+18.29	+1.44%
Hang Seng Composite Index	3,704.09	+349.03	+10.40%
Korean KOSPI Index	2,046.96	+9.72	+0.48%
S&P/TSX Canadian Gold Index	154.59	-10.19	-6.18%
XAU	66.65	-2.62	-3.78%
Gold Futures	1,200.40	+14.20	+1.20%
Oil Futures	59.46	+13.74	+30.05%
Natural Gas Futures	2.81	+0.03	+0.93%
10-Yr Treasury Bond	2.26	+0.33	+17.14%

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