Going for the Gold – Frank Holmes

Updated on

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

Everyone wants the gold. Around the world, athletes train for years to compete for a gold medal. In Hong Kong and China, the Love Trade seeks gold coins, bars and jewelry.


We found out this week the extent that gold is sought in the East. For the first time since 1980, Switzerland released monthly gold trade data, providing a more transparent picture of physical gold flows.

In January alone, the Swiss report showed an incredible 80 percent of gold shipments went to Asia.

Switzerland plays a key role in the gold market because it is home to many big gold refiners, so its report confirms what we’ve been saying about gold’s move out of the West to the strong hands of the East.

So even though the gold price fell in 2013, the smart money tuned into this flow of physical gold that was moving into the East. Meanwhile, naysayers were distracted by the Fear Trade’s selling out of gold ETFs.

“Gold flooding onto the market as a result [of large-scale ETF selling] was used to feed the voracious appetite for physical metal among consumers in India, China and numerous Asian and Middle Eastern markets,” says the World Gold Council in its latest report. You can see in the chart that gold demand reached record levels in the jewelry, bar and coin areas of the market last year. In fact, there was a 21 percent increase in demand from consumers, which was in contrast to the outflows from gold ETFs, per the WGC.

Gold Jewelry, Bar and Coin Demand Resilient in 2013
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Along with this continued demand in January, Daniela Cambone from Kitco and I discussed the factors that could drive gold to $1,400 an ounce. Find out what those are now.

Opportunities Found by Rejecting an Old Investing Adage?
Following a great 2013, many U.S. stocks (an exception being gold stock indices) likely disappointed investors in January. For those who follow the investing adage, “as January goes, so goes the year,” the stock market may not be looking so bright for the rest of 2014.

But research suggests there are opportunities to be found.

“Negative Januarys do have interesting implications” for U.S. stocks, says Brian Belski of BMO Capital Markets. He recently dissected monthly S&P 500 performance, taking a look at the years when the market declines in January.

Stocks That Underperform in January Outperform the Rest of the Year
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I think you’ll be surprised at his results.

Going back 24 years, the stocks that performed the best in January significantly lagged for the rest of the year compared to the stocks that did the worst. See the results below, which show that the companies in the bottom quartile for January performance rose a significant 20 percent from February through December. The stocks that did the best in January rose only an average of 12 percent during the rest of the calendar year.

Belski’s analysis aligns with the recent poor performance in sectors that we previously identified as having strength over the past several months. Of the 10 sectors in the S&P 500, our models have identified consumer discretionary, health care and industrials sectors as having sustained leadership.

But in January, industrials and discretionary stocks were among the worst-performing sectors. Energy and materials were also in the bottom half.

Will the Sectors that Lagged in January Outperform the Rest of 2014?
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While past performance does not predict future results, BMO’s research suggests stocks in the lagging sectors could outperform for the rest of 2014. We are especially bullish on those dividend-paying companies experiencing robust fundamentals, including strong revenue and earnings growth.


Index Summary

  • Major market indices finished mixed this week.  The Dow Jones Industrial Average fell 0.32 percent. The S&P 500 Stock Index dropped 0.13 percent, while the Nasdaq Composite advanced 0.46 percent. The Russell 2000 small capitalization index rose by 1.34 percent this week.
  • The Hang Seng Composite rose 0.59 percent; Taiwan gained 1.04 percent while the KOSPI advanced 0.90 percent. The 10-year Treasury bond yield fell one basis point this week to 2.73 percent.

Domestic Equity Market

The S&P 500 Index was virtually unchanged this week. The market bounced around in a narrow range without making much real progress. Health care led the way on the back of merger and acquisition (M&A) activity while financials trailed as some of the big banks experienced modest declines.

S&P Economic Sectors
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  • The health care sector was the leader this week as generic drug maker Actavis agreed to acquire Forest Laboratories. Both stocks rose on the news with Actavis rising 13.8 percent and Forest Labs jumping 35.7 percent, posting the best performance in the S&P 500 this week.
  • The utilities sector was not far behind with strong performances from Ameren and Public Services Enterprise. Both companies beat earnings expectations and rose by more than 5 percent for the week.
  • Nabors Industries rose 21.6 percent this week. The company released quarterly earnings results, which were ahead of expectations, and is communicating enhanced visibility for its North American land drilling business.


  • The financials sector underperformed as index heavyweights Bank of America and Citigroup both fell by roughly 2.5 percent.
  • The consumer staples sector was also a laggard as Coca-Cola fell 4.5 percent and Wal-Mart fell 3.5 percent on poor earnings results.
  • US Steel was the worst performer in the S&P 500 this week, falling 8.19 percent. A U.S. Department of Commerce ruling on anti-dumping duties for tubular products was a disappointing development for domestic steel producers.


  • The current macro environment remains positive as economic data is robust enough to give investors confidence in an economic recovery, but not so strong as to force the Fed to aggressively change course in the near term.
  • Money flows are likely to find their way into domestic U.S. equities and out of bonds and emerging markets.
  • The improving economic situation could possibly drive equity prices well into 2014.


  • A short-term market consolidation period after such strong performance over the past six months cannot be ruled out.
  • Higher interest rates are a threat for the whole economy. The Fed must walk a fine line and there is a large potential for policy error.
  • A lot of good news potentially is priced into the market and the economy will need to deliver to maintain the positive momentum in the market.

The Economy and Bond Market

Treasury bond yields were little changed this week.  It seemed all the focus was on the Olympics as both stock and bond markets ended the holiday-shortened week little changed from the prior week. Economic data was mixed and inflation data remained benign.

10-Year Treasury Yield
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  • Inflation data remains benign with producer prices up 1.2 percent and consumer prices up 1.6 percent on a year-over-year basis.
  • The Conference Board’s leading index rose 0.3 percent in January, ahead of expectations and pointing to a reasonably good economic outlook.
  • Japan’s central bank continued to add to its monetary policy accommodation by increasing the loans available to commercial banks.


  • Housing data points were weak, with January housing starts falling 16 percent, existing home sales falling 5.1 percent and homebuilder sentiment dropping as weather impacted foot traffic.
  • The HSBC/Markit Flash manufacturing PMI for China fell again in February to 48.3, the second month in a row indicating contraction.
  • Factory data was also weak in the U.S. with the Philadelphia Fed manufacturing index falling into negative territory for the first time since May.


  • Fed minutes released this week confirmed the market’s thinking that tapering would proceed more or less as planned.
  • The International Monetary Fund (IMF) released a report this week highlighting the deflation risk in Europe. It is exactly this type of thinking that could spur additional easing policies from the European Central Bank.
  • There are many moving parts to the taper decision and although the Fed began the process, it is very possible that tapering could be delayed if the economy stumbles.


  • Several emerging market countries are raising interest rates at an aggressive pace to either deal with inflation or a weak currency. It could be the beginning of a new global interest rate cycle for higher rates.
  • Trade and/or currency “wars” cannot be ruled out which may cause unintended consequences and volatility in the financial markets.
  • Puerto Rico was recently downgraded to “junk” status and it highlights that roughly six years past the financial crisis, the fallout continues.

Gold Market

For the week, spot gold closed at $1,324.10, up $5.41 per ounce, or 0.41 percent. Gold stocks, as measured by the NYSE Arca Gold Miners Index, rose 1.00 percent. The U.S. Trade-Weighted Dollar Index rose 0.16 percent for the week.


  • Gold rose to a 15-week high as U.S. retail sales and housing starts slumped at the same time as Chinese manufacturing data fell to its lowest level in seven months. In addition, the political unrest in Ukraine and Thailand boosted gold’s haven premium. On a more positive note, gold demand in Japan jumped threefold in 2013 as investors sought refuge from Prime Minister Shinzo Abe’s campaign to stoke inflation. India’s gold demand remained buoyant in 2013, rising 13 percent from 2012 despite the government introducing several restrictions to curb imports. Lastly, JP Morgan raised its outlook on gold, saying prices are likely to hit $1,450 by the end of the year as fundamentals have turned bullish.
  • A recent report from the Swiss Customs Administration shows the European nation shipped more than 80 percent of its gold and silver bullion to Asia last month. The main destinations were Hong Kong, India and Singapore, while the main sources of gold imports were the U.K and the U.S. Despite the recent price recovery in gold, the demand from physical buyers in Asia continues to drive a wave of gold finding its way from weak hands into strong hands.
  • Mandalay Resources reported earnings this week, beating consensus expectations. Management continues to deliver in terms of growth and profitability, while returning value to shareholders via an attractive dividend. Similarly, Pan African Resources rose to a 14-month high as pretax profit jumped 30 percent in the first half of its financial year. The company said sales in the first half were buoyed as its Barberton Mines in South Africa increased the amount of gold sold from its newly commissioned Tailings Retreatment Project, and its Evander Mines in South Africa became fully integrated into the company.


  • The two “most accurate” gold forecasters are holding on to their bearish forecasts for 2014 even after the metal posted its best start to a year since 1983, according to a Bloomberg report. The report cites analysts at Societe General and Westpac Banking as the best forecasters over the past two years; however, what the report fails to convey is the fact that these analysts are permanently bearish on gold, and the 15-month recent downtrend favored their forecasts. Now that the fundamentals have changed and the downtrend has been broken, it would be wise to appraise these forecasts.
  • Yamana Gold took a $672 million before-tax impairment charge for 2013 as it examined its future cash flows and the intrinsic value of its reserves. The charges include $262 million on exploration properties which highlight the pervasive level of capital misallocation of the past years. In addition, OceanaGold posted an unexpected $47.9 million loss on impairment charges to its New Zealand assets in the face of a lower gold price.
  • AngloGold Ashanti announced a jump in production and a reduction of costs for the year 2013, but recognized it still has much to do before it can return to a positive cash flow generation. As a result, the group decided against a final dividend for the year. This situation is familiar for other gold producers who have cut their dividends in the recent quarter; Yamana Gold and Agnico Eagle come to mind.


  • UBS boosted its forecast for gold in 2014 citing a change in investors’ attitude toward the yellow metal. According to the bank’s analysts, over the past year gold was either the favorite asset to short or was ignored completely. Recent developments suggest that this is no longer the case and momentum is turning, the analysts added. Moreover, BCA Research published data showing gold mining shares were down more than 40 percent over the past year. As shown in the chart below, each decline of more than 40 percent since 1980 has given way to at least a tradable rally.

Will the Sectors that Lagged in January Outperform the Rest of 2014?
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  • Goldman Sachs is of the opinion that mining capital spending continues to decline, with 2015 mining capex estimates being reduced by 8 percent in the last three months alone. However, the key drivers of this reduction appear favorable: young equipment fleets, the winding down of projects and a focus on higher grade deposits. As a result, we may see higher near-term cash flows and a more disciplined capital allocation process.
  • India, which lost its crown to China last year as the top gold consumer, is likely to cut its import tax on gold before the end of February to 6 or 8 percent from the current 10 percent. The government initiative comes as pressure on the country’s current account deficit has scaled down, with recent data showing it has fallen by nearly 50 percent.


  • Despite an apparent lack of inflationary pressure in the U.S., and ongoing disinflationary trends in the eurozone, the continuous commodities index, which tracks commodity baskets, has risen sharply. Many agricultural commodities have strengthened following poor conditions in several geographies, and energy prices have increased following colder than usual winter weather. These increases may appear transitory, but the index shows a very strong correlation with inflation readings and, as such, we could see month-over-month inflation readings turn positive over the next couple months.
  • The Province of Quebec is seeking to preserve head offices in the province, even if that means thwarting bids. On the back of the recent bid for Osisko Mining, Quebec will move to enact legislation that shields businesses from takeovers by allowing the province to purchase stakes in the ownership of homegrown companies. The measures are aimed at preserving head-office jobs that help generate the C$5 billion in economic activity.
  • Although the current strike in the platinum industry is broader than previous events, the metal price reaction has been relatively muted so far. The strike was preannounced, giving the industry time to prepare, but should the current stalemate continue, some tightness could start to develop.

Energy and Natural Resources Market


Will the Sectors that Lagged in January Outperform the Rest of 2014?
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  • Natural gas futures climbed to a five-year high of $6.40 during Thursday’s trading session after weather forecasts indicated that temperatures may be lower than normal in the eastern two-thirds of the U.S. heading into the first week of March.
  • West Texas crude oil capped its sixth-weekly gain to $102 a barrel on strong heating oil demand.
  • Arabica coffee futures jumped 21 percent this week in New York, extending their year-to-date gain to 56 percent due to dry weather conditions in Brazil, which is a leading global exporter of the commodity.


  • China Investment Corp. ($600 billion sovereign-wealth fund) is selling energy and commodity holdings, attempting to capitalize on recovering economies. According to regulatory filings, a total of $1.5 billion in shares in energy companies have been sold. The fund could also be considering selling stakes in oil-sands projects.
  • Alcoa announced that it will permanently close its Point Henry aluminum smelter and rolling mills in Australia, after finding these have no prospects of becoming financially viable. Restructuring-related charges for 2014 with closures are expected between $250-270 million ($0.22-0.25/share) on an after-tax basis.


  • Repsol will sign a definitive $5 billion settlement over the seizure of YPF within days, a source involved in the talks said, ending a two-year bilateral dispute. Argentine President Cristina Fernandez nationalized Repsol’s majority stake in YPF in 2012, sparking a freeze on international investment in the prolific Vaca Muerta shale field.
  • Asia is expected to be the end market for many of the planned global liquefied natural gas (LNG) projects. Projections by Qatargas and Wood Macenzie estimate Asian LNG demand by 2025 at 350 million metric tonne per annum (mmtpa), versus180 mmtpa currently. Traditional importers such as Korea and Japan are also expected to grow, but perhaps at a slower rate than in the past.
  • Using forecast data through March 6, this U.S. winter remains the coldest since 2001 based on calculations of demand-weighted Heating Degree Days (HDD). Accordingly, it is estimated that the extent of the natural gas storage deficit will be large enough that by the start of next winter, storage levels may still be some 500 billion cubic feet below average even after assuming some production increase. The implication is that U.S. natural gas prices will need to remain high to incentivize utility switching to coal well into next winter.


  • Despite record production of grains last year, agriculture enters the 2014 growing season with a “pretty tight” stock situation, said USDA Chief Economist Joseph Glauber, speaking yesterday at the USDA Agricultural Outlook Forum. “If problems arise this year,” he said, referring to a potential production shortfall due to inclement weather or other exigencies, “we could see price spikes like we did in 2010 and 11.”


Frank Talk Insight for Investors
February 19, 2014
This Common Misconception about China May Be Hurting Your Portfolio
February 19, 2014
These Gold Charts Will Make Your Heart Beat Faster
February 12, 2014
This Commodity was the Decade’s Worst Performer, but Led in 2013
A Blog by Frank Holmes, C.E.O. and Chief Investment Officer

China Region Fund – USCOX  •  Emerging Europe Fund – EUROX

Emerging Markets


  • Polish January industrial output rose 4.1 percent from the previous year, above the 3.5 percent median estimate. Manufacturing rose 5.9 percent and output in the water supply and waste management sector grew 4.8 percent. In addition, the Polish Purchasing Managers’ Index (PMI) surged to a three-year high of 55.4 in January, despite similar data in the eurozone posting a tick down.
  • The Brazilian real advanced the most among emerging market currencies as Brazil reported higher-than-forecast foreign investment a day after the government pledged to reduce spending. The government announced that it would cut this year’s fiscal budget, allowing Brazil to meet a primary surplus target of 1.9 percent of gross domestic product. According to analyst commentaries, improved fiscal management will help slow inflation and allow the central bank to limit further increases in borrowing costs.
  • The Philippines’ overseas workers remittance in December rose by a higher-than-expected 9.1 percent year-over-year to a record $2.16 billion, the fastest pace in a year.  According to World Bank estimates, remittances still accounted for around 10 percent of the country’s GDP in 2013.


  • This was another fund outflow week in the emerging market space as investors pulled $1.56 billion this week. This marks the record 17th straight week of outflows in dedicated emerging markets funds, with cumulative outflows reaching $38 billion, or 4.9 percent of assets. On the positive side, the magnitude of outflows has reduced compared with the recent average outflow of $5.2 billion per week. At the country level, Poland, Mexico and Russia reported the largest outflows relative to assets.
  • European stocks weakened as disappointing manufacturing and services data in the eurozone added to concerns of a stagnant recovery. The PMI for manufacturing in the euro-area slipped to 53 from 54 in January. Economists had predicted a reading of 54. The reading suggests that the region’s recovery is struggling to gather pace, and puts pressure on the European Central Bank to loosen its policy further.
  • The Flash HSBC China PMI declined to a worse-than-expected 48.3 in February, a second month of contraction and the lowest reading in seven months.  While seasonal distortion by the Chinese New Year cannot be ruled out, there is no sign of a fundamental relaxation in the monetary policy stance.


Facebook's Acquisition of WhatsApp Should Enhance Valuation for Tencant's WeChat
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  • Facebook’s recent $19 billion acquisition of WhatsApp might trigger a revaluation opportunity in the marketplace for Tencent’s QQ and WeChat social messaging apps.  According to CICC, mobile QQ and WeChat may realize around $2.5 billion in revenue for 2014, or up to 25 times larger than WhatsApp’s monetization potential this year.

Online Advertising is Bright Spot for Russian Market Growth
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  • Goldman Sachs reports that online advertising continues to flourish in Russia and offers opportunities in the current context. Goldman forecasts secular themes in both information technology and advertising to remain in place, with online advertising offering a bright spot of the market growth. As the chart above shows, online advertising in Russia is expected to grow into a $3 billion market by 2015, comprising more than 30 percent of total ad budgets.
  • The Economist Intelligence Unit praised the Pacific Alliance trade agreement between Peru, Chile, Colombia and Mexico. The four Latin American nations recently decided to eliminate 92 percent of trade tariffs in order to facilitate exports and migration between them. The Economist stressed the agreement would create many business opportunities and increase competitiveness of member nations, which will allow them to enter the Asian market as a bloc.


Consumer Debt at Record High in Russia
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  • Deutsche Bank initiated coverage on Tinkoff Credit Systems with a Sell rating as it expects the fast earnings growth of recent years to be curtailed by spiraling bad loans. The concerns relate to a deteriorating market outlook and discomfort with asset quality. On a separate commentary, Goldman Sachs notes that Russian consumer debt relative to wages is at a record high, having troughed in 2010 before rising gradually to mid-2013. As a result, loan growth has slowed and will likely continue to decline as bad loan portfolios surge.
  • Russian stocks dropped as Gazprom fell on concern that Ukraine’s deadly clashes may disrupt gas supplies to Europe, which comprise about a quarter of the region’s demand and are largely dependent on free transit through Ukraine. As the political instability worsened, investors questioned the company’s ability to deliver on its contracts to Europe.
  • Anti-government protesters’ recent efforts in Thailand to discredit the Yingluck Shinawatra administration with its own supporters highlights lingering political uncertainty with no quick end to the ongoing standoff.

Leaders and Laggards

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

Weekly Performance
Index Close Weekly
Natural Gas Futures 6.21 +1.00 +19.10%
S&P/TSX Canadian Gold Index 204.82 +4.03 +2.01%
Oil Futures 102.28 +1.98 +1.97%
Russell 2000 1,164.63 +15.42 +1.34%
Korean KOSPI Index 1,957.83 +17.55 +0.90%
XAU 102.88 +0.89 +0.87%
Hang Seng Composite Index 3,140.35 +18.35 +0.59%
Nasdaq 4,263.41 +19.39 +0.46%
S&P Energy 629.81 +2.70 +0.43%
Gold Futures 1,323.50 +4.90 +0.37%
S&P Basic Materials 291.53 +0.84 +0.29%
S&P 500 1,836.25 -2.38 -0.13%
DJIA 16,103.30 -51.09 -0.32%
10-Yr Treasury Bond 2.73 -0.01 -0.40%
Monthly Performance
Index Close Monthly
Natural Gas Futures 6.21 +1.78 +40.15%
S&P/TSX Canadian Gold Index 204.82 +23.83 +13.17%
XAU 102.88 +9.31 +9.95%
Oil Futures 102.28 +7.29 +7.67%
Gold Futures 1,323.50 +81.50 +6.56%
Nasdaq 4,263.41 +37.65 +0.89%
S&P Basic Materials 291.53 +0.11 +0.04%
Korean KOSPI Index 1,957.83 -6.06 -0.31%
S&P 500 1,836.25 -7.55 -0.41%
Russell 2000 1,164.63 -11.09 -0.94%
S&P Energy 629.81 -8.03 -1.26%
DJIA 16,103.30 -311.14 -1.90%
10-Yr Treasury Bond 2.73 -0.10 -3.43%
Hang Seng Composite Index 3,140.35 -332.01 -14.83%
Quarterly Performance
Index Close Quarterly
Natural Gas Futures 6.21 +2.44 +64.81%
S&P/TSX Canadian Gold Index 204.82 +43.88 +27.26%
XAU 102.88 +16.51 +19.12%
Oil Futures 102.28 +7.44 +7.84%
Nasdaq 4,263.41 +271.76 +6.81%
Gold Futures 1,323.50 +78.10 +6.27%
S&P Basic Materials 291.53 +9.96 +3.54%
Russell 2000 1,164.63 +39.71 +3.53%
S&P 500 1,836.25 +31.49 +1.74%
DJIA 16,103.30 +38.53 +0.24%
10-Yr Treasury Bond 2.73 -0.01 -0.40%
Korean KOSPI Index 1,957.83 -48.40 -2.41%
S&P Energy 629.81 -15.90 -2.46%
Hang Seng Composite Index 3,140.35 -158.16 -4.79%

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.

With respect to the Fidelity Institutional Money Market Treasury Portfolio, which is distributed by Fidelity Distributors Corporation, an investment in a money market fund is neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although money market funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund.

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

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

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

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

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

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

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

Past performance does not guarantee future results.

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

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

Holdings as a percentage of net assets as of 12/31/13:
Actavis plc: 0.0%
Forest Laboratories, Inc.: Holmes Macro Trends Fund, 0.50%
Ameren Corp.: 0.0%
Public Services Enterprise Group, Inc.: 0.0%
Nabors Industries Ltd: 0.0%
Bank of America Corp.: All American Equity Fund, 3.00%; Holmes Macro Trends Fund, 2.09%
Citigroup, Inc.: Holmes Macro Trends Fund, 0.28%
The Coca-Cola Co.: All American Equity Fund, 0.94%
Wal-Mart Stores, Inc.: 0.0%
US Steel: Global Resources Fund, 0.56%
Mandalay Resources Corp.: Global Resources Fund, 0.97%; Gold and Precious Metals Fund, 1.79%; World Precious Minerals Fund, 1.36%
Pan African Resources plc: Gold and Precious Metals Fund, 0.95%; World Precious Minerals Fund, 1.01%
Yamana Gold, Inc.: Gold and Precious Metals Fund, 2.40%; World Precious Minerals Fund, 1.02%
OceanaGold Corp: Gold and Precious Metals Fund, 2.07%; World Precious Minerals Fund, 1.32%
AngloGold Ashanti Ltd: Gold and Precious Metals Fund, 0.04%; World Precious Minerals Fund, 0.04%
Agnico Eagle Mines Ltd: Gold and Precious Metals Fund, 1.56%; World Precious Minerals Fund, 1.57%
Osisko Mining Corp.: Gold and Precious Metals Fund, 2.76%; World Precious Minerals Fund, 1.00%
Alcoa, Inc.: Global Resources Fund, 1.12%
Respol S.A.: 0.0%
YPF S.A.: 0.0%
Facebook, Inc.: All American Equity Fund, 1.17%; Holmes Macro Trends Fund, 0.88%
Tencent Holdings Ltd: China Region Fund, 4.03%
LinkedIn Corp.: 0.0%
Twitter, Inc.: 0.0%
SINA Corp.: 0.0%
Tinkoff Credit Systems: 0.0%
Gazprom: Emerging Europe Fund, 4.22%

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

The Dow Jones Industrial Average is a price-weighted average of 30 blue chip stocks that are generally leaders in their industry.
The S&P 500 Stock Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies.
The Nasdaq Composite Index is a capitalization-weighted index of all Nasdaq National Market and SmallCap stocks.
The Russell 2000 Index® is a U.S. equity index measuring the performance of the 2,000 smallest companies in the Russell 3000®, a widely recognized small-cap index.
The Hang Seng Composite Index is a market capitalization-weighted index that comprises the top 200 companies listed on Stock Exchange of Hong Kong, based on average market cap for the 12 months.
The Taiwan Stock Exchange Index is a capitalization-weighted index of all listed common shares traded on the Taiwan Stock Exchange.
The Korea Stock Price Index is a capitalization-weighted index of all common shares and preferred shares on the Korean Stock Exchanges.
The Philadelphia Stock Exchange Gold and Silver Index (XAU) is a capitalization-weighted index that includes the leading companies involved in the mining of gold and silver.
The U.S. Trade Weighted Dollar Index provides a general indication of the international value of the U.S. dollar.
The S&P/TSX Canadian Gold Capped Sector Index is a modified capitalization-weighted index, whose equity weights are capped 25 percent and index constituents are derived from a subset stock pool of S&P/TSX Composite Index stocks.
The S&P 500 Energy Index is a capitalization-weighted index that tracks the companies in the energy sector as a subset of the S&P 500.
The S&P 500 Materials Index is a capitalization-weighted index that tracks the companies in the material sector as a subset of the S&P 500.
The S&P 500 Financials Index is a capitalization-weighted index. The index was developed with a base level of 10 for the 1941-43 base period.
The S&P 500 Industrials Index is a Materials Index is a capitalization-weighted index that tracks the companies in the industrial sector as a subset of the S&P 500.
The S&P 500 Consumer Discretionary Index is a capitalization-weighted index that tracks the companies in the consumer discretionary sector as a subset of the S&P 500.
The S&P 500 Information Technology Index is a capitalization-weighted index that tracks the companies in the information technology sector as a subset of the S&P 500.
The S&P 500 Consumer Staples Index is a Materials Index is a capitalization-weighted index that tracks the companies in the consumer staples sector as a subset of the S&P 500.
The S&P 500 Utilities Index is a capitalization-weighted index that tracks the companies in the utilities sector as a subset of the S&P 500.
The S&P 500 Healthcare Index is a capitalization-weighted index that tracks the companies in the healthcare sector as a subset of the S&P 500.
The S&P 500 Telecom Index is a Materials Index is a capitalization-weighted index that tracks the companies in the telecom sector as a subset of the S&P 500.
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 Consumer Price Index (CPI) is one of the most widely recognized price measures for tracking the price of a market basket of goods and services purchased by individuals. The weights of components are based on consumer spending patterns.
The Conference Board index of leading economic indicators is an index published monthly by the Conference Board used to predict the direction of the economy’s movements in the months to come. The index is made up of 10 economic components, whose changes tend to precede changes in the overall economy.
The Purchasing Manager’s Index 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 Philadelphia Federal Index is a regional federal-reserve-bank index measuring changes in business growth. The index is constructed from a survey of participants who voluntarily answer questions regarding the direction of change in their overall business activities. The survey is a measure of regional manufacturing growth. When the index is above 0 it indicates factory-sector growth, and when below 0 indicates contraction. Also known as the “Business Outlook Survey.”

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