IBKR Quant Blog


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Macro

Interactive Brokers - Emerging Markets: The Week Ahead (Mar 25 - 29)


Mexico: What’s Brewing South of the Border?

Mexico is set to provide further color about the nation’s economic health in the week ahead, including updates on its labor market and trade balance, while Banco de México readies its next interest rate decision.

The Mexican economy has been recently flagged by major credit ratings agencies, including S&P Global Ratings and Moody’s Investors Service, as showing signs of potential credit deterioration, while the country’s leadership has generally railed against the assessments.

Mexican President Andrés Manuel López Obrador – widely referred to as ‘AMLO’ – had said earlier in March that certain nationally recognized statistical rating organizations (NRSROs) have been “punishing the country” for what the leader attributed to failures of “the neoliberal policy that was applied in the last 36 years.”

AMLO continued that his administration would “have to pay for the broken dishes” of past economic policy, which he characterized as “inefficient” and rife with looting and corruption.

The President further underscored his commitment to rescuing Mexican state-owned oil giant Petróleos Mexicanos (Pemex) and the Federal Electricity Commission (CFE) from the alleged corruption under the former neoliberal regimes, during which, he added, the ratings agencies had “remained silent.”

Among its strategies, AMLO’s administration aims to play a larger role in Pemex and CFE, as well as promote development finance by merging certain government-owned development banks to create new institutions.

However, S&P Global Ratings at the start of March revised its outlook on Mexico’s long-term ratings to negative from stable, while affirming its 'BBB+/A-2' foreign currency and 'A-/A-2' local currency sovereign credit ratings.

S&P noted that while it expects the López Obrador administration to “pragmatically implement economic policies that balance social priorities with the need for macroeconomic stability in Mexico,” a recent shift in government policy to reduce private-sector involvement in the energy sector, along with other developments, have “diminished investor confidence.” 

The agency added the policy actions could “contribute to higher contingent liabilities for Mexico and lower its GDP growth prospects” to 1.8% in 2019, down from 2% last year.

S&P placed at least a one-in-three possibility of a downgrade over the coming year.

Against this backdrop, Mexico's central bank, which carries a single mandate to maintain stable, low inflation rates, is set to announce its interest rate decision.

At its prior meeting in early February, Banco de México’s Governing Board elected to keep the target for the overnight interbank interest rate at 8.25%. 

 

During the fourth quarter of 2018, the bank said the nation’s economic activity slowed “significantly” compared to the previous quarter, and “this pattern could continue” in large part due to a deceleration of global economic growth, as well as “some weakness in domestic demand.” 

The central bank also highlighted that Inflation had fallen from 4.72% in November 2018 to 4.37% in January 2019, mainly due to a reduction in non-core inflation. It further added that “the possibility that the peso exchange rate comes under pressure stemming from external or domestic factors stands out.”

Marc Chandler, chief market strategist at Bannockburn Global Forex, observed that the Mexican peso fell nearly 1.25% ahead of the weekend, amid a bout of general risk aversion. He also pointed out that President AMLO indicated his government will not act to address bank fees and that banks ought to regulate themselves.  

In intraday trading Monday, Chandler added the peso is recouping some of its pre-weekend losses, but the dollar may find support near MXN19.00.

Meanwhile, market participants will have no shortage of economic data in the week ahead to further gauge the direction of Mexico’s economic health, starting in earnest with:  

Tuesday, March 26

  • Retail Sales (Jan)

Wednesday, March 27

  • Trade Balance (Feb)

  • Unemployment Rate (Feb)

Banco de México outlined some obstacles to trade in its prior meeting, including the ratification of the trade agreements reached between Mexico, the US and Canada, increased domestic uncertainty and less confidence in the outlook for the Mexican economy, as well as certain delays in the execution of public spending related to the beginning of its new administration.

One central bank member cited that “given the lower global dynamism, the country will face a certain deceleration in foreign trade, which has been one of Mexico’s main growth drivers in recent years.”

As for the labor market, some members noted the rise in the unemployment rate at the end of 2018 may have been affected by factors related to the present juncture, such as the cancelation of the New Mexico City International Airport’s construction.

Overall, however, the labor market remains tight, but slack conditions in the economy are expected to widen in the coming quarters. 

In the latter part of the week, market participants will be eyeing:

Thursday, March 28

  • Banco de México’s Interest Rate Decision

Investors will generally be watching the data for further direction into Mexico’s economy and financial well-being. 

Sentiment about the country’s ability to honor its debt obligations has been positive, as suggested by a more than 27.5bp tightening in its five-year credit default swap (CDS) spreads over the past three months. Mexico’s sovereign CDS stood at around 130bps intraday Monday.

In the meantime, select the Event Calendar option in the IBKR Trader Workstation for a full list of U.S. and global corporate events and earnings, dividend schedules, economic data, IPOs and more.

The author does not hold any positions in the financial instruments referenced in the materials provided.

There is a substantial risk of loss in foreign exchange trading. The settlement date of foreign exchange trades can vary due to time zone differences and bank holidays. When trading across foreign exchange markets, this may necessitate borrowing funds to settle foreign exchange trades. The interest rate on borrowed funds must be considered when computing the cost of trades across multiple markets.

The analysis in this material is provided for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IBKR to buy, sell or hold such investments. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.


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Macro

Morningstar - Boards Becoming More Gender-Diverse, but Not Yet Balanced


Jeremy Glaser and Madison Sargis discuss progress being made on gender diversity on corporate boards.

 

Originally Posted on March 8, 2019

Morningstar provides a constant source for investment ideas with our comprehensive analyst reports on equities, ETFs, and credit ratings from more than 100 analysts. U.S. Interactive Brokers clients can sign up for a free trial of these reports in Account Management.

Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. We believe the information provided here is reliable, but do not warrant its accuracy or completeness. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The views and strategies described may not be suitable for all investors. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, accounting, legal, or tax advice. References to future returns are not promises or even estimates of actual returns a client portfolio may achieve. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation.

Information posted on IBKR Traders’ Insight that is provided by third-parties and not by Interactive Brokers does NOT constitute a recommendation by Interactive Brokers that you should contract for the services of that third party. Third-party participants who contribute to IBKR Traders’ Insight are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from Morningstar and is being posted with Morningstar's permission. The information provided in this material is from Morningstar and IBKR is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.


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Macro

Franklin Templeton - Do Teachers' Strikes Have Us Picketing California School District Bonds? - By Jennifer Johnston


Two large teacher’s strikes in California have made headlines this year, one in Los Angeles and another in Oakland. Neither was prolonged, but both highlight funding concerns in these and other communities. Jennifer Johnston of our Municipal Bond department explains the role investors play in funding public education through municipal bonds.

Public education is viewed as one of the most important services that state and local governments provide. In fact, many state constitutions codify the importance of providing a strong government-funded public education system, require minimum funding levels and establish sophisticated district or bond oversight programs.

Despite widely held views of the importance of public education, there are still challenges in funding and administering education throughout the country. The state of California is seeing record surpluses and financial reserves, and it has been providing significantly more aid to school districts over the past few years after changing its school funding formula. If this is the case, why are schools in the state struggling?

Many districts are confronted with a range of challenges that often reduce dollars available for educational program expansion and funding salary increases and ultimately impact financial reserves and credit quality, including:

  • rapidly rising costs, largely from a significant increase in pension funding requirements for the two state-run pension funds;
  • demographic shifts resulting from fewer births, which lower enrollment and state operating aid1;
  • growth in charter schools, which also reduces district enrollment and state operating aid2
  • high costs of living and housing affordability issues, which are driving families out of certain districts; and
  • district employee salaries that don’t keep up with costs of living.

Our job is to evaluate this set of challenges and ultimately gauge credit quality. We evaluate the district’s willingness and ability to use their available tools to solve these issues.

Historically, teacher strikes have been infrequent and usually have resulted from the inability of management and employee unions (often teachers unions) to agree on contract terms, frequently around salary increases. While this hasn’t changed, we are seeing a new trend with unions striking over more policy-related issues like class sizes, the numbers of counselors and nurses, school closures, pension funding issues and even the increase in charter schools.

In California specifically, the recent strikes have occurred in districts with declining enrollment and high costs of living adding to these challenges. The timing of these strikes didn’t surprise us, because districts and the state are in budget season.

As teachers ultimately need more funding for their initiatives, this presents the most opportune point in the year to influence both the district and the state.

The Impact of Striking Teachers

While we don’t take a side in these battles, we analyze the outcomes to understand the impact on the district’s credit, of which environmental, social and governance (ESG) is a component, as follows:

Financial Impact: A strike can impact a district in two ways. First, resolution usually includes new contract terms with higher salary and benefit costs from either wage increases and/or increases in staffing. A second impact is on state aid. State aid is often tied to attendance. So, when parents keep kids out of school during a strike—perhaps in solidarity with the teachers or over concerns with education quality when teachers are out of the classroom—it results in less state funding. So, the length of a strike can be important financially. We focus our analysis on the district’s ability to afford the increased net costs in the current and future fiscal years. Given that school funding is largely from the state, we view this in the context of the state’s fiscal health and commitment to providing additional funding when required.

Community/Enrollment Impact: Declining enrollment can be a financial challenge for districts. Whether general demographics or charter schools are the cause, it can result in funding decreases without commensurate spending decreases. After a strike, we keep a closer eye on enrollment to see if the strike drives more students into charter, religious or private schools, which can further exacerbate general demographic trends.

Management Analysis: Assessing the school management’s relationship with its unions is an important component. We carefully watch how management and unions interact and how management deals with the challenges. We want to feel comfortable that management can and will address issues as they occur and maintain a working relationship with its employees.

How Strikes Impact Our Overall Analysis

We then view a particular strike within the context of the larger credit profile of the district:

  • We look at the financial position and whether the costs are affordable.
  • We determine how much financial flexibility the district has to address its challenges.
  • We consider the security structure of the district’s bonds to assess the impact of these costs on the ability to service debt.
  • We analyze the tax base to understand whether its fixed costs are affordable.
  • We look at enrollment trends in context of general demographics as well as academic performance, charter school penetration and costs of living.
  • We consider the state’s prioritization of funding school aid, its current budget outlook and any policy directives under consideration.
  • We dive deep into the pension funds’ condition, annual funding needs and pressure points in the future.
  • In the case of California in particular, we incorporate the strength that comes from the state’s oversight program, which up until now, has helped keep all of its distressed school districts out of insolvency, default and bankruptcy.

Our expertise in this sector has taught us that a strike alone is not a reason for investors to sell the corresponding municipal bond investments. First, strikes usually don’t come as a surprise as they are often linked to challenges with the credit that have developed over time. Second, we often continue to hold muni bonds in school districts that have had or could have a strike, because we don’t expect the strike to impair the district’s ability to service debt.

We might also determine the property tax base can support the debt and that the state’s oversight program will provide technical guidance or financial support to help a district avoid insolvency.

While we have highlighted California public schools specifically, these challenges aren’t limited to the Golden State. We have seen strikes at districts across the country and in some cases, state-wide strikes.

In any case, our research approach stays the same. We examine credit at the district level to understand its individual challenges, financial tools, management abilities, security structure and long-term liabilities. We look at overall funding pressures, demographic trends and state policy and funding approaches to understand the potential impacts.

As a result of these exhaustive efforts, our municipal bond portfolios are able to invest in school bonds that we think should be able to weather these challenges, and, just as importantly, hopefully avoid others that may be more exposed to downside risks.

 

1. State operating aid is largely based on average daily attendance, so when enrollment declines so does state aid, assuming per pupil spending doesn’t change.

2. Ibid.

To get insights from Franklin Templeton delivered to your inbox, subscribe to the Beyond Bulls & Bears blog.

For timely investing tidbits, follow us on Twitter @FTI_US and on LinkedIn.

--

Originally Posted on March 14, 2019

The comments, opinions and analyses presented herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. Because market and economic conditions are subject to rapid change, comments, opinions and analyses are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment or strategy.

This information is intended for US residents only.

What Are the Risks?

All investments involve risks, including possible loss of principal. Because municipal bonds are sensitive to interest-rate movements, a fund’s yield and share price will fluctuate with market conditions. Bond prices generally move in the opposite direction of interest rates. Thus, as prices of bonds in a fund adjust to a rise in interest rates, the fund’s share price may decline. To the extent a fund focuses its investments in a single state or territory, it is subject to greater risk of adverse economic and regulatory changes in that state or territory than a geographically diversified fund. Changes in the credit rating of a bond, or in the credit rating or financial strength of a bond’s issuer, insurer or guarantor, may affect the bond’s value. A fund may invest a significant part of its assets in municipal securities that finance similar types of projects, such as utilities, hospitals, higher education and transportation. A change that affects one project would likely affect all similar projects, thereby increasing market risk. Investments in lower-rated bonds include higher risk of default and loss of principal.

For investors subject to the alternative minimum tax, a small portion of municipal bond fund dividends may be taxable. Distributions of capital gains are generally taxable

Federal and state laws and regulations are complex and subject to change, which can materially impact your results. Always consult your own independent financial professional, attorney or tax advisor for advice regarding your specific goals and individual situation.

Past performance does not guarantee future results.

Information posted on IBKR Traders’ Insight that is provided by third-parties and not by Interactive Brokers does NOT constitute a recommendation by Interactive Brokers that you should contract for the services of that third party. Third-party participants who contribute to IBKR Traders’ Insight are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from Franklin Templeton and is being posted with Franklin Templeton’s permission. The views expressed in this material are solely those of the author and/or Franklin Templeton and IBKR is not endorsing or recommending any investment or trading discussed in the material. This material is for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IBKR to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.


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acciones

The Fly - Nvidia seen taking 'page out Intel's strategy' with GPU ecosystem expansion - By Jessica de Sa-Mota


Last week, Nvidia announced a deal to buy Mellanox for $125 per share, or a total enterprise value of about $6.9B

Commenting on the presentation made by Nvidia (NVDA) CEO Jensen Huang at this year's GPU Technology Conference, where he announced the expansion of its GPU development ecosystem, Stifel analyst Kevin Cassidy said he believes the company is taking "a page out of Intel's strategy" and that he came away "impressed" with the expanding range of GPUs with price, performance and power trade-offs to address markets from supercomputers to toy robots. Voicing a similar opinion, his peer at Wells Fargo raised his price target on Nvidia shares to $190, and added that he views Nvidia's acquisition of Mellanox (MLNX) as positive.

GPU ECOSYSTEM EXPANSION: Nvidia has announced several developments that it said "reinforce NVIDIA GeForce GPUs as the core platform that allows game developers to add real-time ray tracing effects to games." The announcements, which build on the central role Microsoft (MSFT) DirectX Ray Tracing plays in the PC gaming ecosystem, include integration of real-time ray tracing into Unreal Engine and Unity; adding ray tracing support to GeForce GTX GPUs; the introduction of Nvidia GameWorks RTX, a comprehensive set of tools and rendering techniques that help game developers add ray tracing to games; and new games and experiences that showcase real-time ray tracing such as Dragonhound, Quake II RTX and others. "When programmable shaders were introduced more than 15 years ago, they changed gaming forever. Today, real-time ray tracing is set to do the same thing - it represents the next landmark shift in game development," said Matt Wuebbling, head of GeForce marketing at Nvidia. "The breadth of industry adoption is remarkable -standard APIs, integration in major game engines, multiple AAA titles and support enabled in millions of hardware products. It all points to an exciting future for gamers." Investors in Epic Games, which makes the Unreal Engine, include Tencent (TCEHY), KKR (KKR), and Disney (DIS). The company also announced a collaboration with Amazon (AMZN) Web Services Internet of Things on Nvidia Jetson to enable customers to deploy Artificial Intelligence and deep learning to millions of connected devices. This joint solution enables models to be easily created, trained and optimized on AWS, then deployed to Jetson-powered edge devices using AWS IoT Greengrass. The Nvidia Jetson platform offers AI at the edge with high-performance and power-efficient computing. Applications include autonomous machines and smart cameras for industries such as retail, manufacturing, agriculture and more.

'A PAGE OUT OF INTEL'S STRATEGY': Noting that Nvidia's CEO, Jensen Huang, kicked off this year's GPU Technology Conference with announcements for expanding the GPU development ecosystem, Stifel's Cassidy told investors that he believes Nvidia is taking a page out of Intel's (INTC) strategy that made the x86 CPU the broadest used CPU architecture. Nvidia's common GPU architecture across multiple end markets gives leverage for third party software and tool developers, he contended, adding that he came away from the presentation "impressed" with the expanding range of GPUs with price/performance/power trade-offs to address markets from supercomputers to toy robots. Additionally, the analyst pointed out that he expects Nvidia and Mellanox to continue developing products that off-load workloads from the CPU to GPUs, networks and network processors. Cassidy reiterated a Hold rating and $150 price target on Nvidia’s shares. Meanwhile, Wells Fargo analyst Aaron Rakers raised his price target for Nvidia to $190 from $170 following the keynote presentation made by Jensen Huang at GTC. Given investor focus on Nvidia's $6.9B acquisition of Mellanox, the analyst thinks the company's datacenter-focused announcements are "the most notable focus." Rakers reiterated an Outperform rating on Nvidia's shares.

PRICE ACTION: In morning trading, shares of Nvidia have gained about 4% to $175.31.

--

Originally Posted on March 19, 2019

The Fly is a leading digital publisher of real-time financial news. Our exclusive live streaming subscription service breaks the material information moving stocks. Our financial market experts understand that news impacting stock prices can originate from anywhere, at any time. The Fly team scours all sources of company news, from mainstream to cutting-edge, then filters out the noise to deliver short-form stories consisting of only market moving content. The Fly is your filter to the often complex world of stock news.

 

Take a free 14-day trial and get all our breaking stock news and exclusive insights

 

Information posted on IBKR Traders’ Insight that is provided by third-parties and not by Interactive Brokers does NOT constitute a recommendation by Interactive Brokers that you should contract for the services of that third party. Third-party participants who contribute to IBKR Traders’ Insight are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from The Fly and is being posted with The Fly’s permission. The views expressed in this material are solely those of the author and/or The Fly and IBKR is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.


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Macro

US Global Investors - Gold Miners Are Finally Making Some Interesting Capital Investments


Last week I was pleased to attend the Prospectors & Developers Association of Canada (PDAC) conference in Toronto. PDAC is one of the largest mining conferences in the world. More than 25,000 people turned out this year, many of them selling equipment services, exhibiting securities and investments, making presentations and much more.  

As was the case at the BMO Global Metals & Mining Conference a week earlier, one of the dominant thoughts on everyone’s minds was Barrick Gold’s $17.8 billion hostile takeover of its longtime rival Newmont Mining.

This Monday we learned that, after both parties spoke with top shareholders, the bid fell through. But rather than continuing to duke it out in the capital markets, the two mining giants will instead be entering into a joint venture (JV) in Nevada. The JV will combine significant deposits and mines, processing facilities and infrastructure to unlock significant synergies.

As a standalone company, the Nevada complex will be the world’s single-largest gold producing operations, according to equity research firm GMP Securities.

Nevada, by the way, is the top gold producing state in the U.S., responsible for nearly three quarters of annual output. If it were its own country, Nevada would be the fourth largest gold producer in the world, thanks to its prolific Carlin Trend deposits.

It’s within these monumental goldfields that the Barrick-Newmont JV will be operating, with control over as many as three Tier 1 mines, or those that typically produce 500,000 ounces of gold or more annually. That is significant.

The JV ownership will be 61.5 percent Barrick and 38.5 percent Newmont, with Barrick acting as the main operator. The board will consist of three Barrick representatives and two Newmont representatives.

The “Walmart” of the Mining World

What’s really exciting, I think, is that the synergies are projected to come partly from optimized mining and processing and partly from supply chain and indirect costs. The company is expected to become the “Walmart” of the mining world, with the muscle to negotiate better prices on tractors, haulers and other equipment. The synergies are estimated to help save as much as $500 million in the first five years alone, according to GMP, but I believe it could be much more than that.

It’s hard not to see this as positive for the capital markets. The Barrick-Newmont JV is about trying to drive down costs in order to sustain the overall production profiles of these two mega gold miners.

Gold Accounted for Half of World Exploration Budgets

The Barrick-Newmont deal is just the latest in what I believe is an ongoing trend of industry consolidation as well as rising exploration budgets. Barrick purchased London-based Randgold Resources back in September, while Newmont is working on a merger with Goldcorp. Australia’s Newcrest Mining just bought a majority interest in Imperial Metals’ Red Chris copper and gold mine, located in British Columbia, Canada, and is now in the process of inking a $65 million JV deal with Greatland Gold.

I see these deals as a sign that miners anticipate a bull run in gold prices. Better to spend the money now when valuations are attractive rather than later when companies could be much more expensive. During the last bull market in gold prices, many mining executives ended up losing their jobs because they entered deals when valuations were overextended.

Exploration budgets are also finally starting to climb, another sign of increased confidence in future prices. According to S&P Global Market Intelligence’s just-released “World Exploration Trends 2018,” budgets increased for the second straight year in 2018 to $10.1 billion. Roughly half of that, or $4.85 billion, was spent on gold exploration.


 

Ready to Invest?

What all of this means is that now might be the time to consider investing in gold miners. In the years since the price of gold peaked in 2011, producers and explorers slashed budgets to keep their powder dry. We’re finally starting to see them deploy some of that capital. It’s not hard to make the case that they seem to be acting on the knowledge, or at least a strong hunch, that metal prices are set to head higher.

If you think additional mining mergers and acquisitions (M&As) are in the works, one of the best investment vehicles, I believe, is our World Precious Minerals Fund (UNWPX). The reason I say that is because UNWPX, unlike a lot of other precious metal mining funds, has significant exposure to smaller junior and intermediate companies, which appear attractive right now as takeover targets. High-quality, well managed companies such as Wesdome Gold Mines, Cardinal Resources and TriStar Gold.

The portfolio management team has over 60 combined years of experience working in the capital markets, and includes precious metal and mineral expert Ralph Aldis.

 

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 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 S&P 500 Stock Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies.

Fund portfolios are actively managed, and holdings may change daily. Holdings are reported as of the most recent quarter-end. Holdings in the World Precious Minerals Fund as a percentage of net assets as of 12/31/2018: Barrick Gold Corp. 0.00%, Randgold Resources Ltd. 0.00%, Newmont Mining Corp. 0.00%, Newcrest Mining Ltd. 0.00%, Goldcorp Inc. 0.00%, Walmart Inc. 0.00%, S&P Global Inc. 0.00%, Imperial Metals Corp. 0.00%, Greatland Gold plc 0.00%, Wesdome Gold Mines Ltd. 6.87%, Cardinal Resources Ltd. 5.41%, TriStar Gold Inc. 4.99%.

--

Originally Posted on March 14, 2019

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. Foreside Fund Services, LLC, Distributor. U.S. Global Investors is the investment adviser.

About U.S. Global Investors, Inc.

U.S. Global Investors, Inc. is an investment adviser registered with the Securities and Exchange Commission ("SEC"). This does not mean that we are sponsored, recommended, or approved by the SEC, or that our abilities or qualifications in any respect have been passed upon by the SEC or any officer of the SEC.

This commentary should not be considered a solicitation or offering of any investment product.

Certain materials in this commentary may contain dated information. The information provided was current at the time of publication.

Some links above may be directed to third-party websites. U.S. Global Investors does not endorse all information supplied by these websites and is not responsible for their content.

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

Information posted on IBKR Traders’ Insight that is provided by third-parties and not by Interactive Brokers does NOT constitute a recommendation by Interactive Brokers that you should contract for the services of that third party. Third-party participants who contribute to IBKR Traders’ Insight are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from U.S. Global Investors and is being posted with U.S. Global Investors’ permission. The views expressed in this material are solely those of the author and/or U.S. Global Investors and IBKR is not endorsing or recommending any investment or trading discussed in the material. This material is for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IBKR to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.


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Avisos legales

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