Aug 17

Portfolio Manager Commentary — ITC Holdings Corp. and Royal Gold, Inc.

As we have in the past, we will start this short commentary with a brief overview of our investment process: We put shareholder cash to work when we can find great operating companies trading at a substantial discount to our conservative estimate of fair value; we sell positions in the Fund when those companies approach or exceed our estimate of fair value. 

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A few positions in the Fund have recently approached or exceeded our conservative estimate of their fair value. We recently sold our remaining position in ITC Holdings. We originally purchased shares in October of 2014 and exited the position in August 2016. The Fund’s average purchase price was $35.45 and our average sales price was $43.09, which equates to a stock price increase of 21.5% on the Fund’s investment (not including dividends). We also slightly reduced our position in Royal Gold although we believe that the company is executing extremely well. Royal Gold is still trading well below our estimate of its fair value, albeit the discount is much smaller than what existed at the beginning of year. For that reason, we decided to resize the position to what we feel is a more appropriate weighting within the Fund.

The opinions expressed are those of the Fund’s portfolio manager and are not a recommendation for the purchase or sale of any security. 

As of the most recent quarter-end, June 30, 2016, ITC Holdings Corp. represented 1.64% of Fund net assets and Royal Gold, Inc. represented 7.55% of Fund net assets.

The Fund’s investment objectives, risks, charges and expenses must be considered carefully before investing. The Prospectus contains this and other important information about the Fund, and it may be obtained by calling 1-877-743-7820, or visiting Read it carefully before investing. 

Performance data quoted represents past performance; past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 1-877-743-7820. 

The risks associated with the Fund, detailed in the Prospectus, include the risks of investing in small and medium sized companies and foreign securities which may result in additional risks such as the possibility of greater price volatility and reduced liquidity, different financial and accounting standards, fluctuations in currency exchange rates, and political, diplomatic and economic conditions as well as regulatory requirements in foreign countries. There also may be risks associated with the Fund’s investments in exchange traded funds, real estate investment trusts (“REITs”), significant investment in a specific sector, and nondiversification. Technology companies held in the Fund are subject to rapid industry changes and the risk of obsolescence. The Fund is non-diversified, meaning it may concentrate its assets in fewer individual holdings than a diversified fund. Therefore, the Fund is more exposed to individual stock volatility than a diversified fund. Distributed by Rafferty Capital Markets, LLC-Garden City, NY 11530.