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Investing involves risk, including the potential loss of principal.
Before investing, carefully consider the fund’s investment objectives, risks, charges, and expenses of the investment company. This and other important information can be found in the fund’s prospectus. To obtain a copy, visit TIMOTHYPLAN.COM or call 800.846.7526. Read each prospectus carefully before investing.
Because the Timothy Plan Funds do not invest in excluded securities, the Funds may be riskier than other funds that invest in a broader array of securities. There are risks when a fund limits its investments to particular sized companies, and all companies are subject to market risk. The Fund recently experienced significant negative short-term performance due to market volatility associated with the Covid-19 pandemic.
MUTUAL FUND INVESTOR
To read more about our mutual funds, please click this link to access fund information, including the prospectus, fact sheets, performance, and holdings for each fund.A prospectus is available from the Fund or your financial professional that contains more complete, important information. Please read it carefully before investing. Mutual Funds distributed by Timothy Partners, Ltd. Member FINRA.
HEADQUARTERS: 1055 Maitland Center Commons, Maitland, FL
(800) 846-7526 | Send an email | View our mapMUTUAL FUND SHAREHOLDER SERVICES: c/o Ultimus Fund Solutions, Post Office Box 541150, Omaha, NE 68154-1150
(800) 662-0201 | Account AccessETF INVESTOR
To read more about our ETFs, please click this link to access fund information, including fact sheets, performance and holdings for each fund. A prospectus is available from the Fund or your financial professional that contains more complete, important information. Please read it carefully before investing. ETFs distributed by Foreside Fund Services, LLC, Member FINRA. Timothy Partners, Ltd. is not affiliated with Foreside Fund Services, LLC.
ETF SHAREHOLDER SERVICES: Contact your financial advisor for information regarding your account.
Market Backdrop
Israel’s economy continues to grow at a solid pace. Bank of Israel (BoI) research department forecasts GDP growth of 3.7% in 2018 and 3.6% in 2019. The labor market remains tight with the unemployment rate hovering around 4%, slightly higher than the record low of 3.7% recorded in January of this year. Annual inflation has now bounced into the lower end of the target range of the BoI of 1-3% but does not appear entrenched there yet. Most analysts do not expect the BoI to raise rates until the inflation data remains entrenched in this range for a period. Economists do expect for the BoI to begin raising interest rates from the current 0.10% beginning sometime in 2019. The Monetary Policy Committee (MPC) of the BoI states that the main risk today of inflation not remaining entrenched in the target range is the possibility of a sharp appreciation in the shekel. With major exports of the Leviathan natural gas field beginning as early as the end of 2019, the government is doing all it can to make sure the currency does not appreciate quickly from the additional foreign currency earnings.
Home price declines appear to have halted in the near term while volumes have rebounded after a prolonged decline since the middle of 2016. New mortgage volumes have risen recently, and any expectations of rising rates may put some additional life into the mortgage markets as home buyers anticipate higher rates going forward. Consumer confidence remains above average increasing recently for both current conditions and expectations. The most recent manufacturing PMI did decline some but remains above expansionary levels.
Performance and Attribution
The Timothy Plan Israel Common Values Fund performed well on an absolute basis and closely matched the TA-125 benchmark index for the quarter. Sector allocation was positive while stock selection suffered a bit. From an allocation standpoint, the bright spot was an underweight to the Health Care sector which underperformed. Individual stock selection was hampered by negative selection in the Energy, Materials, and Consumer Discretionary sectors. Strong performers for the quarter included the insurance industry with holdings Clal Insurance and Migdal Insurance performing well. In addition, cyber security firms performed well with CyberArk Software and Checkpoint Software leading the way. Negative selection was in not owning Sodastream which rose sharply after being acquired by Pepsi and being underweight the index weight of Israel Chemicals which performed well.
Outlook
The strong domestic economic environment remains supportive of good earnings growth for the non-financials corporate sector. While global trade tensions and increased geopolitical tensions in the region have increased volatility, strong domestic demand continues to support corporate earnings. Recent deceleration in economic activity in Europe may dent near term export demand but we remain constructive Israeli equities over the next twelve months on anticipated strong earnings growth. Renewed mortgage activity and the anticipation of rising rates may also give new life to the Financials sector.