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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.
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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.
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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.
Second Quarter 2020
Market Commentary:
Looking back, the past quarter was again a record-setter as markets rallied and the S&P 500 posted the strongest quarterly gain since 1998. This also marked the first time for a back-to-back decline and rally of such magnitude since the 1930s. Investors optimism rose as COVID-19 trends moderated from their worst levels, raising the prospects for a snapback in the economic landscape. Massive amounts of fiscal and monetary stimulus began to be disbursed, helping drive a similar snapback to the markets. Despite dire unemployment numbers, greater than 11 percent at present, consumer spending rebounded sharply as people spent their government stimulus checks. Individuals reemerged as reopening began across various states. However, as businesses started this process across the country, key states like Texas and Florida saw infection trends worsen. This raised the possibility of a second wave and remains front of mind for investors heading into the upcoming earnings season. Estimates for earnings growth have begun to moderate from their declines and improve on the margin, after falling sharply last quarter. The trajectory for future corporate profits will serve as a guide for markets going forward.
Looking forward, macroeconomic data will continue to be choppy, as shorter-term data begins to show some marginal improvements from depressed readings amidst continued lower levels of economic activity. Forecasts remain quite negative for economic growth with GDP is still expected to be down substantially for the 2Q20 period; however, expectations for these disruptions to be transitory remain. Further resumption of normal activities by businesses and consumers will be necessary for such a recovery to take place, and the worsening trends in key states may delay such efforts. The path of a recovery remains anything but clear. That said, companies with high-quality franchises and strong balance sheets are likely to remain well-positioned to weather the storm and should continue to be in demand by investors. The upcoming earnings season will serve as an important data point in understanding the impact each company has observed so far from the virus-related disruption. Management teams may have more clarity and willingness to provide financial guidance, which will help provide some framework for investors to determine potential winners and losers in the coming quarters as improvement in employment and business activity unfolds.
Timothy Plan Large/Mid Cap Value Fund Q2 2020 Commentary
Index Drivers:
Within the S&P 500 Index, all sectors posted positive returns. Consumer Discretionary and Information Technology posted the largest gains during the second quarter while Utilities and Consumer Staples rose the least.
Performance Drivers:
Positive stock selection and an underweight in Health Care along with favorable selection in Consumer Staples helped relative performance. NVIDIA beat expectations as their Ampere product cycle began and their recent acquisition delivered above plan. Tractor Supply pre-announced strong results, as their e-commerce efforts and curbside pickup were well-received by their customers. Monolithic Power Systems rose as demand remained strong for their products across a broad set of end-markets, particularly video game consoles expected to launch later this year. Cadence Design Systems continued to see resiliency in demand for their semiconductor design software, driving higher earnings growth. Equifax moved higher as their investor update pointed to material revenue improvements through the quarter on strong demand for their mortgage products and in Workforce Solutions, which includes processing unemployment claims.
Unfavorable selection and overweights in Utilities and Real Estate weighed on relative performance given the strong rally in the market. While J.M. Smucker saw strong growth in their retail foods division drive earnings and cashflow, underwhelming guidance for the upcoming year given the impacts from COVID-19 pushed shares lower. Public Storage declined as the pandemic disrupted typical pricing initiatives and move-in/move-out activity for their storage units while expenses have remained elevated. First Hawaiian fell over concerns for a likely reserve build as regional banks prepare for pandemic-related credit issues and reduced tourism for the island. Assurant declined modestly as warranty purchases on cell phones and automobiles saw some pause in demand due to shelter-in-place orders though new phone launches should help drive growth later this year. CMS Energy faced some headwinds as investors rotated into more aggressive areas of the market despite the utility’s above-average growth, attractive valuation, and solid execution.
Past performance is not indicative of future results. Portfolio returns reflect the reinvestment of dividend and interest income. All information provided is for informational purposes only and is not intended to be, and should not be interpreted as, an offer, solicitation, or recommendation to buy or sell or otherwise invest in any of the securities/sectors/countries that may be mentioned. A description of the methodology used to calculate the attribution analysis or a complete list of each holding’s contribution to overall performance during the measurement period may be obtained by contacting [email protected]. Benchmark Data Source: © 2019 FactSet Research Systems Inc. All Rights Reserved. Russell Investment Group is the owner of the trademarks, service marks, and copyrights related to its indexes, which have been licensed for use by Westwood.