• Global equity markets continued to decline during Q3 2022, the economy moved from quantitative easing and low inflation to higher inflation and interest rates.  The COVID pandemic and the war in Ukraine have served as inflection points in this transition and contributed to inflationary pressures. U.S. markets seem particularly concerned this may result in lower corporate earnings and possible Fed overreaction.

• The Tocqueville Fund finished down 5.34% on a net basis, while the S&P 500, the Russell 1000 Value and the Russell 3000 Value decreased 5.30%, 5.62% and 5.56%, respectively. The sectors with the largest contribution to performance were financials, consumer discretionary and energy while the detractors were information technology, health care, and consumer staples.  The best performers were Charles Schwab, Vulcan Materials, Automatic Data Processing, Deere, and Walmart while the worst were Pfizer, Verizon, Colgate-Palmolive, NVIDIA, and Intel.
 

• The Fund purchased Intercontinental Exchange, a global exchange for equities and derivatives. In our judgment, the market underestimates the benefits of volatility on the exchange business and misunderstands the impact of higher rates on its mortgage related business, which depends much on the number of loans outstanding than originations.
 

• The Fund also purchased Adobe, the leading provider of content creation and management software whose shares had been one of the worst performers in the tech sector of late. The market perceived the announced acquisition of Figma as expensive and perhaps a sign of weakness. We believe the market overreacted, and Adobe will continue to earn high margins on recurring revenue.
 

• The Fund exited positions in Activision, DuPont, Expedia, Tejon Ranch and Woodside Energy; trimmed Alphabet, Apple, Delta, and Pfizer; and added to Cameco, Newmont, Sibanye Stillwater, and SM Energy.
 

• Equities may continue to struggle as rates rise, however, we believe stocks with inflation fighting characteristics can still do well, including energy infrastructure, hard assets, and technology where growth and profitability were overlooked in the rush to respond to rising rates.