Shareholder Letter

Dear Fellow Shareholders,

The MP63 Fund (DRIPX) continues to follow the investing guidelines that were established at its inception in March 1999: At least 80% of it’s assets are invested in what we consider to be high-quality companies that pay dividends and offer the option to invest directly through the company-sponsored Dividend Reinvestment Plan (DRIP). As portfolio managers, we make an effort to minimize fund expenses and we are mindful of the effect of capital gains for those who are invested in a taxable account. The Fund’s expense ratio during the 2024 fiscal year, which spans from 3/1/2023 to 2/29/24 was 0.72%, which compares favorably with 0.80% for Large-Cap No-Load funds. This relatively low expense ratio is more remarkable given the Fund’s relatively small asset base compared with the billion-dollar funds in this category.

The calendar year 2023 reflected a recovery for virtually every type of equity fund, as evidenced by the S&P 500® Index, up 24.23% (after a decline of 19.44% in 2022, its worst year since 2008). During the same period, DRIPX was up 5.92% while the Russell Value 1000 Index was up 11.41%. Contributing to the relatively poor performance is our Fund’s large commitment to the Consumer Staples, Utilities, and Healthcare sectors which were among the worst performing sectors–losing value while the other sectors made substantial gains. But market favorites are not fixed and momentum favorites change. DRIPX assets totaled $90.2 million at the end of 2023 and have grown so far this year to $94.9 million.

As usual, DRIPX benefitted from the disciplined investing approach followed by many of your fellow shareholders who not only maintained their positions during volatile market conditions but also continued to invest regardless of the short-term direction of the market. And, while our commitment to our long-term strategy caused the Fund to underperform recently–bringing our Morningstar ranking down from a Gold Medal and 4 stars to a Silver Medal*(still a high conviction rating) and 3 stars, the fund’s management team continues to serve the retirement needs of our shareholders by delivering less volatile than the market. In other words, DRIPX does not rebound so much, however it also does not have as much to recover from. This approach, we believe, is most likely to reward our shareholder with the retirement benefit they anticipate. 

The best performing stocks in the portfolio during the fiscal year (including dividends) were: Amazon.com Inc. (AMZN), with a cumulative return of 91.78%, Intel Corp. (INTC): 72.31%, Microsoft Corp. (MSFT): 69.33%, Tennant Co. (TNC): 60.84%, Costco Wholesale Corp. (COST): 60.06% and Ecolab Inc. (ECL): 43.58%

The worst performing stocks in the portfolio during the period were: VF Corp. (VFC), with a cumulative loss of -31.58%, Archer-Daniels Midland Co. (ADM), -31.14%, Pfizer Inc. (PFE), -30.44%, NextEra Energy Inc. (NEE), -18.56%, Conagra Brands Inc. (CAG), -17.90% and Polaris Inc. (PII), -16.30%.

You may have noticed that the Fund’s custodial services are moving to Huntington Bank from US Bank. US Bank decided to stop providing custodial services to funds that do not also use its bank for transfer agency services. The Fund’s transfer agent, Mutual Shareholder Services, has served our shareholders well for more than 20 years and we prefer to remain with that company and use the services of Huntington Bank, which offer equally good or possibly better service. 

As always, we thank you for your patient adherence to our wealth-building strategy and, again, for the restraint you have shown during market sell-offs.

The DRIPX Management Team, Vita Nelson, Mario Medina, Lee Nelson, and Byron Perez 

March 28, 2024

* The Medalist Ratings indicate which investments Morningstar believes are likely to outperform a relevant index or peer group average on a risk-adjusted basis over time. Investment products are evaluated on three key pillars (People, Parent, and Process) which, when coupled with a fee assessment, forms the basis for Morningstar’s conviction in those products’ investment merits and determines the Medalist Rating they’re assigned.

Disclaimer:

Past performance is not a guarantee of future results. Must be preceded or accompanied by a prospectus. Mutual fund investing involves risk. Principal loss is possible.

Fund holdings are subject to change and should not be considered a recommendation to buy or sell any security. Please refer to the schedule of investments in the report for complete holdings information.