u.s. global investors · 2014-05-14 · 1.800.us.funds u.s. global investors searching for...

www.usfunds.com 1.800.US.FUNDS

U.S. Global Investors Searching for Opportunities, Managing Risk

August 30, 2012 12-505

Frank E. Holmes CEO and CIO

Susan McGee President and General Counsel

Catherine Rademacher CFO

Susan Filyk Investor Relations

www.usfunds.com August 2012 12-505 2

Today’s Presenters

Frank Holmes Susan McGee Catherine Rademacher Susan Filyk

www.usfunds.com August 2012 12-505

Forward-Looking Statements

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During this webcast we may make forward-looking statements about our relative business outlook. Any forward-looking statements and all other statements made during this webcast that don’t pertain to historical facts are subject to risks and uncertainties that may materially affect actual results. Please refer to our press release and the corresponding Form 10-K filing for more detail on factors that could cause actual results to differ materially from any described today in forward-looking statements. Any such statements are made as of today, and U.S. Global Investors accepts no obligation to update them in the future.


GROW Strengths

  “Go-to” stock for exposure to emerging markets and resources   Debt-free, strong balance sheet

with a reflexive cost structure   Monthly dividend and return on

equity discipline

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Top Institutional Holders of GROW

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1. Royce and Associates 15%

2. Financial and Investment 9% Management Group

3. Perritt Capital Management 4%

4. TEAM Financial Managers 4%

5. Fidelity Management 4% & Research Co.

Percentage of shares outstanding as of 6/30/2012 Source: NASDAQ


Company Snapshot

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10-Year Annualized 17.6%

 NASDAQ: GROW  Price on 6/30/12: $4.37

 Market Cap: $67.2 million  52-wk Range: $3.98 - $8.70

Source: Bloomberg


Industry Trend — Asset Managers Have Declined with Markets and Redemptions

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Asset Breakdown

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Data for SEC-registered funds as of June 30, 2012.


Managing Expectations — The Math

View the presentation “Anticipate Before You Participate” at www.usfunds.com/investor-resources/publications/research

Rolling 1 Year NYSE Arca Gold BUGS Index (HUI) 37.2%

WTI Crude Oil 35.0%

MSCI Emerging Markets (MXEF) 31.1%

S&P 500 Index (SPX) 18.9%

Gold Bullion 13.3%

12-month rolling volatility of price action over 10 year period

Standard Deviation (as of 06/30/12) based on 10-Year Data


Managing Expectations — Anticipate Before You Participate Measuring Volatility

Number of +10% Moves

Number of -10% Moves

Frequency of ±10% Moves

U.S. Global Investors (GROW) 738 628 52%

NYSE Arca Gold BUGS Index (HUI) 498 321 31%

WTI Crude Oil 446 315 29%

MSCI Emerging Markets (MXEF) 143 180 12%

Gold Bullion 131 60 7%

S&P 500 Index (SPX) 43 93 6%

Calculated over rolling 20-trading day periods. Based on approximately 2,550 total occurrences over the past 10 years as of 06/30/2012.


GROW Dividends — Paid Monthly

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*At share price of $4.37 as of 6/30/2012 Dividends through 6/30/2012


Quarterly Average Assets Under Management

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Annual Earnings Per Share — Past 5 Years

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Annual Pre-Tax Profit Margin — Past 5 Years

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Balance Sheet Strength – No Debt

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Growth 3 Year Average

EPS Growth

Value 3 Year Average

Return on Equity

Income Dividend

Yield

GROW 38.7% 12.9% 5.5%

Peers* 3.4% 12.5% 2.8%

3 Reasons GROW is More Attractive than Peers

Dividend yields calculated as of 6/30/2012. Earnings per share and return on equity based on the quarter ended 6/30/2012.

* Median calculations based from quarterly results ended 6/30/2012 by Affiliated Managers Group, Artio Global Investors, Blackrock, Calamos Asset Management, Cohen & Steers, Federated Investors, GAMCO Investors, INVESCO Ltd., Janus Capital Group, Legg Mason, Pzena Investment Management, T. Rowe Price and Westwood Holdings.

Source: FactSet


GROW Performance —12 Months

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GROW Performance — Past 2 Months

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Income Statement – Financial Analysis

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Catherine Rademacher CFO


Income Statement


Balance Sheets


Significant Events

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Susan McGee President and General Counsel


“Performance and Results Oriented”

Winner of 29 Lipper performance awards, certificates and top rankings since 2000

(Four out of 13 U.S. Global Investors Funds received Lipper performance awards from 2005 to 2008, six out of 13 received certificates from 2000 to 2007,

and two out of 13 received top rankings from 2009 to 2010.)

Investment leadership results in performance


Fund Recognition: 4 Funds in the Top 2 Percent for 10-Year Period

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Branding and Marketing of GROW

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  14 TV/Radio   26 Total Interviews   1,061 Web mentions

  26 Frank Talk blog entries   93 Newsletter

recommendations

Data from 3/31/2012 – 6/30/2012


Recent PR Achievements

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  “Goldwatcher” presentation pulled nearly 180,000 pageviews on Business Insider

  Email subscription of Frank Talk blog launched

  Syndication of commentaries and blog posts continued to grow with more than 60 websites who share our insights with curious investors

  Financial Planning recognized the Global Resources Fund and the power of natural resources


Expanded Sales Team

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Chicago Chicago Hard Assets Conference, 9/21-22

San Antonio FPA National Conference, 9/29

New Orleans New Orleans Investment Conference, 10/24-27

Singapore Asia Mining Indaba, 10/29-31

Upcoming Sales and Marketing Activities

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Sales & Marketing Strategy Opportunities

  Investors are underweight what the world needs — Resources

  Tax free bond funds yielding more than the 10-Year Treasury

  Attractive dividend yields in resources and emerging markets

  Price reversal on equity funds

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Are You Underweight?

Energy & Basic Materials

15% of S&P 500

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S&P 500 – 10 Sectors, 500 Stocks

Source: S&P


Apple is a Want, Global Resources Are Needs: Energy, Food, Water, etc.

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Compare Market Capitalizations

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Global Resources Fund Outperformed – 10 year

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Past performance is no guarantee of future results.


Compare Our Tax Free Yields to Treasury and CDs

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Source: U.S. Global Investors, CD Rates from Bankrate.com as of 7/25/12


Low Volatility — No Down Years Over Past Decade

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Past performance does not guarantee future results.


NEARX — Short Term Tax Free Solution

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The chart illustrates the performance of a hypothetical $10,000 investment made in the fund during the depicted time frame. Figures include reinvestment of capital gains and dividends, but the performance does not include the effect of any direct fees described in the fund’s prospectus which, if applicable, would lower your total returns.


Compare Dividend Yields to 10-Year Government Note

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Attractive Dividend Yields

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Price Reversal: Funds Move Above 50-Day Moving Average

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Apathy in Global Markets Provides Opportunity for Dividend Paying Stocks


Is Over Regulation Causing Apathy for Investing as Stocks Rally?

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Metaphor: Tipping Points, Melting Points H2O is Like Money

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Ice Turns to Water at 32º, but Still H2O


The S-Curve – Big Question is Where Are We On The Curve for Emerging Markets and Commodity Demand?

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The S-Curve is a type of curve that shows a rapid, exponential increase in growth for a period of time, followed by a tapering or leveling off.


Urbanization Drives Dramatic Rise in Wealth

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Emerging World Holds 50% of the Global Population, Just 21% of GDP


Reasons for Active Money Management

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China’s GDP Growth Tends to Stabilize in Fifth Year of Leadership Transition Cycle

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China Poised to Revert to Its Mean

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Rising Wealth Driving +$4 Trillion in Global Infrastructure Spending

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China and India Increasing Share of Global Oil Demand

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Tipping Point — Explosive Growth in Emerging Markets Auto Market

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Zhanxi bridge highway, Beijing China


Gold Price Surged With Increase of U.S. Monetary Base

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Global Liquidity Boom Good for Gold

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Strong Correlation Between Gold and Negative Real Interest Rates

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Ben Bernanke, Chairman of the Federal Reserve


Seasonality Fluctuations Appear Poised to Rebound – XAU Gold Stock Index

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Philadelphia Stock Exchange Gold and Silver Index (XAU)

Source: CIBC


Gold Stocks Underperform Bullion and Offer Opportunity

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Gold Stocks Appear Undervalued to Gold

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Oil Stocks Underperform Oil

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Disconnect Between Oil Prices and Junior Oil Stocks Suggest Opportunities in Stocks

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Reasons for Active Money Management

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Returns are based on historical spot prices or futures prices. Past performance does not guarantee future results.


Trying to Stop a Bull Market Has Risks


Fund Performance

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Come Visit Us at…

Facebook: www.facebook.com/usfunds

Twitter: www.twitter.com/usfunds

Frank Talk: www.usfunds.com

Investor Alert: www.usfunds.com


U.S. Global Investors is Mobile

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Get Investor Alert and Frank Talk On the Go

Visit www.usfunds.com/apps


For more information or questions, please contact our Investor Relations Department:

Susan Filyk 210.308.1286 [email protected]

June Falks 210.308.1202 [email protected]

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Contact Us


Disclosures Please consider carefully a fund’s investment objectives, risks, charges and expenses. For this and other important information, obtain a fund prospectus by visiting www.usfunds.com or by calling 1-800-US-FUNDS (1-800-873-8637). Read it carefully before investing. Distributed by U.S. Global Brokerage, Inc.

Unlike bank savings accounts, an investment in a municipal bond fund is neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor.

Gold, precious metals, and precious minerals funds may be susceptible to adverse economic, political or regulatory developments due to concentrating in a single theme. The prices of gold, precious metals, and precious minerals are subject to substantial price fluctuations over short periods of time and may be affected by unpredicted international monetary and political policies. We suggest investing no more than 5% to 10% of your portfolio in these sectors.

Foreign and emerging market investing involves special risks such as currency fluctuation and less public disclosure, as well as economic and political risk. Because the Global Resources Fund concentrates its investments in a specific industry, the fund may be subject to greater risks and fluctuations than a portfolio representing a broader range of industries. By investing in a specific geographic region, a regional fund’s returns and share price may be more volatile than those of a less concentrated portfolio.

Tax-exempt income is federal income tax free. A portion of this income may be subject to state and local income taxes, and if applicable, may subject certain investors to the Alternative Minimum Tax as well. Each tax free fund may invest up to 20% of its assets in securities that pay taxable interest. Income or fund distributions attributable to capital gains are usually subject to both state and federal income taxes. Bond funds are subject to interest-rate risk; their value declines as interest rates rise. The tax free funds may be exposed to risks related to a concentration of investments in a particular state or geographic area. These investments present risks resulting from changes in economic conditions of the region or issuer.


Disclosures

Morningstar Ratings are based on risk-adjusted return. The Overall Morningstar Rating for a fund is derived from a weighted-average of the performance figures associated with its three-, five- and ten-year (if applicable) Morningstar Rating metrics. Past performance does not guarantee future results. For each fund with at least a three-year history, Morningstar calculates a Morningstar Rating™ based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund’s monthly performance (including the effects of sales charges, loads, and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. (Each share class is counted as a fraction of one fund within this scale and rated separately, which may cause slight variations in the distribution percentages.)

Although Lipper makes reasonable efforts to ensure the accuracy and reliability of the data contained herein, the accuracy is not guaranteed by Lipper. Users acknowledge that they have not relied upon any warranty, condition, guarantee, or representation made by Lipper. Any use of the data for analyzing, managing, or trading financial instruments is at the user's own risk. This is not an offer to buy or sell securities.

Standard deviation is a measure of the dispersion of a set of data from its mean. The more spread apart the data, the higher the deviation. Standard deviation is also known as historical volatility. M2 Money Supply is a broad measure of money supply that includes M1 in addition to all time-related deposits, savings deposits, and non-institutional money-market funds. M3 money supply is the broadest monetary aggregate, including physical currency, demand accounts, savings and money market accounts, certificates of deposit, deposits of eurodollars and repurchase agreements. Alpha is a measure of performance on a risk-adjusted basis. Alpha takes the volatility (price risk) of a mutual fund and compares its risk-adjusted performance to a benchmark index. The excess return of the fund relative to the return of the benchmark index is a fund's alpha.


Disclosures

It’s important to consider the differences between the Near-Term Tax Free Fund and Tax Free Fund and a Bank CD before investing.

Compare Near-Term Tax Free Fund and Tax Free Fund Bank CD

Type of Investment and Objective Municipal bond fund; seeks current income that is exempt from federal income tax and seeks preservation of capital

Certificate of deposit; entitles the bearer to receive interest

Primary Investments Investment grade municipal bonds A promissory note issued by a bank

Stable share price? No, but seeks minimal fluctuations Yes

Withdrawal penalty? No Yes, withdrawal before the maturity date usually incurs a penalty

FDIC insured? No Yes, up to $250,000

The CD interest rate is typically a fixed rate of interest, and payable on a set maturity date. The 30-day yield is used for bond funds, balanced funds, and stock funds. It consists of the interest income the fund pays over a 30-day period, net of expenses, expressed as an annualized percentage of the fund’s share price. Tax Equivalent Yield is the before-tax yield you would have to get from a higher-paying but taxable investment to equal the yield from a tax-exempt investment and was computed assuming a 35% tax rate.


Disclosures

The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. The NYSE Arca Gold BUGS (Basket of Unhedged Gold Stocks) Index (HUI) is a modified equal dollar weighted index of companies involved in gold mining. The HUI Index was designed to provide significant exposure to near term movements in gold prices by including companies that do not hedge their gold production beyond 1.5 years. The NYSE Arca Gold Miners Index is a modified market capitalization weighted index comprised of publicly traded companies involved primarily in the mining for gold and silver. The index benchmark value was 500.0 at the close of trading on December 20, 2002. The Russell 2000 Index is a U.S. equity index measuring the performance of the 2,000 smallest companies in the Russell 3000. The Russell 3000 Index consists of the 3,000 largest U.S. companies as determined by total market capitalization.

The S&P 500 Stock Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies. The S&P/TSX Venture Composite Index is a broad market indicator for the Canadian venture capital market. The index is market capitalization weighted and, at its inception, included 531 companies. A quarterly revision process is used to remove companies that comprise less than 0.05% of the weight of the index, and add companies whose weight, when included, will be greater than 0.05% of the index. The Philadelphia Stock Exchange Gold and Silver Index (XAU) is a capitalization-weighted index that includes the leading companies involved in the mining of gold and silver. The S&P 500 Oil & Gas Exploration & Production Index is a capitalization-weighted Index. The index is comprised of six stocks whose primary function is exploring for natural gas and oil resources on land or at sea.

Holdings as a percentage of net assets as of 6/30/2012: Apple: (All American Equity Fund 3.43%, Holmes Growth Fund 4.08%); AT&T: (All American Equity Fund 1.05%, Global MegaTrends Fund 2.05%); BMO Junior Oil ETF: 0.00%; Energy Select Sector SPDR: 0.00%; General Electric Co: 0.00%; iShares Russell 2000 Index ETF: 0.00%; Market Vectors Gold Miners ETF: (Gold and Precious Metals Fund 0.07%, World Precious Minerals Fund 0.07%); Market Vectors Junior Gold Miners ETF: 0.00%; Materials Select Sector SPDR: (Global Resources Fund 0.08%); SPDR S&P Global Natural Resources ETF: 0.00%; Sprint: (Global MegaTrends Fund 1.69%); Verizon: (All American Equity Fund 1.18%, Global MegaTrends Fund 2.03%).


Disclosures

Investment Objective: The Global Resources Fund is an actively managed fund that takes a diversified approach to the natural resources sector by investing in energy and basic materials. The fund invests in companies involved in the exploration, production and processing of petroleum, natural gas, coal, alternative energies, chemicals, mining, iron and steel, and paper and forest products, and can invest in any part of the world.

The Select Sector SPDR ETFs are passively managed funds that seek to replicate as closely as possible, before fees and expenses, the performance of the S&P 500 Index. Each Select Sector SPDR is an “index fund” that invests in a particular sector or group of industries represented by a specified Select Sector Index. The companies included in each Select Sector Index are selected on the basis of general industry classification from a universe of companies defined by the S&P 500 Index.

Liquidity: The Global Resources Fund can be purchased or sold at a net asset value (NAV) determined at the end of each trading day. The Select Sector SPDR ETFs can be purchased or sold intraday. These purchases and redemptions may generate brokerage commissions and other charges not reflected in the ETF’s published expense ratio.

Safety/Fluctuations of principal/return: Loss of money is a risk of investing in the Global Resources Fund and the Select Sector SPDR ETFs. Shares of the three securities are subject to sudden fluctuations in value. The Energy Select Sector and Materials Select Sector SPDR Funds may also be subject to bid-ask premiums or discounts to net asset value (NAV) that could adversely affect a shareholder’s actual returns.

Tax features: The Global Resources Fund may make distributions that may be taxed as ordinary income or capital gains. Under current federal law, long-term capital gains for individual investors in the fund are taxed at a maximum rate of 15%. For the Energy Select Sector and Materials Select Sector SPDR Funds, long-term capital gain distributions will result from gains on the sale or exchange of capital assets held by a Fund for more than one year. Any long-term capital gains distributions you receive from a Fund are taxable as long-term capital gain regardless of how long you have owned your shares. Long-term capital gains are currently taxed at a maximum of 15%. Information provided here is neither tax nor legal advice and is general in nature. Federal and state laws and regulations are subject to change.

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u.s. global investors · 2014-05-14 · 1.800.us.funds u.s. global investors searching for...

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