www.usfunds.com 1.800.US.FUNDS
U.S. Global Investors Searching for Opportunities, Managing Risk
February 3, 2011 11-014
Frank E. Holmes CEO and CIO
Susan McGee President and General Counsel
Catherine Rademacher CFO
Ryan George Investor Relations
GROW Earnings Q2 2011
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Today’s Presenters
Frank Holmes Susan McGee Catherine Rademacher Ryan George
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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-Q 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.
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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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2009 2010
Revenue $9.0M $11.9M
Net Income $1.5M $2.3M
EPS (diluted) $0.10 $0.15
Quarter ended December 31*
Financial Snapshots
* unaudited
YoY Quarters
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September 30, 2010 December 31, 2010
Revenue $8.9M $11.9M
Net Income $1.3M $2.3M
EPS (diluted) $0.08 $0.15
Quarter ended*
Financial Snapshots
Sequential Quarters
* unaudited
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Average Assets Under Management
(Quarter-end average, in billions)
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Calendar 4Q09 vs. 4Q10
U.S. Global Investors (GROW) 6%
Industry Peers* 8%
* Median AUM growth from latest quarterly results filed by BlackRock, Cohen & Steers, Federated Investors, Franklin Resources, Invesco, Janus Capital Group, Legg Mason, T. Rowe Price and Waddell & Reed.
Peer Comparison – AUM Growth
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Net Income EPS U.S. Global Investors
(GROW) 55% 50%
Industry Peers** 37% 38%
** Median AUM growth from latest quarterly results filed by BlackRock, Cohen & Steers, Federated Investors, Franklin Resources, Invesco, Janus Capital Group, Legg Mason, T. Rowe Price and Waddell & Reed.
Peer Comparison – Earnings
Calendar 4Q09 vs. 4Q10
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1-Year 3-Year CAGR**
U.S. Global Investors (GROW) 16% 12%
Industry Peers* 16% 13%
* Latest quarterly results filed by BlackRock, Cohen & Steers, Federated Investors, Franklin Resources, Invesco, Janus Capital Group, Legg Mason, T. Rowe Price and Waddell & Reed.
** Compounded Annual Growth Rate Trailing twelve months, quarter ending December 31, 2010
Source: Bloomberg
Peer Comparison – Return on Equity
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LT debt to total capital (average)
GROW 0%
Industry Peers* 30%
Major Banks** 63%
* Latest quarterly results filed by BlackRock, Cohen & Steers, Federated Investors, Franklin Resources, Invesco, Janus Capital Group, Legg Mason, T. Rowe Price and Waddell & Reed.
** Latest quarterly results filed by: Bank of America, Citigroup, JP Morgan, Wells Fargo, U.S. Bancorp, Morgan Stanley, Goldman Sachs.
Source: Baseline, latest available figures
Peer Comparison – Risk Leverage for Financials
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Income Statement – Financial Analysis
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Catherine Rademacher CFO
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Income Statement (unaudited)
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Income Statement (unaudited)
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Income Statement (unaudited)
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Balance Sheets
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Balance Sheets
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Significant Events
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Susan McGee President and General Counsel
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Significant Events During the Quarter
Fund Performance Updates – Lipper, Zacks Research
Institutional Update – Institutional Class Fund Growth
GROW Dividends
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Fund Performance: Global Resources Fund
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Global Resources Fund Rank
Number of funds in category
1-year 1 131
5-year 17 54 10-year 1 32
Past performance does not guarantee future results.
Lipper Rankings for Global Natural Resource Funds as of 12/31/10, Based on Total Return
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Fund Recognition: Zacks Investment Research
The Eastern European Fund (EUROX) one of five top European Mutual Funds to own
The Global Resources Fund (PSPFX) one of five top Energy Mutual Funds to own
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Zacks gave the funds a “Zacks #1 Rank” based on its expectations of the funds’ performance relative to their peers as of December 31, 2010. As of 12/31/10, the Eastern European Fund earned a Zacks Rank of 1 for the 1-year, 3-year, 5-year and 10-year periods, out of 29 European Mutual Funds. As of 12/31/10, the Global Resources Fund earned a Zacks Rank of 1 for the 1-year, 3-year, 5-year and 10-year periods, out of 38 Energy Mutual Funds. Zacks assigns Zacks Mutual Fund Ranks [TM] on a scale from 1 to 5 where 1 is the best and 5 is the worst. Zacks Mutual Fund Ranks are based on an exclusive process created by the Zacks Quantitative Research Department, evaluating the average Zacks Rank for the stocks owned by a fund. Sales charges, loads and redemption fees are not considered when determining the Zacks Mutual Fund Rank. Past Performance is not a guarantee of future results.
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Institutional Update
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Growth in institutional class of funds
World Precious Minerals Fund (UNWPX) added to Schwab Select List
Growth in assets through institutional platforms
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Investor Alert and Frank Talk
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Outlook for Emerging Markets and Natural Resources
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The S-Curve – Big Question is Where Are We On The Curve? Where is the Tipping Point?
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Government Policy Model — Precursor for Change
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E7 and G7 Population vs GDP
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As the earth’s population swells to 7 billion, the migration to cities accelerates, incomes rise, and people desire the things that improve their lives, thus increasing global demand for commodities.
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$6 Trillion in Infrastructure Over the Next Three Years Could Create Epic Demand for Commodities
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Infrastructure Spending and Oil Demand March Together Barrels of Oil per Day/1000
Source: PIRA China
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Chindia — Rising Middle Class
Source: PIRA
Source: padanisaa.blogspot.com
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Rising Incomes in Emerging Markets Sustain Demand
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Emerging Market Car Sales Help Detroit’s Rebound and Demand for Resources
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Buick Excel, The most popular car in China Time Magazine
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Global Oil Demand Remains Strong
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North Sea
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Grain Demand in China is Early in “S” Curve
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Reasons for Active Money Management
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The Periodic Table of Commodity Returns
Returns are based on historical spot prices or futures prices. Past performance does not guarantee future results.
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Importance of Diversification and Rebalancing Why Diversify with Global Resources?
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Anticipate Before You Participate
View the presentation “Anticipate Before You Participate” at www.usfunds.com/investor-resources/publications/research
Rolling 1 Year
U.S. Global Investors (GROW) 114.5% NYSE Arca Gold BUGS Index (HUI) 39.6%
Crude Oil 37.3%
MSCI Emerging Markets (MXEF) 33.1%
S&P 500 Index (SPX) 19.7%
Gold Bullion 14.3%
12-month rolling volatility of price action over 10 year period
Standard Deviation (as of 12/31/10) based on 10-Year Data
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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
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Listen to Our Outlook for Resources
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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.
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. 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.
The Eastern European Fund invests more than 25% of its investments in companies principally engaged in the oil & gas or banking industries. The risk of concentrating investments in this group of industries will make the fund more susceptible to risk in these industries than funds which do not concentrate their investments in an industry and may make the fund’s performance more volatile.
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.
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Disclosures
The Gold and Precious Metals Fund (USERX) ranked #193 out of 21,767, #39 out of 14,636, and #13 out of 8,647 among all mutual funds by Lipper for total return for the 1-, 5- and 10-year periods ended December 31, 2010. The World Precious Minerals Fund (UNWPX) ranked #72 out of 21,767, #48 out of 14,636, and #7 out of 8,647 among all mutual funds by Lipper for total return for the 1-, 5- and 10-year periods ended December 31, 2010. The Eastern European Fund (EUROX) ranked #4,584 out of 21,767, #8,116 out of 14,636, and #40 out of 8,647 among all mutual funds by Lipper for total return for the 1-, 5- and 10-year periods ended December 31, 2010. The Global Resources Fund (PSPFX) ranked #142 out of 21,767, #622 out of 14,636, and #45 out of 8,647 among all mutual funds by Lipper for total return for the 1-, 5- and 10-year periods ended December 31, 2010. Past performance does not guarantee future results.
All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. 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 S&P 500 Stock Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies. 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. R-squared is a statistical measure that represents the percentage of a fund or security's movements that can be explained by movements in a benchmark index. R-squared values range from 0 to 100. An R-squared of 100 means that all movements of a security are completely explained by movements in the index. Diversification does not protect an investor from market risks and does not assure a profit. PIGS refers to Portugal, Ireland, Greece and Spain. Holdings as a percentage of net assets as of 12/31/2010 in the Gold and Precious Metals Fund, World Precious Minerals Fund, Global Resources Fund and Eastern European Fund: General Motors 0.00%.