u.s. global investors · may 2011 11-223 10 lt debt to total capital (average) grow 0% industry...
TRANSCRIPT
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www.usfunds.com 1.800.US.FUNDS
U.S. Global Investors Searching for Opportunities, Managing Risk
May 6, 2011 11-223
Frank E. Holmes CEO and CIO
Susan McGee President and General Counsel
Catherine Rademacher CFO
Ryan George Investor Relations
GROW Earnings 3Q 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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2010 2011
Revenue $9.4M $11.4M
Net Income $1.5M $2.7M
EPS (diluted) $0.10 $0.17
Quarter ended March 31*
Financial Snapshots
* unaudited
YoY Quarters
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December 31, 2010 March 31, 2011
Revenue $11.9M $11.4M
Net Income $2.3M $2.7M
EPS (diluted) $0.15 $0.17
Quarter ended*
Financial Snapshots
Sequential Quarters
* unaudited
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Average Assets Under Management
(Quarter-end average, in billions)
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Net Income EPS U.S. Global Investors
(GROW) 83% 70%
Industry Peers* 27% 30%
Peer Comparison – Earnings
Calendar 1Q10 vs. 1Q11
* Median calculations based from the latest quarterly results by T. Rowe Price, Franklin Resources, Invesco, Cohen & Steers, Janus, Calamos, Affiliated Managers, Federated Investors, Waddell & Reed, BlackRock, Pzena Investment Management, Westwood Holdings and Virtus Investment Partners.
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1-Year 3-Year CAGR**
U.S. Global Investors (GROW) 18.9% 11.7%
Industry Peers* 18.7% 8.9%
* Median calculations based from the latest quarterly results by T. Rowe Price, Franklin Resources, Invesco, Cohen & Steers, Janus, Calamos, Affiliated Managers, Federated Investors, Waddell & Reed, BlackRock, Pzena Investment Management, Westwood Holdings and Virtus Investment Partners.
** Compounded Annual Growth Rate Trailing twelve months, quarter ending March 31, 2011
Source: Bloomberg
Peer Comparison – Return on Equity
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LT debt to total capital (average)
GROW 0%
Industry Peers* 17%
Major Banks** 32.4%
* Median calculations based from the latest quarterly results by T. Rowe Price, Franklin Resources, Invesco, Cohen & Steers, Janus, Calamos, Affiliated Managers, Federated Investors, Waddell & Reed, BlackRock, Pzena Investment Management, Westwood Holdings and Virtus Investment Partners.
** 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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U.S. Global Investors (GROW) 2.5%
Industry Peers* 1.9%
• Median calculations based from the latest quarterly results by T. Rowe Price, Franklin Resources, Invesco, Cohen & Steers, Janus, Calamos, Affiliated Managers, Federated Investors, Waddell & Reed, BlackRock, Pzena Investment Management, Westwood Holdings and Virtus Investment Partners.
Peer Comparison – Dividend Yield
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Trailing 12 Month P/E
U.S. Global Investors (GROW) 20.8
Industry Peers* 21.1
• Median calculations based from the latest quarterly results by T. Rowe Price, Franklin Resources, Invesco, Cohen & Steers, Janus, Calamos, Affiliated Managers, Federated Investors, Waddell & Reed, BlackRock, Pzena Investment Management, Westwood Holdings and Virtus Investment Partners.
Peer Comparison – Price-to-Earnings Ratio
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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 – Four Funds in the Top 25 for 10 Year Period
Institutional Update
GROW Dividends
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Fund Recognition: Four Funds Rank in Top 25 for 10 Years
World Precious Minerals Fund (UNWPX) ranked #4
Gold & Precious Metals Fund (USERX) ranked #7
Eastern European Fund (EUROX) ranked #24
The Global Resources Fund (PSPFX) ranked #25
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Rankings were provided to the Wall Street Journal, Barron’s and USA Today by Lipper and include all mutual funds and ETFs tracked by Lipper. Lipper ranked the funds based on 10-year performance data including share prices and reinvested dividends. For funds with multiple share classes, only the largest share class was included. Rankings are based on total annualized return as of 03/31/2011. Past performance is no guarantee of future results.
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Focus on Education
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21 MFEA STAR Awards for Excellence in Education
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Investor Alert and Frank Talk
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Update
Fear and Love Trade Drive Gold Demand
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The S-Curve – Big Question is Where Are We On The Curve?
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A type of curve that shows a rapid, exponential increase in growth for a period time, followed by a tapering or leveling off.
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Government Policy Model — Precursor for Change
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E7 and G7 Population vs GDP
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Compare E7 vs G7 Money Supply Growth
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Gold Would Need to Be Much Higher to Cover U.S. Money Supply
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Gold Demand Drivers
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Driver: The Fear Trade
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Ben Bernanke, Chairman of the Federal Reserve
President Barack Obama
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Inverse Relationship Between the U.S. Dollar and Gold
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Past performance is no guarantee of future results.
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Gold as a Percent of Global Financial Assets
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e denotes estimate.
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Low Real Interest Rates Historically Fuel Gold & Silver
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Tipping Point for Gold 2%
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Why More Investors Like Gold — “Fear Trade”
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U.S. Federal Debt vs. Gold
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Past performance is no guarantee of future results.
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It’s Not the Political Party, It’s the Political Policies
$250/oz.
$1400/oz.
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Fiscal 2010 U.S. Government Revenues & Expenses at a Glance
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58%
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Driver: The Love Trade
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Holidays Drive Gold Demand
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Gold Seasonality — Managing Expectations
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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) 114.4% NYSE Arca Gold BUGS Index (HUI) 38.4%
Crude Oil 37.2%
MSCI Emerging Markets (MXEF) 32.3%
S&P 500 Index (SPX) 19.8%
Gold Bullion 13.8%
12-month rolling volatility of price action over 10 year period
Standard Deviation (as of 03/31/11) based on 10-Year Data
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60 Day Rolling Oscillator
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No Bubble in Gold
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Past performance is no guarantee of future results.
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Importance of Diversification and Rebalancing
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Past performance is no guarantee of future results.
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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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Interested in More Information?
Request Your Free Copy
To receive a poster of The Periodic Table of Commodity Returns
Send your address to [email protected]
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Come Visit Us at…
Facebook: www.facebook.com/usfunds
Twitter: www.twitter.com/usfunds
Frank Talk: www.usfunds.com/franktalk
Investor Alert: www.usfunds.com/alert
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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
All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. Diversification does not protect an investor from market risks and does not assure a profit.
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.
M1 Money Supply includes funds that are readily accessible for spending. 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. 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. The Nasdaq Composite Index is a capitalization-weighted index of all Nasdaq National Market and SmallCap stocks. 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.