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

Transcription

1 U.S. Global Investors Searching for Opportunities, Managing Risk Commodities: Reasons to be a Bull when Everyone s a Bear Frank E. Holmes CEO and Chief Investment Officer Brian Hicks, CFA Portfolio Manager Evan Smith, CFA Portfolio Manager April

2 Fund Recognition Investment leadership results in performance Winner of 26 Lipper Fund Awards and certificates since

3 Government Policy Model Precursor for Change 3

4 Avoiding Another Great Depression 4

5 World Economic Growth 5

6 G7 Countries 6

7 E7 Countries 7

8 U.S. M2 Money Supply Biggest Economy in the World Source: U.S. Global Research 8

9 China M2 Money Supply Most Populated Country in the World Source: U.S. Global Research 9

10 Money Supply and Emerging Markets 10

11 Deleveraging Undermines Global Growth 11

12 Unprecedented Destruction of Wealth 12

13 S&P 500 Equity Index Bottoms 4 to 6 Months Prior to End of Recession 13

14 World Industrial Production Outlook 14

15 Top 20 Oil Producing Countries 15

16 World Oil Demand by Quarter 16

17 China, South Asia, Middle East Support Long-Term Oil Demand 17

18 Developing Nations Demand Set to Grow Rapidly 18

19 World Oil Supply Growth 19

20 Gasoline is Cheap Once Again 20

21 Many Factors Could Disrupt Supply 21

22 Crude Oil Spare Capacity History 22

23 Capacity Still Below 1970 s Capacity OPEC 10 Capacity 23

24 World Depends On Increased Middle East Supply Middle East has nearly two-thirds of world s proved crude oil reserves* and one-third of current crude oil production Spare capacity was largely eliminated by underinvestment and strong oil demand growth Easy production from mega-fields achieved; future production more technically challenging and higher cost I.O.C. s play minor role Commitment to and timing of capacity expansions given market uncertainties and conservative decision making Countries pressured to democratize; how to achieve without instability * Excluding Canadian tar sands 24

25 World Depends On Increased Middle East Supply Presence of violent radical groups Sunni vs. Shiite divide 54 percent of middle east oil exporting countries population is under 25 years old Palestinian-Israeli conflict hostile to western interests U.N. sanctions on Iran A nuclear Iran becomes a regional power 25

26 OPEC Supply Capacity Disruptions Unpredictable But Certain 26

27 High Replacement Cost for Oil 27

28 Increased Operating Costs for Supply 28

29 Global E&P Expenditure Growth vs. Non-OPEC Production Growth 29

30 Financial Investment and Oil Supply/Demand Support Oil Prices 30

31 China s Strong Balance Sheet 31

32 Loan Growth Expands in China 32

33 Bank Lending Drives Recovery 33

34 Real Estate Recovery in China 34

35 Recovery In Exports 35

36 China s New Construction Boom 36

37 2009 Buying Spree for Copper 37

38 Copper Demand Returns 38

39 Dr. Copper 39

40 Infrastructure Drives Steel Demand 40

41 China Stockpiling Iron Ore 41

42 China Coal Restocking on the Horizon 42

43 Coal Imports Picking Up 43

44 Oil Seasonality 44

45 Gold Seasonality 45

46 Silver Seasonality 46

47 Copper Seasonality 47

48 Platinum Seasonality 48

49 What s Driving Energy? We have a situation where all the critical drivers for oil are pointing in the same direction. Source: U.S. Global Research 49

50 What s Driving Gold? The critical drivers for gold are pointing in the same direction. 50

51 Rotation of Commodities Sources: Steele and U.S. Global Research 51

52 Disclosures Please consider carefully the fund s investment objectives, risks, charges and expenses. For this and other important information, obtain a fund prospectus by visiting or by calling US-FUNDS ( ). Read it carefully before investing. Distributed by U.S. Global Brokerage, Inc. 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. All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. The Dow Jones - AIG Commodity Index (DJ-AIGCI) is designed to be a highly liquid and diversified benchmark for the commodity futures market. The DJ-AIGCI is composed of futures contracts on 19 physical commodities. The S&P 500 Stock Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies. The MSCI Emerging Markets Eastern European Index (Russia at 30 percent market-cap weighted) is a capitalization-weighted index that monitors the performance of emerging market stocks from all countries that make up the Eastern European Region. The U.S. Trade Weighted Dollar Index provides a general indication of the international value of the U.S. dollar. The Dow Jones Industrial Average is a price-weighted average of 30 blue chip stocks that are generally leaders in their industry. The Baltic Dry Freight Index is an economic indicator that portrays an assessed price of moving major raw materials by sea as compiled by the London-based Baltic Exchange. 52