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

Transcription

1 U.S. Global Investors Searching for Opportunities, Managing Risk Frank E. Holmes CEO and CIO Susan McGee President and General Counsel Catherine Rademacher CFO Terry Badger Director of Communications GROW Earnings FY US.FUNDS September 11,

2 Today s Presenters Frank Holmes Susan McGee Catherine Rademacher Terry Badger 2

3 Forward-Looking Statements 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. 3

4 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 4

5 Financial Snapshots YoY Quarters Quarter ended June 30* Revenue Net Income EPS (diluted) 2008 $17.0M $3.8M $ $6.5M $1.0M $0.06 * unaudited 5

6 Financial Snapshots Sequential Quarters Quarter ended* Revenue Net Income EPS (diluted) March 31, 2009 $5.0M $0.3M $0.02 June 30, 2009 $6.5M $1.0M $0.06 * unaudited 6

7 Financial Snapshots Fiscal Year Year ended June 30 Revenue Net Income EPS (diluted) 2008 $56.0M $10.8M $ $23.1M $(2.2M) $(0.15) 7

8 Assets Under Management (Average in billions) 8

9 Asset Shift to Resources and Emerging Markets 9

10 Peer Comparison AUM Growth Calendar 2Q08 vs. 2Q09 U.S. Global Investors (GROW) Industry Peers* -61% -26% * Latest quarterly results filed by Affiliated Managers, Alliance Bernstein, BlackRock, Calamos Asset Mgmt, Cohen & Steers, Federated Investors, Franklin Resources, Invesco, Janus Capital Group, Legg Mason, Pzena Investment Mgmt, T. Rowe Price and Waddell & Reed. 10

11 Peer Comparison Earnings Calendar 2Q08 vs. 2Q09 U.S. Global Investors (GROW) Industry Peers* Net Income -76% -45% EPS -76% -48% * Latest quarterly results filed by Affiliated Managers, Alliance Bernstein, BlackRock, Calamos Asset Mgmt, Cohen & Steers, Federated Investors, Franklin Resources, Invesco, Janus Capital Group, Pzena Investment Mgmt, T. Rowe Price and Waddell & Reed. 11

12 Peer Comparison Return on Equity U.S. Global Investors (GROW) Industry Peers* 1-Year -6% 9% 3-Year CAGR** 24% 16% * Latest quarterly results filed by Affiliated Managers, Alliance Bernstein, BlackRock, Calamos Asset Mgmt, 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 June 30, 2009 Source: Bloomberg 12

13 Peer Comparison Leverage for Financials LT debt to total capital (average) GROW Industry Peers* Major Banks** 0% 34% 69% * Latest quarterly results filed by Affiliated Managers, Alliance Bernstein, BlackRock, Calamos Asset Mgmt, Cohen & Steers, Federated Investors, Franklin Resources, Invesco, Janus Capital Group, Legg Mason, Pzena Investment Mgmt, 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 13

14 Relative Performance 12 months BEN = Franklin Resources EPHC = Epoch Holding Corporation Source: Google 14

15 Relative Performance 6 months BEN = Franklin Resources EPHC = Epoch Holding Corporation Source: Google 15

16 Significant events for S&P Financials and the VIX 16

17 Communicating Through a Crisis 17

18 Branding Education Why the Time Could Be Right for Gold-Mining Stocks By Frank Holmes, CEO and Chief Investment Officer Conditions have improved for gold equities, and economic policy decisions being made in Washington could further increase the investment appeal of these mining stocks. The charts below clearly illustrate the relationship between gold-mining stocks and the federal budget. The top chart below compares the total-return performance of the S&P 500 (blue line) with that of the Toronto Gold & Precious Minerals Index* (gold line) going back to 1971, when President Nixon ended dollar convertibility into gold and deregulated the price of gold. 18

19 Branding GROW Gets Noticed 19

20 Branding GROW Gets Noticed U.S. Global Investors had nearly $25 million sitting in the bank (15% of its market cap) and no long-term debt. It s hard to argue with that. Motley Fool June 8,

21 Significant Event: Subadvisory Changes Assumed day-to-day management of Eastern European Fund and Global Emerging Markets Fund Ended advisory relationship with Endeavour Financial 21

22 Significant Event: Trust Merger Combined two fund trusts into one trust for efficiency Updated management fees on some funds Performance fees to align interests New distribution plan 22

23 Significant Event: Expense Caps Contractual caps on equity funds expire effective October 1 Voluntary caps take effect October 1 Education campaign on factors that impact costs for fund shareholders 23

24 Income Statement 24

25 Income Statement 25

26 Income Statement 26

27 FY09 by Quarter 27

28 Balance Sheets 28

29 Balance Sheets 29

30 Emerging Markets and Commodities 30

31 A New World has Emerged Monthly Motor Vehicles Sold (million units) Source: Jonathan Anderson, UBS Year 31

32 For Which Commodities Will Demand Not Collapse? Source: The Bank Credit Analyst 32

33 A Massive Increase in Resource-Intensive Industries While the Economy is Under-Leveraged Source: The Bank Credit Analyst 33

34 Oil Consumption During Phases of Industrialization Source: Barry Bannister, Stifel, Nicolaus & Company, Inc 34

35 Crude Oil Demand in China and India and Annual Change, Source: Ed Yardeni; 35

36 Past and Future Oil Discoveries (in Billions of Barrels Per Year) Discoveries of new oil reserves are declining Source: American Scientist 36

37 Deleveraging impact on EM currencies The stronger U.S. dollar has had a major impact on EM currencies, particularly those with large current account deficits and gross external debt. Source: FactSet, Morgan Stanley Research RUB = Russian Rouble, MXN = Mexican Peso, HUF = Hungarian Forint, INR = Indian Rupee, BRL = Brazilian Real, TRY = New Turkish Lyra, KRW = Korean Won, ZAR = South African Rand 37

38 Dollar vs. Emerging Markets 38

39 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. All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. 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. 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 Nasdaq Composite Index is a capitalization-weighted index of all Nasdaq National Market and SmallCap stocks. The S&P 500 Financials Index is a capitalization-weighted index. The index was developed with a base level of 10 for the base period. The S&P Volatility Index (VIX) shows the market s 30-day volatility, and is a widely used measure of market risk. 39

40 Disclosures The Toronto Stock Exchange Gold and Precious Minerals Index is a capitalization-weighted index designed to measure the performance of the gold and precious minerals sector of the TSX 300 Index. Gold funds may be susceptible to adverse economic, political or regulatory developments due to concentrating in a single theme. The price of gold is 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 gold or gold stocks. The following securities mentioned in the presentation were held by one or more of U.S. Global Investors clients as of 6/30/09: Petroleo Brasileiro SA

41 Thank You for Attending Today s Webcast US.FUNDS Come see what s new on Frank s blog visit Frank Talk at /franktalk. 41