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 10,

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 Fiscal Year Year ended June Revenue $23.1M $35.0M Net Income $(2.2M) $5.3M EPS (diluted) $(0.15) $0.35 5

6 Financial Snapshots YoY Quarters Quarter ended June 30* Revenue $6.5M $8.6M Net Income $1.0M $1.0M EPS (diluted) $0.06 $0.06 * unaudited 6

7 Financial Snapshots Sequential Quarters Quarter ended* March 31, 2010 June 30, 2010 Revenue $9.4M $8.6M Net Income $1.5M $1.0M EPS (diluted) $0.10 $0.06 * unaudited 7

8 Assets Under Management (Quarter-end average, in billions) 8

9 Peer Comparison AUM Growth Calendar 2Q09 vs. 2Q10 U.S. Global Investors (GROW) 21% Industry Peers* 33% * 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. 9

10 Peer Comparison Earnings Calendar 2Q09 vs. 2Q10* U.S. Global Investors (GROW) Net Income EPS 0% 0% Industry Peers** 57% 49% * Fiscal year for U.S. Global Investors ends June 30, while most peers have December 31 fiscal year-end. ** 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. 10

11 Peer Comparison Return on Equity U.S. Global Investors (GROW) 1-Year 3-Year CAGR** 15% 12% Industry Peers* 10% 13% * 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. ** Compounded Annual Growth Rate Trailing twelve months, quarter ending June 30, 2010 Source: Bloomberg 11

12 Peer Comparison Risk Leverage for Financials LT debt to total capital (average) GROW 0% Industry Peers* 28% Major Banks** 67% * 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 12

13 S&P Financials vs. S&P 500 Source: Bloomberg 13

14 Russell 2000 vs. S&P 500 Domino Effect Source: Bloomberg 14

15 Significant Events FY10 Institutional Shares Institutional AUM Expense Caps GROW Dividends 15

16 New Developments on Our Website Take this quiz and more at 16

17 Investor Alert and Frank Talk 17

18 Income Statement 18

19 Income Statement 19

20 Income Statement 20

21 FY10 by Quarter 21

22 Balance Sheets 22

23 Balance Sheets 23

24 Opportunities in Gold and Emerging Markets 24

25 No Bubble in Gold 25

26 Deflation vs Inflation Debate 26

27 Even with Low Inflation, Gold Rises to All Time High 27

28 Low Real Interest Rates Fuel Gold & Silver 28

29 Why More Investors Like Gold 29

30 Less Debt in Emerging Economies 30

31 E7 vs G7 31

32 E7 vs G7 32

33 Gold Rises in Many Currencies 33

34 Gold Has Performed Well, With Low Volatility Over Past 10 Yrs Gold returns have substantially outperformed equities on a 3yr, 5yr and 10yr horizon (based on data in table below see note for source). Historically, the volatility of gold returns has been lower than S&P 500 volatility. Gold has had a zero to modestly negative correlation to equities, providing strong portfolio diversification benefits. 34

35 Gold Seasonality 35

36 Holidays Drive Gold Demand 36

37 Anticipate Before You Participate Standard Deviation (as of 6/30/10) based on 10-Year Data Rolling 1 Year U.S. Global Investors (GROW) 113.0% NYSE Arca Gold BUGS Index (HUI) 42.3% Crude Oil 37.7% MSCI Emerging Markets (MXEF) 33.5% S&P 500 Index (SPX) 19.6% Gold Bullion 14.8% 12-month rolling volatility of price action over 10 year period View the presentation Anticipate Before You Participate at /investor-resources/publications/research 37

38 Emerging Market Oil Demand Growth Rates 38

39 China Crude Oil Imports 39

40 China s Metals Demand Stabilizing 40

41 China s Industry Moving Inland 41

42 Russia Real Annual Growth Rates, 2010 est est. 42

43 Come Visit Us at Facebook: Twitter: Frank Talk: Investor Alert: 43

44 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 or by calling US-FUNDS ( ). 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. All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. 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. Advanced G-20 economies references members of the G-20 whose economies are considered by the IMF to be developed. This includes Canada, United States, Austria, Belgium, France, Greece, Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, United Kingdom, Australia, Japan and Korea. Emerging G-20 economies references members of the G-20 whose economies are considered by the IMF to be emerging. This includes Brazil, India, Indonesia, Hungary, Russia and Saudi Arabia. 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. The Consumer Price Index (CPI) is one of the most widely recognized price measures for tracking the price of a market basket of goods and services purchased by individuals. The weights of components are based on consumer spending patterns. 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 Russell 2000 Index is a U.S. equity index measuring the performance of the 2,000 smallest companies in the Russell 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. 44