U.S. Global Investors this webcast we may make forward-looking statements about our relative...
Transcript of U.S. Global Investors this webcast we may make forward-looking statements about our relative...
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www.usfunds.com
1.800.US.FUNDS
U.S. Global InvestorsSearching for Opportunities, Managing Risk
September 11, 200909-585
Frank E. Holmes
CEO and CIO
Susan McGee
President and General Counsel
Catherine Rademacher
CFO
Terry Badger
Director of Communications
GROW Earnings
FY09
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Today’s Presenters
Frank Holmes Susan McGee Catherine Rademacher Terry Badger
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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.
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GROW Strengths
“Go-to” stock for exposure toemerging markets and resources
Debt-free, strong balance sheetwith a reflexive cost structure
Monthly dividend and return onequity discipline
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$0.25
$3.8M
$17.0M
2008
$0.06EPS (diluted)
$1.0MNet Income
$6.5MRevenue
2009
Quarter ended June 30*
Financial Snapshots
* unaudited
YoY Quarters
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$0.02
$0.3M
$5.0M
March 31, 2009
$0.06EPS (diluted)
$1.0MNet Income
$6.5MRevenue
June 30, 2009
Quarter ended*
Financial Snapshots
Sequential Quarters
* unaudited
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$0.71
$10.8M
$56.0M
2008
$(0.15)EPS (diluted)
$(2.2M)Net Income
$23.1MRevenue
2009
Year ended June 30
Financial Snapshots
Fiscal Year
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Assets Under Management
(Average in billions)
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Asset Shift to Resources and Emerging Markets
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-26%Industry Peers*
-61%U.S. Global Investors (GROW)
Calendar 2Q08 vs. 2Q09
* Latest quarterly results filed by Affiliated Managers, Alliance Bernstein, BlackRock, Calamos AssetMgmt, Cohen & Steers, Federated Investors, Franklin Resources, Invesco, Janus Capital Group,Legg Mason, Pzena Investment Mgmt, T. Rowe Price and Waddell & Reed.
Peer Comparison – AUM Growth
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-48%-45%Industry Peers*
-76%-76%U.S. Global Investors
(GROW)
EPSNet Income
* Latest quarterly results filed by Affiliated Managers, Alliance Bernstein, BlackRock, Calamos AssetMgmt, Cohen & Steers, Federated Investors, Franklin Resources, Invesco, Janus Capital Group,Pzena Investment Mgmt, T. Rowe Price and Waddell & Reed.
Peer Comparison – Earnings
Calendar 2Q08 vs. 2Q09
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16%9%Industry Peers*
24%-6%U.S. Global Investors
(GROW)
3-YearCAGR**
1-Year
* Latest quarterly results filed by Affiliated Managers, Alliance Bernstein, BlackRock, Calamos AssetMgmt, 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
Peer Comparison – Return on Equity
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69%Major Banks**
34%Industry Peers*
0%GROW
LT debt to total capital (average)
* Latest quarterly results filed by Affiliated Managers, Alliance Bernstein, BlackRock, Calamos AssetMgmt, 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
Peer Comparison – Leverage for Financials
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Relative Performance – 12 months
BEN = Franklin Resources EPHC = Epoch Holding Corporation
Source: Google
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Relative Performance – 6 months
BEN = Franklin Resources EPHC = Epoch Holding Corporation
Source: Google
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Significant events for S&P Financials
and the VIX
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Communicating Through a Crisis
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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 ofthese mining stocks.
The charts below clearly illustrate the relationship between gold-miningstocks and the federal budget.
The top chart below compares the total-return performance of theS&P 500 (blue line) with that of the Toronto Gold & Precious MineralsIndex* (gold line) going back to 1971, when President Nixon ended dollarconvertibility into gold and deregulated the price of gold.
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Branding – GROW Gets Noticed
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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, 2009
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Significant Event: Subadvisory Changes
Assumed day-to-day management of
Eastern European Fund and Global
Emerging Markets Fund
Ended advisory relationship with
Endeavour Financial
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Combined two fund trusts into
one trust for efficiency
Updated management fees
on some funds
Performance fees to align interests
New distribution plan
Significant Event: Trust Merger
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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
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Income Statement
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Income Statement
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Income Statement
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FY09 by Quarter
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Balance Sheets
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Balance Sheets
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Emerging Markets
and Commodities
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Monthly Motor Vehicles Sold (million units)
Source: Jonathan Anderson, UBS
A New World has Emerged
Year
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Source: The Bank Credit Analyst
For Which Commodities
Will Demand Not Collapse?
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Source: The Bank Credit Analyst
A Massive Increase in Resource-Intensive
Industries While the Economy is Under-Leveraged
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Oil Consumption During
Phases of Industrialization
Source: Barry Bannister, Stifel, Nicolaus & Company, Inc
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Source: Ed Yardeni; www.yardeni.com
Crude Oil Demand in China and India
and Annual Change, 1987-2009
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Source: American Scientist
Past and Future Oil Discoveries
(in Billions of Barrels Per Year)
Discoveries of
new oil reserves
are declining
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The stronger U.S. dollar has had a major impact on EM currencies, particularlythose with large current account deficits and gross external debt.
Source: FactSet, Morgan Stanley Research
Deleveraging impact on EM currencies
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
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Dollar vs. Emerging Markets
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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 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.
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
1941-43 base period. The S&P Volatility Index (VIX) shows the market’s 30-day volatility, and is a widely used measure of market risk.
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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. 09-585
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1.800.US.FUNDS
www.usfunds.com
Come see what’s new on Frank’s blog – visitFrank Talk at www.usfunds.com/franktalk.
Thank You for Attending Today’s Webcast