U.s. Global Investors, Inc. · NASDAQ:GROW
U.s. Global Investors — Investor Presentation (June 2004)
26 slides from U.s. Global Investors's investor presentation, Jun 8, 2004
Slide 1: Holmes Growth Fund Alpha Presentation
U.S. Global Investors Holmes Growth Fund Alpha Presentation June 8, 2004 1-800-US-FUNDS www.usfunds.com
Slide 2: Asset Class Rotation
U.S. Global Investors Asset Class Rotation • Different asset classes have different cyclical patterns 1-800-US-FUNDS • Mid-cap performance – Bonnel Territory www.usfunds.com 2
Slide 3: Asset Class Rotation
U.S. Global Investors Asset Class Rotation • Financial market relationships are characterized by investment cycles whose direction and amplitude change over time. • It is important to understand the critical drivers for each security and asset class. • Markowitz: “Reversion to the mean.” 1-800-US-FU
Slide 4: Asset Class Rotation: Inter-Market Relationships
U.S. Global Investors Asset Class Rotation • Inter-Market Relationships • We believe the essence of forecasting lies in a process that focuses on the current and historical inter-market dynamics and relationships among countries (GDPs), currencies, interest rates, commodities, bonds, earnings and eq
Slide 5: Sector Rankings
U.S. Global Investors Sector Rankings 1-800-US-FUNDS www.usfunds.com 5
Slide 6: What is Alpha?
U.S. Global Investors What is Alpha? • Alpha is a measure of the difference between a fund’s actual return and its expected performance as measured by beta. • True alpha measures the skill of the investment team. 1-800-US-FUNDS www.usfunds.com 6
Slide 7: What is Alpha?
U.S. Global Investors What is Alpha? • Alpha and beta are independent contributors to returns and should be evaluated separately. • Alpha can be created in three ways • Security Selection • Market Selection • Cash Management • Market bets are beta bets • Growth vs. Value • Small Cap vs. Large Cap 1-
Slide 8: What is Alpha?
U.S. Global Investors What is Alpha? • Alpha is about crafting investment factors together and determining how much weight to apply to those factors. • Market Selection (Top Down) • Security Selection (Bottom Up) • Dynamic Cash Management (Risk Management) • We believe successful investing is both a
Slide 9: Alpha Factor Rankings
U.S. Global Investors Alpha Factor Rankings 1-800-US-FUNDS www.usfunds.com 9
Slide 10: Investment Factors
U.S. Global Investors Investment Factors • Earnings Momentum • This strategy buys stocks with positive earnings surprises and upward estimate revisions. • Relative Value • This strategy buys stocks which are considered cheap using industry relative price ratios. • These two investment factors genera
Slide 11: Bonnel Investment Process: Momentum
U.S. Global Investors Bonnel Investment Process Positive YoY Revenue Growth for Past Quarter Revenue Growth Accelerating Revenue Growth Momentum Revenue Reversal Momentum EPS Growth Positive YoY EPS Growth for Past Quarter Accelerating EPS Growth Momentum EPS Reversal Technical Positive Trend – 50 d
Slide 12: USGI Investment Process
U.S. Global Investors USGI Investment Process Investment Factors Results Top Down Analysis + Bottom Up = Alpha Analysis + Quantitative Risk Management 1-800-US-FUNDS www.usfunds.com 12
Slide 13: USGI Investment Process: Quantitative Time Management
U.S. Global Investors USGI Investment Process Macro Top Down Investment Landscape Economic Backdrop Sectors Best to Worst Time Management Bottom Up Revenue Growth Earnings Growth Company Fundamentals Quantitative Oscillators & Histograms Correlation Analysis 5/20/60 1-800-US-FUNDS www.usfunds.com Mi
Slide 14: Top Down Investment Process
U.S. Global Investors Top Down Investment Process Legislative Changes Investment Landscape Monetary Policy Fiscal Policy Top Down GDP Growth Economic Backdrop Inflation Investment Cycles Valuation Sectors EPS Growth Macro Sector Factors 1-800-US-FUNDS www.usfunds.com 14
Slide 15: Bottom Up Investment Process
U.S. Global Investors Bottom Up Investment Process YoY Quarterly Growth Revenue Growth YoY Yearly Growth Forecasts & Revisions Bottom Up YoY Quarterly Growth Earnings Growth YoY Yearly Growth Forecasts & Revisions Management Company Fundamentals Business Outlook Valuation - Holt CFROI 1-800-US-FUNDS
Slide 16: Quantitative Investment Process
U.S. Global Investors Quantitative Investment Process Daily SDA Oscillators & Histograms Weekly SDA Standard Deviation Analysis Monthly SDA Quantitative Correlations Analysis Historical Relationships Critical Drivers Trend Analysis 5/20/60 Rates of Change Weekly, Quarterly, Risk Management Monthly 1
Slide 17: Market Rotation
U.S. Global Investors Market Rotation # of % of Occurrences Occurrences + 2StdDevMove 17.00 1.4% + 1StdDevMove 191.00 15.9% -1 StdDev Move 211.00 17.6% 1-800-US-FUNDS -2 StdDev Move 30.00 2.5% www.usfunds.com 17
Slide 18: Market Rotation
U.S. Global Investors Market Rotation # of % of Occurrences Occurrences + 2StdDev Move 7.00 0.6% 1-800-US-FUNDS + 1StdDev Move 170.00 14.2% www.usfunds.com -1 StdDev Move 214.00 17.8% -2 StdDev Move 42.00 3.5% 18
Slide 19: Sector Rotation
U.S. Global Investors Sector Rotation # of % of Occurrences Occurrences + 2StdDev Move 27.00 2.3% + 1StdDev Move 209.00 17.4% -1 StdDev Move 225.00 18.8% 1-800-US-FUNDS -2 StdDev Move 7.00 0.6% www.usfunds.com 19
Slide 20: Sector Rotation
U.S. Global Investors Sector Rotation # of % of Occurrences Occurrences + 2StdDev Move 18.00 1.5% 1-800-US-FUNDS + 1StdDev Move 210.00 17.5% www.usfunds.com -1 StdDev Move 218.00 18.2% -2 StdDev Move 12.00 1.0% 20
Slide 21: Investment Models
U.S. Global Investors Investment Models • Dynamic models • Directional, responsive and designed to quickly generate meaningful discussions and courses of action. • Probability based • Our models include statistical price action and probability analysis. • Matrix of Models • We have created a matrix
Slide 22: USGI's Alpha
U.S. Global Investors USGI’s Alpha • Top Down • Monday - We focus on macroeconomic factors and their inter-market relationships • Bottom Up • Tuesday through Friday - We focus on finding the best stocks to own, based on critical drivers. • Risk Management • Our stock selection process focuses on com
Slide 23: USGI's Alpha: Average Alpha of Morningstar Categories
U.S. Global Investors USGI’s Alpha Average Alpha of Selected Morningstar Categories Peer Group Average UNWPX USERX Precious Metals 35.5% 59.2% 47.2% Average Alpha of Selected Morningstar Categories Peer Group Average PSPFX Natural Resources 6.6% 29.0% Source: Morningstar, as of 4/30/04 1-800-US-FUND
Slide 24: Summary
U.S. Global Investors Summary • By creating a disciplined but flexible system to investment decision making, along with prudent and tangible risk control measures, U.S. Global Investors seeks to maximize opportunities to provide superior risk-adjusted returns over time. • Our dynamic fund management
Slide 25: Bonnel Growth Fund
U.S. Global Investors Bonnel Growth Fund 1-800-US-FUNDS www.usfunds.com 25
Slide 26: Disclosure
U.S. Global Investors Disclosure Before investing, you should consider carefully the fund’s investment objectives, risks, charges and expenses. For this and other important information, please obtain a fund prospectus by visiting www.usfunds.com/adviser or by calling 1-800-873-3639, option 2. Distri
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