U.s. Global Investors, Inc. · NASDAQ:GROW
U.s. Global Investors — Investor Presentation (June 2016)
78 slides from U.s. Global Investors's investor presentation, June 2016
Slide 1: Approved for one hour of Continuing Education credit
Approved for one hour of Continuing Education credit through the CFP board.
Slide 2: Today's Speakers
usfunds.com Today’s Speakers Moderator Frank Holmes Aram Shishmanian Lisa Aston U.S. Global Investors World Gold Council U.S. Global Investors CEO and CIO Chief Executive Officer Marketing Leader usfunds.com June 2016 | 16-196 2
Slide 3: Be Sure to Participate in Our Polls
usfunds.com Be Sure to Participate in Our Polls You Could Be a Winner! 24 Carat Gold Plated Horseshoe Three opportunities to win: We’ll select one person at random from each poll question. usfunds.com June 2016 | 16-196 3
Slide 4: Poll Question #1
usfunds.com Poll Question #1 How is gold included in your portfolio? usfunds.com June 2016 | 16-196 4
Slide 5: Best Quarter in Years
BEST QUARTER IN 30 YEARS ~ oes: Loe ae a p ° i eS) heey *: Sa et a oe ' ety ML pee 3 on, sO om es be eee ont - : - “ ee iim + 2 A \) iy Up v7), . o 3 HAS RISEN 16.5% YEAR-TO-DATE April 1, 2016 + usfunds.com
Slide 6: Gold Just Had Its Best Quarter in 30 Years
usfunds.com Gold Just Had Its Best Quarter in 30 Years usfunds.com June 2016 | 16-196 6
Slide 7: We'll Address These Questions in Our Webcast Today
usfunds.com We’ll Address These Questions in Our Webcast Today • Why does gold have timeless appeal to investors? • What are the “Fear Trade” and the “Love Trade” and how do they drive gold demand? • How do historical and seasonal patterns affect gold? • Is the gold rally we have seen this year sust
Slide 8: Gold Has Been Used as a Store of Value and Currency for Centuries
Gold Has Been Used as a Store of Value and Currency for Centuries Because It Is: e Durable e Divisible e Rare e Widely Accepted ® Portable
Slide 9: Gold Demand Drivers
Gold Demand Drivers: Ras
Slide 10: Driver: The Fear Trade
usfunds.com Driver: The Fear Trade Janet Yellen, Chairman President Barack Obama of the Federal Reserve usfunds.com June 2016 | 16-196 10
Slide 11: The Economist, February 26, 2016
February 20 - 26, 2016 The : Economist -FEORUARY 201-26n4 2016 THE WORLD ECONOMY Out of ammo?
Slide 12: Nominal Interest Rates, Real Interest Rates
Nominal Interest Rates Real Interest Rates Real Interest Rate = Nominal Interest Rate - Inflation 12
Slide 13: Gold Rebound Has Been Linked to Fall in Interest Rates
usfunds.com Gold Rebound Has Been Linked to Fall in Interest Rates usfunds.com June 2016 | 16-196 13
Slide 14: The Inverse Relation Between Real Interest Rates and the Price of Gold
usfunds.com The Inverse Relation Between Real Interest Rates and the Price of Gold usfunds.com June 2016 | 16-196 14
Slide 15: The Great Tectonic Shift of Physical Gold From West to East
usfunds.com The Great Tectonic Shift of Physical Gold From West to East usfunds.com June 2016 | 16-196 15
Slide 16: China Launched Its Yuan-Denominated Fix Price for Gold
CH l NA LAUNCHED ITS YUAN-DENOMINATED FIX PRICE FOR GOLD ON TUESDAY, APRIL 19, WITH GRAM SET AT 256.92 YUAN ($39.69), EQUIVALENT TO $1,234.50 AN OUNCE —_ usfunds.com
Slide 17: Mainland China Official Gold Bullion Imports
usfunds.com Mainland China Official Gold Bullion Imports A price maker is an entity that holds a large amount of power over the price of the goods it buys or sells. A price taker is an entity that must accept prevailing prices in a market, lacking market share to influence price on its own. usfunds.
Slide 18: Central Bank Gold Buying: Deficit to Surplus
usfunds.com Central Bank Gold Buying: Deficit to Surplus usfunds.com June 2016 | 16-196 18
Slide 19: Driver: The Love Trade
usfunds.com Driver: The Love Trade usfunds.com June 2016 | 16-196 19
Slide 20: Gold Historically Follows a Seasonal Pattern
usfunds.com Gold Historically Follows a Seasonal Pattern The seasonal pattern shows historical tendency of when the highest and lowest prices occurred, based on analysis of daily prices collected over the last 5, 15 and 30 years by Moore Research Center, Inc. usfunds.com June 2016 | 16-196 20
Slide 21: Gold's Love Trade
usfunds.com Gold’s Love Trade usfunds.com June 2016 | 16-196 21
Slide 22: 2016 Chinese New Year: Year of the Monkey
usfunds.com 2016 Chinese New Year: Year of the Monkey usfunds.com June 2016 | 16-196 22
Slide 23: China's Middle Class Overtakes the U.S.
109 MILLION. | For the first time, the size of China’s middle class has overtaken the U.S., 109 million compared to 92 million. Source: Credit Suisse, U.S. Global Investors Kre~ iy wa Bb
Slide 24: Did You Know? India Population Under 25
DID YOU KNOW? INDIA HAS ** 600 MILLION PEOPLE UNDER THE AGE OF 25 THAT’S 2 TIMES THE ENTIRE POPULATION ~# OF THE U.S.
Slide 25: Emerging World Holds 49% of Global Population, 24% of GDP
usfunds.com Emerging World Holds 49% of the Global Population, Just 24% of GDP Past performance is no guarantee of future results. usfunds.com June 2016 | 16-196 25
Slide 26: China Surpasses U.S. — GDP Absolute vs. PPP
usfunds.com China Surpasses U.S. — Compare GDP in Absolute Terms vs. GDP on Purchasing Power Parity Valuation usfunds.com June 2016 | 16-196 26
Slide 27: iPhone Rose Gold Edition Preorders
;™ ANNOUNCED IN SEPTEMBER 2015, THE IPHONE’S ROSE GOLD EDITION SOON BECAME APPLE'S MOST POPULAR PREORDER OPTION O REPRESENTING AQ % OF ALL PREORDERS
Slide 28: Middle East
DLE EAST —— s
Slide 29: How do historical and seasonal patterns affect gold?
How do historical and seasonal patterns affect gold?
Slide 30: Gold vs. Gold Miners
usfunds.com Gold vs. Gold Miners usfunds.com June 2016 | 16-196 30
Slide 31: Near-Record Gold ETF Inflows in First Quarter
usfunds.com Near-Record Gold ETF Inflows in First Quarter 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. usfunds.com June 2016 | 16-196 31
Slide 32: Physically-Backed Gold ETF AuM by Region in Tonnes
usfunds.com Physically-Backed Gold ETF AuM by Region in Tonnes Q1’16 vs Q1’16 vs Q1’15 Q1’15 Q2’15 Q3’15 Q4’15 Q1’16 Q1’15 % Tonnage Change Change North 1,068.6 1,044.8 1,012.3 955.9 1,186.9 118.3 11 America Europe 612.0 618.6 583.9 570.2 690.5 78.5 13 Asia 43.3 41.0 42.9 46.0 54.1 10.8 25 Other 40.
Slide 33: Top Physically-Backed Gold ETFs by AuM in Tonnes
usfunds.com Top 10 Physically-Backed Gold ETFs by AuM in Tonnes Holdings as of Q1’16 vs Q1’15 Fund Country End of March % Change 1 SPDR Gold Shares United States 819.3 11 2 iShares Gold Trust United States 186.3 13 3 ZKB Gold ETF Switzerland 137.7 -1 4 ETFS Physical Gold United Kingdom 113.9 2 5 Gol
Slide 34: Indian Gold Bar and Coin Investment
usfunds.com Indian Gold Bar and Coin Investment usfunds.com June 2016 | 16-196 34
Slide 35: Gold Jump and Market Disruption Push India into Steep Discount
usfunds.com Gold Jump and Market Disruption Push India into Steep Discount usfunds.com June 2016 | 16-196 35
Slide 36: Around a Third of Global Government Debt Has Negative Yield
usfunds.com Around a Third of Global Government Debt Has Negative Yield Source: World Gold Council usfunds.com June 2016 | 16-196 36
Slide 37: Top Reported Official Gold Holdings
usfunds.com Top 10 Reported Official Gold Holdings Country Tonnes % of Reserves 1 United States 8,133.5 75% 2 Germany 3,381.0 69% 3 International Monetary Fund 2,814.0 - 4 Italy 2,451.8 68% 5 France 2,435.7 63% 6 China 1,797.5 2% 7 Russia 1,460.4 15% 8 Switzerland 1,040.4 7% 9 Japan 765.2 2% 10 Neth
Slide 38: The Wealth Effect
usfunds.com The Wealth Effect The wealth effect is the premise that when the value of stock portfolios rises due to escalating stock or gold prices, investors feel more comfortable and secure about their wealth, causing them to spend more. Source: Investopedia usfunds.com June 2016 | 16-196 38
Slide 39: Wealth Effect: Chinese and Indian Markets Have Lagged the U.S.
usfunds.com Wealth Effect: Chinese and Indian Markets Have Lagged the U.S. usfunds.com June 2016 | 16-196 39
Slide 40: Gold's Love Trade Has Declined
usfunds.com Gold’s Love Trade Has Declined usfunds.com June 2016 | 16-196 40
Slide 41: Sharp Slowdown in New Mine Start-Ups
usfunds.com Sharp Slowdown in New Mine Start-Ups usfunds.com June 2016 | 16-196 41
Slide 42: Increased Hedging Coupled with Slight Uptick in Mine Production
usfunds.com Increased Hedging Coupled with a Slight Uptick in Mine Production Outweighed a Marginal Decline in Recycling Year-on-year- Quarter-on- Tonnes Q1’15 Q1’16 change quarter change Total Supply 1,081.0 1,134.9 5% 4% Total Mine 717.7 774.0 8% -10% Supply Recycled Gold 363.2 360.9 -1% 53% Sourc
Slide 43: Gold's Rise Viewed by Some Miners as Opportunity to Hedge
usfunds.com Gold’s Rise in the First Quarter Viewed by Some Mining Companies as an Opportunity to Hedge for Tactical Purposes usfunds.com June 2016 | 16-196 43
Slide 44: 7 Reasons Gold is Rising
usfunds.com 7 Reasons Gold is Rising • Unprecedented nominal negative interest rate • Real negative interest rates • Investors losing faith in central bank policy • Central banks are now net buyers of gold • Weakening U.S. dollar • Greater scarcity: Gold production is rolling over • China consuming
Slide 45: Will Gold Follow the Same Pattern This Year As 2002-2003?
usfunds.com Will Gold Follow the Same Pattern This Year As 2002-2003? usfunds.com June 2016 | 16-196 45
Slide 46: Up-Cycles in Gold Price
usfunds.com Up-Cycles in Gold Price Strength of Up- Super Ordinary Ordinary Weak Super ??? Cycle Timing of Sept. 1976 – June 1982 – Mar 1985 – Mar 1993 – Aug 2001- Dec 2015 - Present Down Cycle Nov 1980 Feb 1983 Mar 1988 Feb 1996 Sept 2011 Increase from 666% 70% 71% 27% 606% 22% Trough to Peak Less
Slide 47: Down-Cycles in Gold Price That Followed
usfunds.com Down-Cycles in Gold Price That Followed Strength of Super Average Moderate Moderate Average Down-Cycle Timing of Down Dec 1980 – Mar 1983 – Apr 1988 – Mar 1996 – Sep 2011 – Cycle May 1982 Feb 1985 Apr 1992 July 2001 Dec 2015 Decrease from -65% -43% -33% -35% -44% Peak to Trough Central B
Slide 48: Amplitude of Up-Cycles in Gold Price
usfunds.com Amplitude of Up-Cycles in Gold Price Aug 2001 – Sep 1976 – Jun 1982 – Mar 1985 – Mar 1993 – Dec 2015 - Sep 2011 Nov 1980 Feb 1983 Mar 1988 Feb 1996 Present Low Price (At $111 $297 $288 $328 $268 $1,050 Close of Day) High Price (At $850 $504 $492 $415 $1,892 $1,285 Close of Day) Average P
Slide 49: Amplitude of Down-Cycles in Gold Price
usfunds.com Amplitude of Down-Cycles in Gold Price Recent Average Average Trough Decline % Dec 1980 – Mar 1983 – Apr 1988 – Mar 1996 – Decline % Sep 2011 – of 3 May 1982 Feb 1985 Apr 1992 Jul 2001 of 4 Past Dec 2015 Biggest Downturns Downturns Low Price (At $297 $288 $328 $268 $1,050 Close of Day) H
Slide 50: Cycle Duration in Gold Price
usfunds.com Cycle Duration in Gold Price (Years, Starting with Up-Cycle) Duration of Duration of Sep 1976 – Jun 1982 – Mar 1985 – Mar 1993 – Aug 2001 – 4 Past 3 Major May 1982 Feb 1985 Apr 1992 Jul 2001 Dec 2015 Cycles Cycles Up-Cycle Years 4.2 0.7 3.1 3.7 10.1 2.9 3.6 (Trough to Peak) Down-Cycles (
Slide 51: Poll Question #2
usfunds.com Poll Question #2 What do you think the price of gold will be by year end? usfunds.com June 2016 | 16-196 51
Slide 52: How can gold and gold equities be an integral part of your portfolio?
How can gold and gold equities be an integral part of your portfolio?
Slide 53: Quotes on Owning Gold
“We regard gold as a of sense to own gold.” remains our largest “If you don't own gold, you know neither history nor » economics. currency allocation.” 53
Slide 54: Managing Expectation — Cycles
usfunds.com Managing Expectation — Cycles ANNUAL LIFE CYCLE DAY MONTH PRESIDENTIAL SEASONAL 4-YEAR OF MINE 8-YEAR usfunds.com 54 June 2016 | 16-196
Slide 55: The Periodic Table of Commodity Returns
TheThe Periodic Table Periodic of Commodity Table Returns of Commodity Returns 55
Slide 56: Each Asset Class Has Its Own DNA Volatility
usfunds.com Each Asset Class Has Its Own DNA Volatility Standard deviation based on 10-year daily data as of 3/31/2016 Daily Rolling 1 Year SPDR Gold Shares (GLD) ±1% ±20% Gold Bullion ±1% ±20% NYSE Arca Exchange Gold BUGS Index ±3% ±37% S&P 500 Index (SPX) ±1% ±18% Euro ±1% ±10% Canadian Dollar ±1%
Slide 57: Gold's Heartbeat: Recent Correction Back to the Mean
usfunds.com Gold’s Heartbeat: Gold’s Recent Correction Has Taken It Back to the Mean usfunds.com June 2016 | 16-196 57
Slide 58: Value Drivers for Superior Performance
usfunds.com Value Drivers for Superior Performance usfunds.com June 2016 | 16-196 58
Slide 59: We Believe Royalty Companies Have a Superior Business Model
usfunds.com We Believe Royalty Companies Have a Superior Business Model Royalty companies serve as specialized financiers that help fund miners’ exploration and production projects. In return, they receive either royalties on whatever the mine produces or a “stream,” which is a commitment to an agre
Slide 60: We Believe Royalty Companies Have a Superior Business Model
usfunds.com We Believe Royalty Companies Have a Superior Business Model See Disclosures pages for any holdings in the Gold and Precious Metals Fund or World Precious Minerals Fund. usfunds.com June 2016 | 16-196 60
Slide 61: Unlike royalty companies, producer companies operate mines
Unlike royalty companies, producer companies operate mines. See Disclosures pages for any holdings in the Gold and Precious Metals Fund or World Precious Minerals Fund. 61
Slide 62: See Disclosures pages for any holdings in the Gold and Precious Metals Fund or
62 See Disclosures pages for any holdings in the Gold and Precious Metals Fund or World Precious Minerals Fund.
Slide 63: Top Performing Gold Stocks Year-to-Date
usfunds.com Top 10 Performing Gold Stocks Year-to-Date Company Return YTD as of 6/5/2016 Golden Star Resources Ltd. (GSS) 252.31% Kinross (KGC) 170.88% Yamana Gold (AUY) 164.40% Barrick (ABX) 153.32% Buenaventura (BVN) 149.42% Alamos Gold Inc. 121.33% Newmont (NEM) 94.63% Agnico Eagle (AEM) 90.13% N
Slide 64: Gold Priced in Various World Currencies
usfunds.com Gold Priced in Various World Currencies usfunds.com June 2016 | 16-196 64
Slide 65: U.S. Global Investors Gold Funds Are Outperforming Their Benchmarks
usfunds.com U.S. Global Investors Gold Funds (USERX & UNWPX) Are Outperforming Their Benchmarks usfunds.com June 2016 | 16-196 65
Slide 66: 4 Stars Overall: Gold and Precious Metals Fund (USERX)
usfunds.com 4 Stars Overall Gold and Precious Metals Fund (USERX) usfunds.com 66 June 2016 | 16-196
Slide 67: Recognized by Lipper for Investment Leadership Results in Performance
usfunds.com Recognized by Lipper for Investment Leadership Results in Performance • 4 of the U.S. Global Investors Funds received Lipper performance awards from 2005 to 2008. • 6 of the U.S. Global Investors Funds received certificates from 2000 to 2007 • 2 of the U.S. Global Investors Funds receive
Slide 68: Poll Question #3
usfunds.com Poll Question #3 Do you plan on adding to your gold allocation in the next 12 months? usfunds.com June 2016 | 16-196 68
Slide 69: The World Gold Council
Oss zy COUNCIL Os vec cama! THE WORLD GOLD COUNCIL IS A LEADING AUTHORITY ON,GOLD ANDEIRS-USES Fo AX TR = ~. > p= = * The World Gold Council provides comprehensive analysis of the industry, giving decision makers and stakeholders the information they need to understand the dynamic drivers of the gol
Slide 70: Sharing Gold Insights with CNBC and Bloomberg Television
usfunds.com Sharing Gold Insights with CNBC and Bloomberg Television usfunds.com June 2016 | 16-196 70
Slide 71: Frank Holmes' weekly gold commentary on Kitco News
Are you tuning in? Don’t miss Frank Holmes’ weekly gold commentary on Kitco News with Daniela Cambone! 71
Slide 72: Stay Curious!
Stay Curious! Gold Insights Found on CAPITALIST | A aeeet : ld * " Md Ti ee | MAJ R ee ay GOLD ; that 6 —_ How are Silver and Gold Washington Pee opti ey Bullion Premiums Calculated? ersonal silver to t value. They then sell the n! The steam-powered Mint for manufacturing money for face value, which
Slide 73: Subscribe to our FREE Newsletter
Subscribe to our FREE Newsletter, INVESTOR ALERT Written each week by the investment team with a special commentary by Frank Holmes 73
Slide 74: Frank Holmes' Upcoming Events in 2016
usfunds.com Frank Holmes’ Upcoming Events in 2016 Mines & Money Toronto Oxford Club’s Private Wealth Seminar September 26 Stowe, VT | July 18 - 19 Mining & Investment Latin America 2016 Mines & Money Australia Lima, Peru | October 24 - 25 November 8-10 usfunds.com June 2016 | 16-196 74
Slide 75: Disclosures
usfunds.com 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 www.usfunds.com or by calling 1-800-US-FUNDS (1-800-873-8637). Read it carefully before investing. Foreside Fu
Slide 76: Disclosures
usfunds.com Disclosures Lipper Fund Awards are earned for a fund’s consistent performance over one or more time periods, based on Lipper’s Consistent Return score. Consistent Return is a quantitative metric that incorporates two characteristics: risk-adjusted return, and the strength of the fund's p
Slide 77: Disclosures
usfunds.com Disclosures The S&P 500 Stock Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies. The U.S. Trade Weighted Dollar Index provides a general indication of the international value of the U.S. dollar. Standard deviation is a measure of the
Slide 78: Total Annualized Returns as of 3/31/2016
usfunds.com Total Annualized Returns as of 3/31/2016 Gross Expense Expense One-Year Five-Year Ten-Year Ratio Cap Gold and Precious Metals 24.07% -16.32% -3.02% 2.20% 1.90% Fund (USERX) World Precious Minerals 26.49% -21.56% -6.62% 2.01% 1.90% Fund (UNWPX) FTSE Gold Mines Index 20.65% -17.69% -4.42%
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