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usfunds.com1.800.US.FUNDS November 2013 13-479
Fifty Shades of Gold
Frank Holmes, CEO and Chief Investment Officer
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Even After a 2 Year Gold Selloff, Investors Are AheadWith 10 Percent Weighting in Our Gold Funds
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The chart illustrates the performance of a hypothetical $10,000 investment made in the funds and strategy during the depicted time frame. Figures includereinvestment of capital gains and dividends, but the performance does not include the effect of any direct fees described in the funds prospectus (e.g.,
short-term trading fees) which, if applicable, would lower your total returns. This hypothetical portfolio is presented for educational and illustrative purposes
only and is not a recommendation to engage in any particular investment strategy. Past performance does not guarantee future results.
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Government Policy Model Precursor for Change
President Barack ObamaBen Bernanke, Chairman
of the Federal Reserve
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Follow the MoneyPresidential Election Cycle
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Government Policy Is a
Precursor to ChangeMarch 2009
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Follow the Money
Equities and Gold Have Outperformed Bonds
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Emerging World Holds 50% of theGlobal Population, Just 23% of GDP
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Compare E7 vs G7 Money Supply GrowthEmerging Worlds Money Supply is Robust
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Its Not the Political Party,Its the Political Policies
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Its Not the Political Party,
Its the Political PoliciesDeclining Value of the U.S. Dollar Since 1970
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Alan Greenspan Ben BernankeRichard Nixon
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The Spotty Track Record of the FederalReserves Economic Projections
Alan Greenspan Ben Bernanke
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Gold Demand Drivers
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Elvis Presley
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Follow the Money
UnprecedentedCash Injections from Central Banks
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Gold Does Not Look Like a Bubble
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Similar PatternsRising U.S. Deficit and Gold Prices
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Warren Buffett vs. Gold
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Warren Buf fett
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Great Roll Over or Rip Off Creates Opportunity
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Massive Liquidation of Financial Gold
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Gold Net Commercial Position Where is the Physical Gold?
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Indian Gold PremiumsSurge to All-Time Highs
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October 25, 2013
Source: www.goldchartsrus.com, U.S. Global Investors
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Indian Premiums and Import Taxes BringEquivalent Gold Price to $1,632 Per Ounce
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October 25, 2013
Source: www.goldchartsrus.com, U.S. Global Investors
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Chinas Rush to BuyGold on Lower Prices
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August 9, 2013
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Follow the Money (Gold) to ChinaChina Consumes Almost 100% of Worlds Gold Mine Production
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China Gold Flows
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Unusual Gold Trading in Futures Market
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Gold ETF ObservationsSelling Declining with Lower Prices
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Silver ETF ObservationsBuying with Lower Prices
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Platinum ETF ObservationsBuying Rises with Lower Prices
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Contrarian
Gold Stocks Poised to Bounce
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Will Gold Follow Its SeasonalPattern This Year?
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September 9, 2013
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10-Year Rolling Average CPISince 1972 is 2.43%
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Manipulation of CPI Calculation?9.38% vs. 1.75% Debate
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f d
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Central Bank Gold Buyingat 50-Year High
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f d
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Will Rising Inflation Rates Drive Gold Higher?
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Gold Would Need to Be Much Higherto Cover U.S. Money Supply
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Driver: The Love Trade
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Holidays Drive Gold Demand
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Gold Love Trade
Strong Correlation Between Rising Incomes and Gold Price
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Chinas PMI Continues to Expand
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August 26, 2013August 2, 2013
March 5, 2013
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Backdrop of Rising Global PMIs
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Chinas Increasing Jewelry Demand
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Chinas Increasing Appetite for Gold
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Value Drivers for Superior Performance
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Exploration Spending HasSkyrocketed Without True Success
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At $9 bi llion/year plus replacementrequirements of 90 Million oz/yeara discovery cost of $100/oz isneeded. This is low.
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+3 Million Ounce Discoveries
Becoming Scarce
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Gold Grades Fall
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Production Has Not Expanded,
Yet Growth of 6 Percent Per Year is Planned
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Source: Gold Fields, U.S. Global Investors
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The Replacement Cost for an Ounce Of Gold is$1500 with $1700 as a Sustainable Number (2012)
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CEOs Replaced as Growth Promise Unfulfil led
Barrick Gold$20 billion spent to grow
Production down 15%Market Capitalization $20 billion
Newmont Mining
$16 billion spent to growProduction down 34%Market Capitalization $14 billion
Kinross Gold
$6.5 billion in writedownslast two yearsMarket Capitalization $6 billion
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Last 10
Years
At least 20 mining CEOs have stepped down in the last year.
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Gold Companies Are Getting Leaner with Write-Downsof $23.1 Billion, which Has Impacted Gold Equity Funds
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Growth in CAPEX Has Been Driven
By Green Field Investment
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Beware of GDX Gold ETFs
Select Stocks Based on Quality Factors
Index-tracking investment metrics frequently are based solelyon market cap and liquidity, subjecting investors to potentiallyunnecessary risks.
Recent stock disasters Lion Gold plunged 42 percent in October 2013 and was
suspended from trading
Red 5 ceased trading last April 2013 after the companycould not replay its loans when a mining facility failed
Great Basin Gold entered bankruptcy in November 2012after raising equity too quickly
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Gold Stocks/Gold Ratio Shows
Gold Stocks Undervalued
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Gold Stocks at Historically
Low Cash Flow Multiples
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Most Gold Stocks Are Yielding
More than 5-Year Government Note
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Past performance is no guarantee of future results.
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Managing Expectations Yearly Volatility
The Math
View the presentation Anticipate Before You Participate atwww.usfunds.com/investor-resources/publications/research
Rolling 1 Year
NYSE Arca Gold
BUGS Index (HUI)36.7%
WTI Crude Oil 34.7%
MSCI Emerging Markets (MXEF) 30.7%
S&P 500 Index (SPX) 17.6%
Gold Bul lion 16.3%
12-month rolling volatility of
price action over 10-year period
Standard Deviation (as of 9/30/13) based on 10-Year Data
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Managing Expectations
Year-over-Year Rolling Oscillator
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G O f
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GROW Performance Past Twelve Months
Correlated with Gold Stocks
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Past performance does not guarantee future results.
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GROW O t f d G ld St k d
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GROW Outperformed Gold Stocks and
Overall Market in Third Quarter 2013
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Past performance does not guarantee future results.
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Fund Performance
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Disclosure
Please consider carefully a funds investment objectives, risks, charges and expenses. For this and otherimportant 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.
Gold, precious metals, and precious minerals funds may be susceptible to adverse economic, political or regulatory developments due toconcentrating 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 Nasdaq Composite Index is a capitalization-weighted index of all Nasdaq National Market and SmallCap stocks. The S&P 500 Stock Index isa widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies. The COMEX is a commodity exchange in New
York City formed by the merger of four past exchanges. The exchange trades futures in sugar, coffee, petroleum, metals and financial
instruments. The NYSE Arca Gold Miners Index is a modified market capitalization weighted index comprised of publicly traded companies
involved primarily in the mining for gold and silver. The index benchmark value was 500.0 at the close of trading on December 20, 2002.
The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance inthe 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 pricesby including companies that do not hedge their gold production beyond 1.5 years. The Purchasing Managers Index is an indicator of the
economic health of the manufacturing sector. The PMI index is based on five major indicators: new orders, inventory levels, production, supplier
deliveries and the employment environment.
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Disclosure
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 Morgan Stanley Commodity Related Index (CRX) is an equal-dollar weighted index of 20 stocks involved in commodity related industriessuch as energy, non-ferrous metals, agriculture, and forest products. The index was developed with a base value of 200 as of March 15, 1996.
The S&P/TSX Venture Composite Index is a broad market indicator for the Canadian venture capital market. The index is market capitalization
weighted and, at its inception, included 531 companies. A quarterly revision process is used to remove companies that comprise less than 0.05%
of the weight of the index, and add companies whose weight, when included, will be greater than 0.05% of the index. The FTSE Gold Mines
Index Series encompasses all gold mining companies that have a sustainable and attributable gold production of at least 300,000 ounces a year,
and that derive 75% or more of their revenue from mined gold. 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. M1 Money Supply includes funds that are readily accessible for spending. M2 Money Supply is a broad measure of
money supply that includes M1 in addition to all time-related deposits, savings deposits, and non-institutional money-market funds. The
Philadelphia Stock Exchange Gold and Silver Index (XAU) is a capitalization-weighted index that includes the leading companies involved in the
mining of gold and silver.
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Disclosures
Investment Objective: The Gold and Precious Metals Fund is an actively managed mutual fund that focuses on gold and precious
metals producing companies. The World Precious Minerals Fund is an actively managed fund that focuses on junior and intermediate
precious metals exploration companies around the world.
The SPDR S&P 500 ETF Trust (SPY) is a passively managed fund that, before expenses, seeks to correspond generally to the priceand yield performance of the S&P 500 Index.
Liquidity: The Gold and Precious Metals Fund and World Precious Minerals Fund can be purchased or sold at a net asset value(NAV) determined at the end of each trading day. The SPDR S&P 500 ETF can be purchased or sold intraday. These purchases and
redemptions may generate brokerage commissions and other charges not reflected in the ETFs published expense ratio.
Safety/Fluctuations of principal/return: Loss of money is a risk of investing in the Gold and Precious Metals Fund, the WorldPrecious Minerals Fund and the SPDR S&P 500 ETF. Shares of the three securities are subject to sudden fluctuations in value. The
SPDR S&P 500 ETF may also be subject to bid-ask premiums or discounts to net asset value (NAV) that could adversely affect a
shareholders actual returns.
Tax features: The Gold and Precious Metals Fund and World Precious Minerals Fund intend to make distributions that may be taxed
as ordinary income or capital gains. Under current federal law, long-term capital gains for individual investors in the fund are taxed at a
maximum rate of 15%.
For the SPDR S&P 500 ETF, long-term capital gain distributions will result from gains on the sale or exchange of capital assets held bythe fund for more than one year. Any long-term capital gains distributions you receive from a fund are taxable as long-term capital gain
regardless of how long you have owned your shares. Long-term capital gains are currently taxed at a maximum of 15%. Information
provided here is neither tax nor legal advice and is general in nature. Federal and state laws and regulations are subject to change.
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