More Sunshine, Less Stormy Weather - usfunds.com · January 2013 12-693 3 “Performance and Results Oriented” Winner of 29 Lipper performance awards, certificates and top rankings

www.usfunds.com 1.800.US.FUNDS January 9, 2013 • 12-693

More Sunshine, Less Stormy Weather Outlook 2013

Frank Holmes, CEO and Chief Investment Officer

John Derrick, CFA

Evan Smith, CFA

Brian Hicks, CFA

www.usfunds.com January 2013 12-693

Focus on Education

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43 MFEA STAR Awards for Excellence in Education

www.usfunds.com January 2013 12-693 3

“Performance and Results Oriented”

Winner of 29 Lipper performance awards, certificates and top rankings since 2000

(Four out of 13 U.S. Global Investors Funds received Lipper performance awards from 2005 to 2008, six out of 13 received certificates from 2000 to 2007,

and two out of 13 received top rankings from 2009 to 2010.)

Investment leadership results in performance


2012 Recap — Stocks & Commodities

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“Follow the Money” — Quantitative Easing Ignites Market Rallies

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Not Just the Fed: There’s Been a Global Easing Cycle

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Implications of Global Easing Policies

  Higher commodity prices   Housing & auto rebound   Fund flows into “risky” assets

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Long Term Bonds Seem Expensive, Overvalued and More Risky than Equities

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“Smart Money” is Buying, so “Follow the Money”

 Goldman Sachs Estimates $200 Billion Flows Into Equities in 2013

 $450 billion from corporations in form of buybacks and mergers & acquisitions but net outflows of $475 billion from retail investors

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“Great Rotation” Back to Equities?

Index Estimated 2013

P/E Estimated 2013 Earned Growth PEG Ratio Dividend Yield

Morgan Stanley Commodity Related

Index (CRX) 11.8 21.8% 0.5 1.8%

MSCI Emerging Markets Index 11.0 15.0% 0.7 2.7%

MICEX Index 5.5 7.1% 0.8 3.8%

S&P 500 Index 13.2 12.4% 1.1 2.2%

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Source: Bloomberg


Are You Underweight?

Energy & Basic Materials

15% of S&P 500

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Government Policy Model — Precursor for Change

President Barack Obama Ben Bernanke, Chairman of the Federal Reserve


Emerging World Holds 50% of the Global Population, Just 22% of GDP


Presidential Election Cycle

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Redemptions by Investors from Equity Funds to Bond Funds Appears Excessive

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“Follow the Money” — Equities and Gold Have Outperformed Bonds

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“Follow the Money”– Gold Price Surged With Increase of U.S. Monetary Base

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“Follow the Money”– Global Liquidity Boom Good for Gold and Emerging Markets

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U.S. Presidential Election Year is Traditionally a Weak Year – XAU Gold Stock Index

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Managing Expectations — But 2013 Should Post Better Comebacks for Gold Stocks?

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Past performance does not guarantee future results.


More Sunshine, Less Stormy Weather


Money Flowing to Asian Emerging Markets

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G7 — Easy Money, Inflation in Check

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Good News — U.S. Businesses and Households Are Deleveraging

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Consumers Conquering Debt

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Equities Remain Attractive Despite Low Bullish Sentiment

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E7/G7 — Emerging Markets Remain Attractive

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E7 — Emerging Market Equities Offer Attractive Valuations

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Reasons for Active Management — Annual Rotation in Leadership

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Reasons for Active Management — Annual Rotation in Leadership

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Reasons for Active Management — Oil and Gas Have Different Seasonal Patterns

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Reasons for Active Management — Copper and Lumber Have Different Seasonal Patterns

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Reasons for Active Management — Gold and Silver Have Different Seasonal Patterns

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Managing Expectations — Yearly Volatility The Math

View the presentation “Anticipate Before You Participate” at www.usfunds.com/investor-resources/publications/research

Rolling 1 Year NYSE Arca Gold BUGS Index (HUI) 35.3%

WTI Crude Oil 35.2%

MSCI Emerging Markets (MXEF) 31.2%

S&P 500 Index (SPX) 18.2%

Gold Bullion 14.0%

12-month rolling volatility of price action over 10 year period

Standard Deviation (as of 12/31/12) based on 10-Year Data


Managing Expectations — Year-over-Year Rolling Oscillator

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Card Counting Allowed Managing Expectations — Anticipate Before You Participate

Measuring Monthly Volatility Number of

+10% Moves Number of

-10% Moves Frequency of ±10% Moves

NYSE Arca Gold BUGS Index (HUI) 490 296 30%

WTI Crude Oil 434 302 29%

MSCI Emerging Markets (MXEF) 139 169 11%

Gold Bullion 130 60 7%

S&P 500 Index (SPX) 33 72 4%

Calculated over rolling 20-trading day periods. Based on approximately 2,550 total occurrences over the past 10 years as of 12/31/2012.


Europe’s Banks Need More Capital — Postponed by Basel III — “Follow the Money”

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“Follow the Money” — Unprecedented Cash Injections from Central Banks

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Bond Flows are Massive Yet Equities Outperform

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Contrarian — Commodities Underowned; Fund Flows Slow

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Balances for Softs, Base Metals and Natural Gas Appear Challenged in 2013, However Weather Can Cause Reversals

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Oil Market to Tighten in Second Half of 2013, Call on OPEC to Rise

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Oil Supply Shut-ins Set to Persist into 2013

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Oil Prices Likely to Remain Volatile

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Fiscal Breakeven Oil Prices for Selected Oil Producer Countries

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Americas to Drive Non-OPEC Oil Supply Growth

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Substantial Opportunity in U.S. Shale Gas Capital Expenditure

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Oil and Gas Well Exploration Increasing Share of U.S. Economy

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U.S. Shale Production Growth Extraordinary

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Eagle Ford Shale, Texas


Refining Support

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Chinese Gasoline Demand Looks Strong

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China


Natural Gas Consumption Increase

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Construction Steel Stocks Experienced Deeper Drawdown in 2012 — Opportunity for Restocking?

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Prices of Spot Iron Ore in China and Shanghai Rebar Futures Have Edged Up on the Back of Better Economic Activity

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China’s Iron Ore De-stocking Setting Up for a Strong Start to 2013

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Improving Copper Consumption in China Should Help Prices

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Chevy Volt


Agriculture Commodities Are Resilient to Economic Slowdown — 7 Billion People

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U.S. Corn Crop Inventories Historically Low

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Fertilizer Critical to Grain Prices

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Ethanol Demand to Remain Stable

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Economics of a U.S. Corn Producer Support Strong Fertilizer Applications for 2013

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Beans in the “Teens”

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Central Banks Remain Net Buyers of Gold

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Uranium Production Not Enough to Meet Long-Term Demand

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Major Price Reversal Good for Employment and Commodity Demand…Collateral Stimulation… Cars, Appliances

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S&P 500 Index and Shanghai Index

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Source: Bloomberg


Price Reversal — China’s PMI and IP

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U.S. Global Investors is Mobile

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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. Distributed by U.S. Global Brokerage, Inc.

Foreign and emerging market investing involves special risks such as currency fluctuation and less public disclosure, as well as economic and political risk. Because the Global Resources Fund concentrates its investments in a specific industry, the fund may be subject to greater risks and fluctuations than a portfolio representing a broader range of industries.

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor.

Although Lipper makes reasonable efforts to ensure the accuracy and reliability of the data contained herein, the accuracy is not guaranteed by Lipper. Users acknowledge that they have not relied upon any warranty, condition, guarantee, or representation made by Lipper. Any use of the data for analyzing, managing, or trading financial instruments is at the user's own risk. This is not an offer to buy or sell securities.

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 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 Morgan Stanley Commodity Related Index (CRX) is an equal-dollar weighted index of 20 stocks involved in commodity related industries such 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 500 Stock Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies. 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.


Disclosures

The EURO STOXX 50 Index provides a Blue-chip representation of supersector leaders in the Eurozone. The index covers 50 stocks from 12 Eurozone countries: Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain. The MICEX Index is the real-time cap-weighted Russian composite index. It comprises the 30 most liquid stocks of Russian largest and most developed companies from 10 main economy sectors. 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. The NAHB Housing Market Index is derived from a monthly survey, and gauges builder perceptions of current single-family home sales and sales expectations for the next six months, as well as rating traffic of prospective buyers. Scores from each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor. The S&P Volatility Index (VIX) shows the market’s 30-day volatility, and is a widely used measure of market risk.

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. 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 Purchasing Manager’s 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. Beta is a measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole.

Holdings in the Global Resources Fund and Global Emerging Markets Fund as a percentage of net assets as of 12/31/2012: iShares Core Total US Bond: 0.00%; Barrick Gold Corp: 0.00%; BHP Billiton Ltd: (Global Resources Fund 2.43%); Newmont Mining Corp: 0.00%; Randgold Resources Ltd: (Global Resources Fund 1.86%); Weyerhauser Co: (Global Resources Fund 2.09%); Whirlpool: 0.00%.

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More Sunshine, Less Stormy Weather - usfunds.com · January 2013 12-693 3 “Performance and Results Oriented” Winner of 29 Lipper performance awards, certificates and top rankings