US Global Investors Inc 2026 Q4 Earnings Call

The presenters for today's program are Frank Holmes, U.S. Global Investors' CEO and Chief Investment Officer, Lisa Callicotte, Chief Financial Officer, and myself, Holly Schoenfeldt, Director of Marketing. On slide number 3, some quick disclosures. 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 do not pertain to historical facts are subject to risks and uncertainties that may materially affect actual results. Please refer to our press release and 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. On the next slide. We are always grateful for the continued support of our valued shareholders.

If you would like to receive one of our signature U.S. Global hats featured here, just send your mailing address to info@usfunds.com and we will gladly ship one out to you. All right, on the next slide, I will briefly review the company. U.S. Global Investors is an innovative investment manager with vast experience in global markets and specialized sectors. We use a quantamental strategy to create thematic Smart Beta 2.0 products. The company was originally founded as an investment club, becoming a registered investment advisor in 1968, and has a longstanding history of global investing and launching first-of-their-kind investment products, including the first no-load gold fund. Finally, we are experts in thematic investing, in particular gold and precious metals, natural resources, airlines, and luxury goods, all using a quantamental approach that includes both macro and micro factors. Moving onto the next slide.

We often begin our presentations with this slide, which we refer to as the DNA of volatility, as a reminder that market swings are a normal part of long-term investing. With that in mind, I will now turn it over to our CEO and CIO, Frank Holmes, to walk us through the fiscal year and share his macro outlook for the quarter.

Frank? The DNA of volatility is so important for investors to really appreciate.

Volatility of asset classes are different, and the same thing with individual stocks within a category. The S&P is the biggest benchmark. It is plus or minus 1% daily is a non-event, meaning 70% of the time, that is what happens, and over 10 days is 2%. Bullion is twice that number, and you can see oil has greater volatility. Bitcoin, on a daily basis, it is pretty well the same as oil and gold, but when we start going over 10 days, Bitcoin is more volatile because it is still emerging. The JETS ETF is plus or minus 3%, because oil is their biggest line item besides all these other global issues and trade. You just get this increase in the volatility. So what it tells you, and this explains basically that you should be looking to buy these things.

When they go minus 3% in a day or more, that is usually a better buy, and over 10 days, if they are down 6%, that is even a less risk buy. Selling, same thing on the upside. What is interesting is the NYSE Arca Airline Index, it is greater than JETS when you take a look over 10 days. When I look at GOAU, which relates to gold, we can see that GOAU goes up or down 3% in a day is a non-event, because gold, it tracks gold 95% of the time. It is following gold, which is 2%. A lot of the gold traders and price discovery are actually following bullion and then they will look at four signals, they call them, that they would go and look at an ETF like GOAU. You can see over 10 days, it is really a shocker.

It is plus or minus 9%. If a big bulk of our assets are gold related and airlines related, you can see that it shows up in GROW stock. It makes it really simple. If we are seeing JETS going up over 10 days, 6% or down 6%, and gold stocks going up or down 9%, it shows up in GROW. It is important to understand that relationship. HIVE is just to give you an idea for Bitcoin mining and AI. It is very volatile and it trades off of what is happening with NVIDIA. Because it is more of a micro cap compared to NVIDIA, it has even a greater volatility. Next, please. I want to thank the top institutional shareholders, Gator Capital and Capital Wealth Advisors, and Vanguard, I believe, is in one of their index products.

Thank all those investors and their product for being invested in GROW. Next, please. I own about 24% of the company and 99% of the voting control. This is to be in compliance with SEC rules for investment adviser. That is where you need to have two classes of stock. Next, please. Strategy and tactics. A strategy is really simple. It is about winning. How do you win? How does a product win in a category in the universe of all these ETFs and mutual funds and in the financial realm? We believe that it is create thematic products that are sustainable using our Smart Beta 2.0 strategy, which requires rigorous backtesting of over thousands of hours before you launch a product. In up cycles and down cycles, you have to go more than a decade, and it gives you a real confidence factor.

There is no guarantee that past performance is going to give you a guarantee of future results, but it does give you a way to understand up and down cycles and how weightings and various screens are used to create a thematic basket of stocks. Our mission is to make people feel financially happy and secure that their wealth is consistently growing. It is volatile, as you can see from previously, and that is what we try to educate investors on, and we have won many awards on the education for that. Our strategy also, as a public company, because we believe that we are deeply undervalued, that we buy back the stock using an algorithm on flat and down days. We manage to preserve cash for future growth opportunities and market corrections, and we do make investments.

We make investments that are not directly. We have also in our funds, but we do not buy something that's just for us and not the funds. We always make sure when we go through a compliance mechanism, is it good for the funds to be able to buy? Or if it's not appropriate, then we would turn around and make certain investments. The other part we found in this world has changed a lot with wholesalers and the digital world is the subscriber base and followers. We're continuously doing everything to grow that base because we hold our own webcasts and the followers, it's important for communicating with investors. Then increase our exposure to the Bitcoin ecosystem.

We have bought some of the ETFs that pay monthly dividends, and give you the upside, but at the same time waiting out these corrections that you're getting an attractive dividend. Next please. We have exposure and investments very minor today in HIVE, but we still have an investment in HIVE. The marketing strategy, I think it's important here is what Steve Jobs said, "You can't connect the dots looking forward. You can only connect them looking backwards." So you have to trust the dots will somehow connect in your future by how well you look in the back. Next, please. I want to give you some education on some ICI factors because we still have mutual funds and ETFs, and ETFs are growing faster. But mutual funds are really still a significant portion of the overall assets.

Even though ETFs are growing faster, they're still a big component. When you look at data from the Investment Company Institute, 72 million households own mutual funds, and 52% were headed by someone 35 to 64. But we find our investors are more like the upper end of 64. But where the industry for ICI comes in is that there's many corporations, and you can see that $13.7 trillion in long term mutual fund assets held by defined contribution plans and IRAs representing about 62% of household assets. So mutual funds continue to still have assets. A lot is going into the fund flows, is going from employer sponsored retirement plans. Next, please. But when you're marketed to them, it's very different than ETF. Let me help educate that difference. So ICI Fact Book, the ETF surpassed $13 trillion in assets.

What's really evolved here is that it's predominantly a smaller account that's doing it. Unless you get tax efficiency, monthly paying specialty funds, that give you a return on capital model. They've had some big growth, but I think that the majority is small, it's much more retail, and it's also institutional. What happens is that a lot of institutions will use that to go short, borrow against these positions, and that's a big source of revenue to low cost ETFs. They make additional revenue from lending out those securities. We've seen this in JETS in particular, that when Spirit was going bankrupt, the whole end, there were many institutions who were shorting Spirit, but they would go long JETS to do that pairs trade, and they would borrow from it. So they were making a bet against that particular airlines.

We made a lot of money for the shareholders in JETS from that securities lending. RIAs, which is positive for us, are rotating to real assets, says AdvizorPro. The data is a war in Iran. You have seen a lot of big interest is up 265%, basically of interest in oil patch. Then especially, I see in the oil patch of the refineries, they are making money hand over fist. Natural resources because of China playing games on restricting the supply of rare metals and other minerals, there is a big spend now by the federal government to improve the supply lines. Natural resource as a whole are doing exceptionally well. Commodities are also doing well. We can see the big interest. When it comes to ETFs, it is different factors and social media is the new classroom of financial education.