U.S. Global Investors, Inc. (NASDAQ:GROW) Q2 2024 Earnings Call Transcript February 9, 2024
U.S. Global Investors, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Holly Schoenfeldt: [Call Starts Abruptly] 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 don’t 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-Q 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 accepts no obligation to update them in the future. Moving on to next slide. As always, we would love to offer anyone tuned in today, one of our JETS, GOAU, SEA JETS all you need to do is send us an e-mail with your physical mailing address to [email protected].
Now on to the next slide, I will briefly review our company. U.S. Global Investors is an innovative investment manager with vast experience in global markets and specialized sectors. It was originally founded as an investment club, becoming a registered investment advisor in 1968. The company has a longstanding history of global investing and launching first-of-their-kind investment products, including the first no-load gold fund. We’re also well-known for our expertise in gold and precious metals, natural resources, airlines and luxury goods. Now when we move to the next slide, Slide number 6, this is where I want to hand the presentation over to CEO, Frank Holmes. Frank?
Frank Holmes: Thank you, Holly, and thank you all the shareholders who are listening. This is one of the most important disclaimers I always like because it’s colorful, but it’s factual in a quant world is the DNA of volatility. What’s important here is that, every asset class has its own DNA of volatility and it changes over time. They know well today that, the DNA of the human body can change and external forces, imbalances between macro forces of monetary fiscal policies can all of a sudden impact capital markets and it can change the DNA of the volatility of an asset class. Let’s take a look at the S&P 500. It basically says, it’s a non-event to go up or down 1% almost 70% of the time. Over 10 days is 3%. Yu can see that gold bullion is the same as the S&P 500.
If we go back 10 years ago, bullion was more volatile 2:1 to what the S&P was. On the Dow Jones US Asset Manager Index, it’s got a day daily volatility close to the S&P, but over 10 days, it doubles, basically, the 5%. GROW definitely doubles over 10 days. It’s a non-event, they go up or down 6% on a weekly basis. Some of our funds are known especially for gold and GOAU. You can see that it’s plus or minus 7% over a 10 day period. Those changes in the assets of the airlines or gold, they do have an impact in our funds and this is how we earn fees. We earn fees on basis points on the total assets that we manage and they can change over a monthly basis, a quarterly basis and that’s what changes basically. It’s very simple business to calculate what our revenue is going to be.
Next. Well the ETF world continues to beat down on the mutual fund world. As you can see, the ETF world continues to enjoy more product access and the fund flow is going out of the mutual fund world. It’s interesting that, the younger investors, the millennials and generations x, y, and z are much more keen to go and trade and invest, but predominantly trade an ETF to get exposure to a theme. Next, please. I want to thank our institutional shareholders, Vanguard, Royce Investment Partners, Parrot Capital, KWM and BlackRock. A couple of these other lineups are into index funds, and but still we thank them all for that we qualify and show up in their product lineup. Next, please. As I’m the CEO and Chief Investment Officer, and I’ve been in this saddle for about 35 years.
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