U.S. Global Investors’ Gold-Oriented Funds Earn 5-Star Ratings from Morningstar
January 12, 2017
SAN ANTONIO—January 12, 2017—U.S. Global Investors, Inc. (NASDAQ: GROW), a boutique registered investment advisory firm with longstanding experience in global markets and specialized sectors, is pleased to announce positive recognition for its funds by Morningstar. The Gold and Precious Metals Fund (USERX) has earned a 5-Star Overall Rating by the respected investment ranking and analysis firm, as of December 31, 2016. The fund was rated among 71 Equity Precious Metals funds, based on risk adjusted returns.
The World Precious Minerals Fund (UNWPX) was also honored with a 5-Star rating over the three-year period, and the institutional class of the World Precious Minerals Fund, with the ticker UNWIX, claims a 5-Star rating over the three-year period. Both fund classes were rated among 71 Equity Precious Metals Funds, based on risk-adjusted return, as of December 31, 2016. The company notes that these funds have had periods of both positive and negative performance in recent years, and performance information can be found on the fund website at www.usfunds.com.
The year 2016 was good for gold investing. Gold bullion had its best first half of the year since 1974, when it surged 28 percent for the year through early July 2016, largely driven by low government bond yields in the U.S., U.K., Germany, France, Australia, Japan and elsewhere. The company’s research shows that historically, gold has performed well in low-interest rate environments, and 2016 was no exception. The price of gold bullion finished the year up 8.56 percent, according to data from Bloomberg. This reverses the trend over the previous three years, when gold was negative.
“I am proud of our two gold funds for earning the positive results from Morningstar. As I’ve pointed out to investors before, it’s important to take note of what I call the Fear Trade for gold. We are seeing negative real rates, driven by higher expectations for inflation. To remind readers, real rates come from subtracting inflation from the federal funds rate. As investors look for a hedge against inflation, they look for gold,” notes Frank Holmes, CEO and chief investment officer of U.S. Global Investors.
Gold miners benefited even more than bullion in 2016. The group, as measured by the NYSE Arca Gold Miners Index, finished the year up 55 percent, beating the other asset classes as shown in the chart below.
The Gold and Precious Metals Fund and World Precious Minerals Fund are co-managed by Holmes and Ralph Aldis, who were honored with the Mining Journal’s Best Americas Based Fund Manager award for 2016. Holmes and Aldis were selected as the winners from a finalist group of fund management teams including Gabelli Funds, Dynamic Funds, Rydex Funds and Mackenzie Investments. The award was decided based on fund metrics provided by Morningstar.
“Investors should maintain a 10 percent allocation in gold—5 percent in gold stocks, and 5 percent in gold bullion or jewelry,” Holmes reminds investors of his consistent advice. “Don’t try to time the market; rather, rebalance your portfolio once a year, or quarterly.”
U.S. Global Investors’ municipal bond fund, the Near-Term Tax Free Fund (NEARX), was also honored by Morningstar with a 4-Star Overall rating among 172 Municipal National Short funds, based on risk adjusted returns, as of December 31, 2016.
Since the U.S. presidential election, much attention has been given to the rise in interest rates, particularly due to the Federal Reserve’s first rate hike in a decade. While yields have risen, bond prices have fallen, resulting in negative returns in much of the bond universe. However, municipal bonds have actually outperformed Treasuries since the election, posting a return of negative 3.31 percent compared with negative 3.3 percent for Treasuries, as shown in the chart below.
“President-elect Donald Trump has proposed a spending package as high as $1 trillion over the next 10 years. Part of Trump’s promise to ‘make America great again’ will require the backing of tax-free municipal bonds, which traditionally have been used to finance state and local infrastructure build outs,” says Holmes. “A well-structured, diversified portfolio, one that includes municipal bonds, is a prudent strategy.”
The Gold and Precious Metals Fund is the first no-load gold fund in the U.S. The fund focuses on producers, companies currently pulling gold or other precious minerals out of the ground. The World Precious Minerals Fund gives investors greater exposure to junior and intermediate mining companies for added growth potential. The Near-Term Tax Free Fund invests in municipal bonds with relatively short maturity. The fund seeks to provide tax-free monthly income by investing in debt securities with relatively high credit quality issued by state and local governments from across the country. Readers can learn more about U.S. Global Investors Funds by visiting the company’s website, www.usfunds.com.
About U.S. Global Investors, Inc.
The story of U.S. Global Investors goes back more than 40 years when it began as an investment club. Today, U.S. Global Investors, Inc. (www.usfunds.com) is a registered investment adviser that focuses on niche markets around the world. Headquartered in San Antonio, Texas, the Company provides money management and other services to U.S. Global Investors Funds, the U.S. Global Jets ETF and other international clients.
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 Fund Services, LLC, Distributor. U.S. Global Investors is the investment adviser.
Past performance does not guarantee future results.
Morningstar ratings for the Gold and Precious Metals Fund (USERX), in the Equity Precious Metals fund category: USERX was rated 5 Stars Overall out of 71 funds, 5 Stars out of 71 funds for the three-year period, 5 Stars out of 64 funds for the five-year period, and 4 Stars out of 46 funds for the 10-year period, as of December 31, 2016.
Morningstar ratings for the World Precious Minerals Fund (Investor class UNWPX and Institutional class UNWIX), in the Equity Precious Metals fund category: UNWPX received 3 Stars Overall out of 71 funds, 5 Stars out of 71 funds for the three-year period, 4 Stars out of 64 funds for the five-year period, and 2 stars out of 46 funds for the 10-year period, as of December 31, 2016. UNWIX received 4 Stars Overall out of 71 funds, 5 Stars out of 71 funds for the three-year period, 4 Stars out of 64 funds for the five-year period, and 2 Stars out of 46 funds for the 10-year period, as of December 31, 2016.
Morningstar ratings for the Near-Term Tax Free Fund (NEARX), in the Municipal National Short category: NEARX received 4 Stars Overall out of 172 funds, 4 Stars out of 172 funds for the three-year period, 4 Stars out of 147 funds for the five-year period, and 4 Stars out of 94 funds for the 10-year period, as of December 31, 2016.
Morningstar Ratings are based on risk-adjusted return. The Morningstar Rating for a fund is derived from a weighted-average of the performance figures associated with its three-, five- and ten-year (if applicable) Morningstar Rating metrics. Past performance does not guarantee future results. For each fund with at least a three-year history, Morningstar calculates a Morningstar Ratingä based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund’s monthly performance (including the effects of sales charges, loads, and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. (Each share class is counted as a fraction of one fund within this scale and rated separately, which may cause slight variations in the distribution percentages.)
Gold, precious metals, and precious minerals funds may be susceptible to adverse economic, political or regulatory developments due to concentrating 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.
Bond funds are subject to interest-rate risk; their value declines as interest rates rise. Though the Near-Term Tax Free Fund seeks minimal fluctuations in share price, it is subject to the risk that the credit quality of a portfolio holding could decline, as well as risk related to changes in the economic conditions of a state, region or issuer. These risks could cause the fund’s share price to decline. Tax-exempt income is federal income tax free. A portion of this income may be subject to state and local taxes and at times the alternative minimum tax. The Near-Term Tax Free Fund may invest up to 20% of its assets in securities that pay taxable interest. Income or fund distributions attributable to capital gains are usually subject to both state and federal income taxes.
Diversification does not protect an investor from market risks and does not assure a profit.
All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor.
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 Dow Jones Commodity Index is a broad measure of the commodity futures market that emphasizes diversification and liquidity through a simple, straightforward, equal-weighted approach. 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.