Share this page with your friends:

Print

Please note: The Frank Talk articles listed below contain historical material. The data provided was current at the time of publication. For current information regarding any of the funds mentioned in these presentations, please visit the appropriate fund performance page.

Investment Insights from a Road Warrior
January 13, 2014

As part of our investment process, we often take the explicit knowledge learned from our statistical models and overlay them with global travel. It’s easy to get swept up in the bullish or bearish analyst reports, so it helps to expand that knowledge with a first-hand observation of local and geopolitical conditions.

Where-Will-Gold-Head-in-2014Over the next few months, I’ll share insights from the road when I travel more than 20,000 miles to five countries across four continents.

The Vancouver Resource Investment Conference will be my first stop. There I’ll be speaking on a panel alongside resources experts Frank Giustra and Ned Goodman. Frank Giustra is the founder of Lionsgate Entertainment, which is one of the largest independent film companies in the world. He also launched Wheaton River, which was acquired by Goldcorp, and Silver Wheaton.

Ned Goodman, founder, president and CEO of Dundee Capital Markets in Toronto, is widely recognized as one of Canada’s most successful investment counselors. He sold DundeeWealth’s asset management unit to the Bank of Nova Scotia back in 2011 and in a Bloomberg News article, he is even “more bullish on gold now than I’ve ever been,” because he believes, “it’s only a matter of time before currencies lose value and inflation rises.”

These two men have been my mentors for years and I’m excited to be able to exchange ideas with them. For all investors, it’s valuable to stay curious and discover how they’ve succeeded in business and life.

After Vancouver, I’ll head north to Whistler, British Columbia to attend CIBC’s Institutional Investor Conference. Next, I’ll thaw out in Los Angeles at a global leadership conference for CEOs, getting ideas and sharing experiences with business leaders.

In February, I’ll fly to Cape Town, South Africa to speak at the 2014 Mining Indaba. This conference brings together national mining ministers and government leaders from all over Africa, as well as hundreds of mining services executives interested in African mining. While on the continent, I plan to visit a few companies that the funds own, kicking the huge tires of mining trucks and getting my boots dirty out in the field.

Then I’ll head to Hong Kong for the Mines and Money conference where I’ll be a keynote speaker and I’ll wrap up my global travels with an “adventure investing” trip to Turkey where investors are invited to come along to explore this dynamic economy that offers great growth potential. If you’d like to learn more about this opportunity, feel free to email us at editor@usfunds.com.

Over the next several months, make sure you are following U.S. Global on Twitter, Facebook or LinkedIn as this resourceful road warrior will be sharing insights on the latest on sentiment and science of resources and world markets.

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. By clicking the links above, you will be directed to third-party websites. U.S. Global Investors does not endorse all information supplied by these websites and is not responsible for their content.

The following securities mentioned were held by one or more of U.S. Global Investors Funds as of 12/31/13: Goldcorp, Silver Wheaton

Share “Investment Insights from a Road Warrior”

2013: Looking Back at the Year of the Bull
December 31, 2013

I’ve often said that trying to stop a bull market has risks. It was certainly precarious to think this year’s run would end anytime soon.

By December 27, the S&P 500 Index climbed an astounding 31.86 percent in 2013. We’re also pleased that shareholders in U.S. Global Investors’ All American Equity Fund (GBTFX) and Holmes Macro Trends Fund were along for the ride and more this year, as both funds outperformed their respective benchmarks. Check out their performance here.

Will stocks continue to climb in 2014? Odds are “very good,” finds BCA Research. According to historical data going back to 1870, there were 30 times when annual returns in domestic stocks climbed more than 25 percent. Of these, 23 experienced an additional increase, resulting in a mean of 12 percent, says BCA.

Thinking back to January 2013, investors had a very different frame of mind. While we recently talked about the year’s biggest stories in U.S. energy and gold, we want recap our popular commentaries focused on the domestic market.

Dow to 14,000 … And Beyond? (February 5, 2013)
After January saw the best month in two decades for U.S. stocks, I wrote how sentiment was slowly improving as many uncertainties had been removed from the market. I gave three reasons to stay positive on equities:

  1. U.S. businesses and households were deleveraging
  2. New home sales were expected to increase
  3. Inflation was low

Read the article.

Dow, Now and Then (March 12, 2013)
It wasn’t long before the Dow was hitting highs, yet with elevated unemployment, dysfunction in Washington and ongoing negative news about the U.S. economy, we noted that investors weren’t celebrating. There were plenty of reasons for that: In an infographic that was retweeted by Jim Cramer, we visually compared the Dow, then and now.

The Dow Then and Now

Don’t Sell in May: Here are Reasons to Extend Your Stay (May 6, 2013)
By the end of April, we noted that formerly weaker areas of the market were gaining strength. From April 24 through May 3, health care, consumer staples, utilities and telecommunications sectors lagged, while energy, industrial and materials stocks were nearly the best performing areas of the market.

This turned out to be a significant inflection point in the market, with cyclical stocks gaining strength over the next several months. Read the article here.

In Recent Days, U.S. Energy, Industrials, Materials Stocks Catch Up
click to enlarge

Don’t Miss This Golden Cross in Resources (November 4, 2013)
While investors were focused on the strengthening U.S. market, we noted improving indicators in other areas, including resources, Europe, and emerging markets. Notably, the global synchronized easing continued to take place along with improving purchasing manager’s index (PMI) number in many countries. Historically these factors bode well for commodities and commodity stocks. Read how you can “count on” PMIs here.

While many of these areas of the market were not as widely popular as U.S. stocks, we believed investors could benefit from being contrarian. Read the article now.

Positive Real Interest Rates Could Be a Headwind for Gold

As we wrap up the year, the benchmark 10-year Treasury note’s yield rose above 3 percent, touching the highest level in more than two years. An increase in bond yields can be both good and bad. According to ISI, a bad increase in bond yields is related to tapering concerns. A good increase in bond yields is related to the economy strengthening. “The two are intertwined, so it’s difficult to know which is dominating. However, judging by the S&P, a Good Increase currently has the upper hand,” says ISI. Our focus on global PMI numbers as early indicators of economic strengthening relates to this view.

The “good increase” in Treasury yields means a return to a positive real interest rate environment which is, historically, a headwind for gold prices.

What do you think will be the biggest stories in the new year? We’d like to know your predictions, questions and resolutions for 2014. Email us at editor@usfunds.com

We wish you a joyous, healthy and prosperous New Year!

Surprise Chart
click to enlarge

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.

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

The S&P 500 Stock Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies. The Dow Jones Industrial Average is a price-weighted average of 30 blue chip stocks that are generally leaders in their industry. 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.

Share “2013: Looking Back at the Year of the Bull”

A Surprising Way to Participate in Today’s Tech Boom
December 23, 2013

If I asked you to name the biggest online shopping day of the year, what would you guess? Black Friday? Cyber Monday? Free Shipping Day in mid-December?

Guess again.

Even though Cyber Monday sales were spectacular this year, as online sales surged 20 percent and beat Black Friday receipts, the day didn’t top November 11, Singles’ Day in China. Singles’ Day is a day of celebration for people who are single and has become popular among the young in China.

China saw so many online purchases on this day that sales exceeded Black Friday and Cyber Monday online purchases in the U.S. In fact, sales on Singles’ Day were nearly double that on Black Friday and Cyber Monday. According to BCA Research, transactions processed through Alibaba totaled $5.75 billion on 11/11. Online sales on Black Friday and Cyber Monday together were only about $3 billion.

Emerging Market Cheap Stocks Cheapeast Since Asian Crisis of 1997-98
click to enlarge

Online transactions have grown so quickly in China over the past few years, the country may have surpassed the U.S. in becoming the largest e-commerce market in the world. The spectacular growth also “defies the widely held consensus of China’s perceived ‘weak’ consumption,” says BCA.

The Asian country has become one of the best consumption stories out there, and looking over the next few years, local technology companies are almost certain to benefit.

So while many U.S. investors are getting excited about the growing number of initial public offerings in the tech sector, they would be remiss if they didn’t look beyond Silicon Valley.

After all, the world has drastically changed since the last tech boom. Back then, China’s share of world GDP growth was in the single digits; now its share is close to 20 percent. Former state-run economies, such as China and Russia, are embracing an entrepreneurial spirit and markets are continuing to open up.

We’re especially excited about the opportunities that will likely develop from China’s removal of the hukou system that determines residency status and urbanization trends. In addition, as China changes its one-child policy, Internet companies may likely see an even larger increase of users in the years ahead.

Do They “Google” in China?
Americans may “Google” for directions, recipes or stock prices, post to Twitter, and shop online at Amazon or eBay, but outside the U.S., different tech leaders are finding lucrative and innovative ways to shape online experiences, grow revenue, and gain market share.

Baidu, for example, is the search engine leader in China with an 81 percent market share, significantly overshadowing Google, which has only a 12 percent revenue share, according to CLSA. The research firm anticipates Baidu will “sustain 35-40 percent revenue growth,” due to its monetization in search advertising, mobile games and mobile videos.

Competition is heating up though. When U.S. Global analyst Xian Liang visited his family in Shanghai this year, he noticed the Internet search page automatically populated to Qihoo (pronounced “chee-hoo”). Qihoo, which has only about 15 to 20 percent traffic share in China right now, bundles its own search engine along with its Internet security software. After installing the anti-virus software, the search engine becomes the default. The company is using this strategy to gain market share against heavy competitors such as Baidu and Google.

When purchasing goods online, most residents of China head to Alibaba, which processes about 80 percent of China’s total online retail businesses. It has a unique model with Amazon- and eBay-like features and hosts sites for small businesses. Its volume of sales is so massive, Alibaba may overtake Wal-Mart as the world’s largest retail network by 2016, according to CNBC.

As an “undisputed market leader,” Alibaba enjoys revenues that are growing 60 to 70 percent year-over-year, says CLSA. Yahoo! has benefited from its 24 percent stake in Alibaba, and next year, investors could get in on the action if the company goes public.

Michael Ding, portfolio manager of the China Region Fund (USCOX), likes Tencent Holdings, whose subsidiaries provide mass media, Internet and phone services, social media and online advertising. According to CLSA, Tencent is “best positioned for mobile,” due to its app called WeChat.

Users of Tencent’s phone applications may not be all too familiar with an app called SnapChat, but they are feverishly downloading a new app called WeChat. WeChat is a mobile social networking application that allows real time multi-party voice messaging and location sharing, boasting 236 million monthly active users.

Tech in Asia reported that Tencent is now set to open a WeChat office in the Philippines, saying that WeChat “became the most downloaded free app” in the country since June.

Emerging Market Cheap Stocks Cheapeast Since Asian Crisis of 1997-98
click to enlarge

Exploring Russia 2.0
Another area of the emerging world benefiting from the growing wealth of the consumer is Russia. In our recent webcast, Tim Steinle, portfolio manager of the Emerging Europe Fund, talked about investing in “Russia 2.0” companies. Whereas familiar Russian companies, such as Gazprom and Lukoil, tend to be large and state-owned, we prefer dynamic, independent, shareholder-driven companies.

For example, Mail.Ru is an Internet company focused on social networks and gaming.  Yandex is the dominant Internet portal in Russia in direct competition with Google.ru, the Russian operation of Google. Both companies have been outstanding performers compared to overall Russian stocks in 2013.

To learn more about why we find Russia 2.0 exciting, you can listen to the on-demand webcast here.

Wishing You a Happy Holiday!
During this holiday season, we would like to wish you and your family peace, joy and lots of laughter. We hope the new year brings you health, wealth and happiness.

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. By investing in a specific geographic region, a regional fund’s returns and share price may be more volatile than those of a less concentrated portfolio. The Emerging Europe Fund invests more than 25% of its investments in companies principally engaged in the oil & gas or banking industries. The risk of concentrating investments in this group of industries will make the fund more susceptible to risk in these industries than funds which do not concentrate their investments in an industry and may make the fund’s performance more volatile.

Holdings in the funds mentioned as a percentage of net assets as of 9/30/13: Amazon 0.0%, Baidu 0.0%, eBay 0.0%, Google 0.0%, Gazprom (Emerging Europe Fund 4.05%), Lukoil (Emerging Europe Fund 4.75%), Mail.Ru (Emerging Europe Fund 2.89%), Qihoo (China Region Fund 3.01%), Tencent (China Region Fund 3.51%), Twitter 0.0%, Wal-Mart 0.0%, Yandex (Emerging Europe Fund 1.95%), Yahoo! 0.0%

Share “A Surprising Way to Participate in Today’s Tech Boom”

Experts Weigh in on What Investors are Missing in Europe
November 27, 2013

A few months ago, our investment team saw meaningful signs that Europe’s economy was improving. Even though many were fixated on U.S. stocks, we were tracking this emerging strength and suggested to investors that they might want to start looking across the Atlantic.

 

Read Is Europe Ready to Take Off?

 

Our team’s intuition was spot on. From the end of July through the end of October, the Stoxx Europe 600 Index increased almost 12 percent, while the S&P 500 only returned 5 percent.

The trend didn’t go entirely unnoticed. Many investors were smart to allocate to Europe. As you can see in the Bank of America Merrill Lynch chart, in recent weeks, European equities have seen the longest streak of inflows in 11 years.

Rolling 10-Week Flows to European Equity Funds
click to enlarge

However, many of these investors may be missing out on what we think are the best European opportunities to come. Take a look at the most recent data on three countries located east of established Europe. Hungary, Poland and Romania have all experienced recovering GDP growth over 2013.

That’s not the only takeaway. These countries are actually recovering faster than expected, as recent actual GDP blew away analysts’ estimates for growth.


click to enlarge

In a recent webcast, our emerging Europe experts, John Derrick, CFA and Tim Steinle, CFA, pointed to three reasons why emerging Europe could gain significantly:

  1. Sentiment on emerging markets is at a low. Fund managers’ holdings of emerging market equities remain at a low that hasn’t been seen since the early 2000s and again in 2009. Given the catalyst driven by the global synchronized recovery, we believe now is the time to be contrarian on emerging markets.
  1. Among emerging countries, valuations for emerging Europe seem exceptionally attractive. See a valuation ranking chart here.

 

  1. With the strong rebound in Europe’s economy taking place now, emerging Europe stands to benefit. Emerging Europe is economically bound to established Europe through export trade and development funding. It should be only a matter of time for companies in the periphery of Europe to catch up to their Western counterparts.

 

Listen to the webcast replay and download the presentation here.

 

U.S. Global Investors’ Emerging Europe Fund (EUROX) is one way investors can participate in this growth. The fund recently hit its “golden cross,” which is a technical sign that indicates when the short-term 50-day moving average crosses above the longer-term 200-day moving average.

The fund’s “golden cross” has historically been a bullish signal. Prior to this latest “crossing,” since 1998, there have only been 12 times that the 50-day has moved above the 200-day moving average. On average, from the cross above to the cross below, the return has been nearly 26 percent and has lasted an average of 312 calendar days.

Rolling 10-Week Flows to European Equity Funds
click to enlarge

 

See the fund’s performance.

 

Don’t miss another day: With the wind at your back, now appears the time to allocate to this area of the world. Learn more about investing in emerging Europe.

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. By investing in a specific geographic region, a regional fund’s returns and share price may be more volatile than those of a less concentrated portfolio. The Emerging Europe Fund invests more than 25 percent of its investments in companies principally engaged in the oil & gas or banking industries. The risk of concentrating investments in this group of industries will make the fund more susceptible to risk in these industries than funds which do not concentrate their investments in an industry and may make the fund’s performance more volatile.

The S&P 500 Stock Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies. The Dow Jones STOXX 600 Index is an index of 600 stocks representing large-, mid- and small-capitalization companies in the developed countries of Europe. All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor.

Share “Experts Weigh in on What Investors are Missing in Europe”

What the End of a Greek Tragedy Means for Investors
October 31, 2013

After six long years, Greece’s economy is finally expected to grow in 2014. GDP expectations of 0.6 percent next year is a remarkable improvement compared to a loss of 4 percent this year. In addition to rising GDP, here are a few other significant changes from Greece lately:

Fiscal Drag Moving Out of Europe
click to enlarge

1. There’s less fiscal drag. According to BCA Research, from 2009 through 2012, the fiscal drag as a percent of Greece’s potential GDP was a considerable -16.4 percent. However, the country’s fiscal situation is expected to be less of a drag over the next few years.

2. The country’s current account situation is improving. Director of Research John Derrick, CFA, talked about Greece on VoiceAmerica last week, explaining that the current account should move from a deficit to a surplus by next year. He thinks it was only a matter of time before the economy naturally corrected itself.

One key reason the current account is improving is because of tourism. According to Reuters, in August alone, the money spent on tourism, which is “the country’s biggest money earner,” climbed about 12 percent on a year-over-year basis. And with the global economy recovering, Americans, Russians, Germans, and Asians have all been eager to soak up the sun on the Greek islands.

3. Greece gaining entry into the MSCI Emerging Markets Index. In November, Greece will be added to the emerging markets index, which means that funds benchmarked to the index will be putting money there.

However, Greece isn’t the only positive story in emerging Europe today. We think investors should look to the east, as Eastern Europe, Russia and Turkey offer meaningful opportunities.

Here are some of the area’s strengths:

  1. Emerging Europe countries offer free flowing currencies, lower taxes, and fewer regulations. They have a more competitive labor force, with lower wages and a more educated staff. All are tremendous advantages for companies located in these countries.
  2. The nations are only at the beginning of their journey to developed status and will likely benefit from a recovery in Western Europe because of their economic ties through establish export trade.
  3. A convergence with developed Europe is also in their future. The integration process in many of these countries is currently underway, with emerging countries in the east working to meet the European Union’s standards that include living standards, GDP, environmental standards, regulatory standards and infrastructure.

Some of these markets are also attractively priced today. According to BCA Research, the valuation ranking of emerging European equities provides these markets with the very vital margin of safety against negative surprises, compared with many other emerging markets.  This suggests that countries including Russia, Hungary, Poland, the Czech Republic and Turkey are poised for a string of outperformance versus other emerging markets.

Central European Markets Are Among the Most Attractive
click to enlarge

Our team believes this string of outperformance is only a matter of time. If you are apt to agree, take a closer look at the Emerging Europe Fund (EUROX).

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. By investing in a specific geographic region, a regional fund’s returns and share price may be more volatile than those of a less concentrated portfolio. The Emerging Europe Fund invests more than 25 percent of its investments in companies principally engaged in the oil & gas or banking industries. The risk of concentrating investments in this group of industries will make the fund more susceptible to risk in these industries than funds which do not concentrate their investments in an industry and may make the fund’s performance more volatile.

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.

Share “What the End of a Greek Tragedy Means for Investors”

Net Asset Value
as of 11/22/2017

Global Resources Fund PSPFX $5.97 0.03 Gold and Precious Metals Fund USERX $7.36 No Change World Precious Minerals Fund UNWPX $5.76 0.03 China Region Fund USCOX $12.18 0.03 Emerging Europe Fund EUROX $7.09 0.04 All American Equity Fund GBTFX $24.06 -0.05 Holmes Macro Trends Fund MEGAX $21.36 -0.06 Near-Term Tax Free Fund NEARX $2.21 -0.01 U.S. Government Securities Ultra-Short Bond Fund UGSDX $2.00 No Change