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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.

It’s Morning in India: Narendra Modi’s Pro-Business Policies Point to Strong Sectors Growth
May 29, 2014

As some of you might recall, Ronald Reagan’s now-famous 1984 presidential campaign, “Morning in America,” renewed many Americans’ confidence in this country’s financial future. Likewise, the May 16 election of Narendra Modi—whose campaign slogan, “Good times ahead,” taps into the same sense of optimism—couldn’t come at a better time for India and the surrounding region.

Sworn in on Tuesday, Modi’s pro-business, small-government policies have already prompted many citizens of the world to liken him to such transformative leaders as Reagan and Margaret Thatcher. Because he has vowed to widen India’s doors to foreign investment, rehabilitate its crumbling—or, in many regions, nonexistent—infrastructure, deregulate the retail industry and loosen the red tape that has halted domestic coal production, investor confidence in the South Asian country has surged like never before.

For the past six months, foreign investors have bought up more than $16 billion in Indian stocks and bonds in anticipation of Modi’s win and hold approximately 22 percent of Mumbai-listed equities, valued at nearly $280 billion. Since the election, the Indian markets have been bullish, with the rupee crossing 59 levels against the dollar. These activities have made the world’s largest democracy the top performer this year among the four BRIC economies.

“We want more strength for the wellbeing of the country,” Modi said after declaring victory. “I see a glorious and prosperous India.”

Modi has a proven track record of turning economies around.
As head of the state of Gujarat, a position he held prior to being elected prime minister, he oversaw annual economic growth of 10 percent. He is also credited for bringing electricity to all 60.4 million Gujarat residents—a first for India.

One of his loftier goals is to do the same for all 1.2 billion Indians using clean power generation such as wind and solar. Currently, 400 million citizens—more than the combined populations of the U.S. and Canada—are without power. The plan is that by 2019, every home will be able to run at least two light bulbs, a cooker and a television.

Such a colossal undertaking as bringing power to every home will require the import and production of untold amounts of metals such as copper and steel, not to mention the construction and rehabilitation of the nation’s poor infrastructure, which is decades behind China’s.

According to Ajay Piramal, Chairman of the Piramal Group, one of the roads to India’s prosperity is “infrastructure development. Reviving infrastructure projects by streamlining approval and decision-making processes will be critical. By 2019, the structural growth rate of India should be at 8 percent or higher.”

Under the new prime minister’s watch, the growth of industrials and materials is very promising.
India is already the fourth-largest steelmaker in the world, having produced 7.25 million tonnes in March alone. But with the implementation of new infrastructure and energy projects, steel production has the potential to explode.

The same can be said of coal. Even though India, the world’s second-most populous country, is rich in coal, mining has historically been stymied as a result of tortuous bureaucracy and stateism. To facilitate foreign investment in the resource and boost product output, Modi is considering breaking up Coal India Ltd., India’s state-controlled mining company.  

With more jobs up for grabs, more Indians will be able to afford the sort of lifestyle and consumption habits that many Americans enjoy. As I’ve previously discussed, gold is a prime gift to give and receive in India during religious holidays and celebrations. A robust working class will ensure that gold continues its trend as a desired and accessible commodity.

It’s too early to tell if morning has indeed arrived in India. To be sure, the nation faces many challenges that block its path to prosperity, including debilitating bureaucracy, an inefficient agricultural sector, low literacy rate and widespread poverty. But as I often say, government policy is a precursor to change, and with Modi at the helm, “good times ahead” sounds like more than an empty promise. Provided his administration can make good on his many ambitious plans, investment in the energy, industrials, materials and utilities sectors could conceivably see fair returns.

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. None of U.S. Global Investors Funds held any of the securities mentioned in this article as of 3/31/2014.

The Bombay Stock Exchange Sensitive Index (Sensex) is a cap-weighted index.  The selection of the index members has been made on the basis of liquidity, depth, and floating-stock-adjustment depth and industry representation.  Sensex has a base date and value of 100 on 1978-1979.  The index uses free float. The MSCI India Index is a capitalization weighted index that monitors the performance of stocks from the country of India. 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. The MSCI BRIC Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of the following four emerging market country indexes: Brazil, Russia, India and China.

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New Opportunities for an Ancient Culture
May 16, 2014

The latest edition of our Shareholder Report features a striking scene on the front cover—a traditional Chinese junk boat floating calmly in Hong Kong’s Victoria Harbour against the backdrop of a contemporary Chinese cityscape. The contrast between old and new China is an astounding sight, though a closer look at this culture reveals that the same innovation in design, technology and problem-solving attitude is still being used from one century to the next.

During the Han Dynasty, the Chinese had to build a ship that could sail long distances, and in often unsteady waters. About 2,000 years ago, the Chinese developed the hull design and sail plan for the junk boats, allowing these important vessels to operate and sail efficiently.

In 2014, the Asian nation still uses its innovation to deal with present-day challenges, two of which are pollution and traffic congestion, as we see its population growing every day.

In the March Government Work Report, Chinese Premier Li Keqiang declared war on pollution, and we are now witnessing clean energy reforms put in place in an effort to improve air quality. The country is not immune to criticism and concern from around the world, but I think Xian Liang, the co-portfolio manager of our China Region Fund (USCOX), puts it best when it comes to China’s ability to adapt to challenges.

Xian says, “Polluting industries continue to de-rate in performance, but keep in mind that well-managed health care and clean energy companies have outperformed, as they provide solutions to the problem and enjoy favorable policy support.”

China may be facing global growth challenges, but as Xian explains, being selective in the country allows us to avoid weak areas and pursue promising themes, especially those which concentrate on government policies such as the clean energy reforms.

I invite you to explore what’s inside our latest Shareholder Report to see what challenges and opportunities are facing not only China, but other countries and industries in 2014.

 

Explore the Shareholder Report

 

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.

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

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The Good, the Bad and the Opportunity
May 12, 2014

With so many headlines, it can be tough to sort through the market news.The press is demanding the attention of investors more than ever. Whether it was the recent jobs report or last week’s testimony from Janet Yellen, sorting through the market noise is no easy task. Since the world is so interconnected from Facebook to WhatsApp, a spark of news can ignite unfounded fear in an instant. What’s truly significant when it comes to your investments?

Twice a day, in the morning and at lunch, our investment team sits down together to discuss what’s important and what’s immaterial. Last week, in my opinion, the good outweighed the bad. Much of the economic news was a direct result of government policies, both fiscal and monetary. Here are my findings, which I hope will help you filter through the noise.

Government Policies are a Precursor for ChangeWhat are the challenges?
1. As you probably know by now, the Global Purchasing Managers’ Index (PMI) is one of the key metrics we pay attention to as a gauge of the global economy’s strength. In April, the Global PMI fell from 52.1 to 52.0, and though the drop was small, investors who previously were encouraged by a synchronized growth cycle, lost some confidence. Japan’s services and manufacturing PMI readings dropped precipitously. The services PMI plunged to 46.4 in April and the manufacturing PMI fell to 49.4. Both numbers were above the 50 mark in the previous month.

A Setback From Japan's Prime Minister's AbenomicsThe reason for Japan’s slump lies in the consumption tax rate hike, from 5 percent to 8 percent, imposed on the country on April 1. The tax increase was aimed at decreasing the country’s huge public debt, nearly 245 percent of GDP. Just when Japan was finding its economic foothold for recovery, the restrictive fiscal policy caused economic activity to stumble.

Why it matters: The reason for the fall in Global PMI is directly related to Japan’s fall in PMI. Japan has become a drag on global growth. It’s important to recognize the root cause – increased taxes just as monetary stimulus measures were seeing results. This is not good for economic growth and should serve as a cautionary tale for other countries.

Is Japan's Composite Purchasing Managers' Index Dragging Down Global Growth?
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2. Another challenging area of the market is China. China’s manufacturing PMI came in lower at 48.1 in April, contracting for the fourth month in a row, and the country also saw a decline of 0.3 percent in its consumer price index (CPI). Employment in the Asian nation is also at a seven-month low, adding growth concerns for the country.

Why it matters: This negative data means there is potential for fiscal policy easing, allowing the Chinese government to boost the economy in the coming months.

Focus on the strong points.
1. The rate of change of global industrial production (IP) was slowing until the close of 2013. Now, however, the global growth outlook is improving. You can see that an inflection point was hit in mid-2013, reaccelerating IP and coinciding with the global GDP outlook for 2014.

Global Industrial Production is Rising
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Europe is also doing well. The eurozone composite PMI, a good indication of growth, rose to 54.0 in April. In addition, Spain and the U.K. saw increases in GDP in the first quarter and Spanish banks are seeing a decline in bad debts.

Eurozone Composite PMI Sees a Boost
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Why it matters: When global IP moves up, this is a sign that momentum in the global economy has changed – for the better. This is good for commodities such as oil, gas and copper, but also for cyclical areas like energy and industrials. There is no doubt that people in every country want upward mobility for their families, and as the demand for better education, cars, etc. continues, commodities and cyclicals should benefit.

As wages begin to rise, workers have more money to spend, boosting the economy.2. In a recent report, ISI also highlights that minimum wages are going up in the U.S., citing examples of multi-year wage increases for those who had not received pay increases for the last several years. Various groups who received no increase before will now see a 4 percent rise per year, a leading indicator of wage growth trends. Consumer net worth is also expected to rise by $7.1 trillion in the second quarter, taking it to $82.5 trillion.

Why it matters: Real incomes are expected to rise as wage increases outpace inflation. With the uptick in consumer net worth and steady job growth, consumers will feel more comfortable spending.

3. Bank loans have seen an increase of 10.4 percent annualized over the last 14 weeks. As you can see in the chart below, the number of loans continues to increase. According to the Wall Street Journal, one area where bank lending has accelerated is to commercial businesses.

U.S. Bank Loans Continue to Increase in 2014
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Why it matters: This positive trend is a potential inflection point for the economy because it indicates economic acceleration. Not only are banks making it easier to borrow by relaxing lending standards, companies are confident enough about the economy to want more money to grow and invest. The WSJ goes on to say that earnings in April from the six largest banks in the U.S. pointed to an increase in commercial loans of 8.3 percent in the first quarter from last year.

Economic data around the globe continues to remain supportive. Even among challenges, there are opportunities to be found. For example, on Thursday we heard that the European Central Bank is likely to ease interest rates in June. This could be another catalyst for Europe, which is already showing improving economic activity.

Keep Calm and Invest OnSimilarly, China’s inflation is at an 18-month low as of yesterday, which could increase the odds of a policy response, a positive stimulus for the economy. Japan is dealing with the same thing; the country committed to Abenomics and will likely respond with additional policy support to get back on the recovery track. Don’t let negative news overshadow good news and keep in mind that bad news tells you where the opportunities are.

Fund portfolios are actively managed, and holdings may change daily. Holdings are reported as of the most recent quarter-end. The following securities mentioned in the article were held by one or more of U.S. Global Investors Funds as of 03/31/2014: Facebook.

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 may 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 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. 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. The J.P. Morgan Global Purchasing Manager’s Index is an indicator of the economic health of the global manufacturing sector. The PMI index is based on five major indicators: new orders, inventory levels, production, supplier deliveries and the employment environment.

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Albania’s Fertile Grounds for Oil Opportunities
May 5, 2014

Texas is oil country. The state I now call home leads the nation in oil production and would be one of the top oil-producing nations if it were its own country. But that doesn’t stop us from exploring other promising oil opportunities further afield. I recently traveled to Albania to check out a drill site of Petromanas Energy, a Calgary-based international oil and gas company focused on exploration and production throughout Europe and Australia. We own the junior stock in our Global Resources Fund (PSPFX) and Emerging Europe Fund (EUROX).

To many, Albania is an unknown country yet it has a rich and interesting history. It declared independence from the Ottoman Empire in 1912, was conquered by Italy in 1939 and occupied by Germany in 1943. Albania allied itself with the USSR until 1960 and then with China until 1978.  Democratic development has progressed since the country’s first multiparty elections in 1991. The 2009 general elections resulted in the country’s first coalition government and the 2013 election saw a peaceful transition of power. A parliamentary democracy, the country has steadily been welcoming foreign direct investment (FDI) since it shifted away from communism in the early 90s. The recent FDI into the country comes on the back of the extensive development of its rich petroleum resources.

Third Time’s a Charm
This was my third trip to Albania. I last visited the country in 2004 when we were seed investors in another oil play there, Bankers Petroleum. Today Bankers’ Albanian discovery is the largest onshore oilfield in all of Europe. The company is now close to 40 percent of Albania’s FDI and is reinvesting all cash flow back into the country, about $300 million per year. Bankers has done an amazing job cleaning up the environmental disaster left behind by previous operators of the assets which Bankers is developing. Today the fields are green and sheep roam freely. Old and dirty early rigs have been replaced with new safer, cleaner technology.

So much has changed since my last visit.  The country is more prosperous and more verdant. Capital city Tirana’s infrastructure and roads have improved by a quantum leap in the past 10 years. Every morning I ran in Rinia Park, the large central public park, with Marin Katusa of Casey Research. We were impressed with the hundreds of locals jogging at 7 a.m.

Meeting A Man of Many Colors

On this visit I was honored to meet the Prime Minister of the country since 2013, Edi Rama, who also served as the mayor of Tirana from 2000 to 2011. He is a fascinating leader. Rama is a native of Tirana and, in addition to becoming involved with the first democratic movements in Albania, he is an artist and a former basketball player for the Albanian national team. He is, to a large degree, responsible for the vibrancy I saw in Tirana, his Clean and Green project resulting in nearly 100,000 square meters of green land and parks, and his creative efforts to use art and color helping to curb corruption and revive civic pride and responsibility. You’d enjoy watching him explain this dramatic transformation in his TED talk Take Back Your City with Paint. Rama has helped form a stable political environment in Albania, just one reason Petromanas Energy has invested in drill sites here.

Fertile Ground for Oil and Gas
The company’s assets in Albania cover more than 1.1 million gross acres.  In the company’s presentation during our visit, management explained why Albania’s landscape is also key. Petromanas is exploring for large, deep, fractured carbonate structures of Eocene-Cretaceous age, similar to those in southern Italy which are the sites of several prolific oil fields.

Greek 10-Year Government Bond Yields Back to Pre-Crisis Levels
click to enlarge

Located across the country’s Berati thrust belt, you can see the multiple wells in the map below: Papri, Shirag and Molisht. Petromanas is looking for a light oil deposit in these wells. Super major Royal Dutch Shell has invested $200 million to partner in these plays.

While at Petromanas properties, our group saw a few of these wells, but most notable was the visit to the Molisht-1 well that is currently being drilled. As Keith Schaefer points out in his recent Oil and Gas Investments Bulletin on the Albania trip, the Molisht-1 well has the potential to be an 8,000-10,000 barrels of oil production per day well, an absolute company maker. And according to Petromanas’ presentation, the Molisht-1 well could potentially hit earlier than expected, which would be a positive surprise for the company.

What do the founder of Lionsgate Entertainment and a former NATO Commander have in common?


click to enlarge

Petromanas Energy is an example of a company that is currently in a strong area of the market and exhibits robust fundamentals. Its management, research and location are only a few reasons I see great potential for this organization. Escorting us on the research trip were two of the company’s directors, my good friend the legendary Canadian venture capitalist and philanthropist extraordinaire Frank Giustra, and General Wesley Clark, who as the former Supreme Allied Commander Europe, led the charge to stop Serbian forces from committing genocide in Kosovo. I’ve also had the privilege of working alongside these distinguished gentlemen with the International Crisis Group, a non-profit, non-governmental organization committed to preventing and resolving deadly conflict around the world.

The Path from War to Peace and Prosperity in 20 Years

Albanians and their Balkan neighbors have seen more than their share of conflict. The trigger for World War I was the assassination in Sarajevo of Archduke Ferdinand, heir to the throne of Austria-Hungary, by a Yugoslav nationalist in 1914. The Yugoslav Wars fought from 1991 to 1999 on the territory of former Yugoslavia have been described as Europe’s deadliest conflict since World War II and the first since the Great War to be formally judged genocidal. It is estimated at least 130,000 lost their lives.  In the last of these ethnic conflicts, the Kosovo War, a million ethnic Albanians fled or were forcefully driven from Kosovo by Yugoslav troops. Under the command of General Clark, NATO forces bombed Serbian forces to prevent the continued displacement and persecution of the Albanian people.

Prime Minister Rama told us that he is profoundly grateful to the American people, President Clinton, and NATO for saving the lives of at least 900,000 Albanians and ushering in stability and positioning the region for progress. It was a case study in the successful use of force to bring peace to a region and a consequent drive for prosperity for its people. Our collective investment in this humanitarian success story is paying dividends for a new generation of Albanians. The country’s transition to a free market economy has been difficult and there are many economic challenges on the road ahead but the government believes in creating a path favorable for business. Companies such as Bankers Petroleum and Petromanas are helping Albania to develop its natural resources, improve its economy and create growth opportunities for investors who see the potential of this resilient country.

Greek 10-Year Government Bond Yields Back to Pre-Crisis Levels

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.

Past performance does not guarantee future results.

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.

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.

Fund portfolios are actively managed, and holdings may change daily. Holdings are reported as of the most recent quarter-end. Holdings in the Global Resources Fund as a percentage of net assets as of 3/31/14: Bankers Petroleum 0.00%, Petromanas Energy 0.05%, Royal Dutch Shell 0.00%. Holdings in the Emerging Europe Fund as a percentage of net assets as of 3/31/14: Bankers Petroleum 0.00%, Petromanas Energy 0.18%, Royal Dutch Shell 0.00%.

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

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We’re Shuffling the Cards on Our European Play
April 14, 2014

Did you know that over the last year the Greek stock market is up roughly 45 percent? The country that many believed would never recover from a six-year recession is now making astounding strides, recently being added to the MSCI Emerging Markets Index at the end of 2013.

As I’ve witnessed new strength from this “comeback country,” along with a rise in foreign investment into emerging markets as a whole, our investment team is currently strategizing to adapt our game to new European plays. Here are the game changers we see:

We're looking to play our cards right to capture opportunity in the European recovery.Greece Wants Back in the Game
Last week, Greece returned to the international markets with a five-year bond sale, quickly topping $4 billion according to Bloomberg. The yield on these bonds is a little under 5 percent, an attractive number in comparison to other countries’ currency bonds. Greece has been shut out of the bond market for roughly four years now, but I believe the country’s reentry last week is an imminent sign of recovery. 

In the Investor Alert on March 28, we highlighted another indicator of Greece’s recovery. The Greek 10-year bond yields are back down to 2010 levels and the country’s economy is expected to grow by 1.1 percent this year. These conditions have boosted consumer confidence and allowed Greek banks to recapitalize, changing the lending landscape in a credit-starved nation.

Greek 10-Year Government Bond Yields Back to Pre-Crisis Levels
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A recent Reuters’ article discussed the Greek bond sale stating that, “It would not only raise confidence in Greece’s ability to fund itself and aid its recovery, but it also offers Europe the chance to claim its widely-criticized crisis medicine of tough cuts and austerity was necessary, and ultimately successful.”

In fact, last October our Director of Research John Derrick expressed his confidence in the country during a time when most investors wouldn’t offer Greece a second look. He said the country’s current account situation could move from a deficit to a surplus in 2014. As it stands now, several strong economic signs are pointing to John’s positivity on the country, including the fact that Greece hit a surplus before 2014 even began, as you can see in the chart below.

Greece Posts Current Account Surplus in 2013
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One way we are playing these powerful signs within our Emerging Europe Fund (EUROX), is through Greek banks such as Alpha and Piraeus. These banks recently recapitalized, and with the Greek banking industry now consolidated to only four major banks, these names are poised to benefit from the economic recovery.

The Cards Are Stacked Against the Russian Investment Case
I have always believed that government policies are a precursor to change, and witnessing the drama with Putin in the Russian corner of the globe, I think now is a perfect time to shuffle our investment deck and underweight our portfolio to the country. We noticed economic growth in Russia beginning to slow in 2013, with few identifiable, positive catalysts, but the recent geopolitical tension with Ukraine was the final indication of an undesirable shift.

Since the breakout of conflict between Russia and Ukraine, investor confidence has dwindled in the area, and as you can see in the chart below, the two countries directly involved in the clash are the ones showing the highest market-risk impact.

Dramatic Increase in Market Risk in Ukraine
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Towards the end of 2013 I wrote that European equities had seen the longest streak of inflows in over 11 years, as investors began noticing this area of the globe as a spectacular investment opportunity. In addition to many strong areas in developed and emerging Europe, several of these equities were in Russia, and continue to be in Russia. Despite the disorder and our decreased exposure to Russia, we still see resilient stocks with growth opportunities. Two examples of strong Russian names include Norilsk Nickel, a nickel and palladium mining company, along with an Internet company, Mail.Ru.

When it comes to actively managing a portfolio, it’s all about playing your cards right, and at U.S. Global Investors we seek to manage risk while pursuing opportunity for our shareholders.

Turkey’s Turnaround
Greece isn’t the only country returning to the Eurobond market. Last Wednesday, Turkey sold 1 billion euros of nine-year bonds for the first time this year. The bonds, which will mature in 2023, should help the country with financing needs for the remainder of 2014.

Investors showed particular interest in Turkey’s bond issue, but have also started looking to the country as a prime tourist destination. Istanbul, the largest city in Turkey, recently jumped 11 spots to take this year’s No. 1 position on TripAdvisor’s Traveler’s Choice list of global destinations, according to CNN.

Passenger growth in Turkish airports is taking off, seeing year-over-year growth of 15 percent in both international and domestic passengers. Additionally, Turkish Airlines flies to more countries around the world than any other airline! No wonder people love to visit this country. One way we capture this strength for our European fund is through a Turkish airport operator, TAV Airports.

Join me for an investment adventure in Turkey, May 4-17, 2014In fact, I too will be participating in this outstanding growth when I travel to Turkey next month. U.S. Global is inviting all curious investors to take part in this exciting trip as well! I encourage you to read about the opportunities we will be exploring in Turkey straight from the experts.

So inspite of Turkey’s underperformance last year, the country is up 10 percent year-to-date, and over the past decade Turkey’s economy has more than tripled. Consumer confidence is back on track and the long-term, secular growth story remains intact.

Follow the Money
I believe the European recovery is a story worth telling, and within our Emerging Europe Fund (EUROX) we use our investment model to lead us not only to the strong and stable countries in this emerging market, but also to the strong sectors within each country. As Western Europe continues to recover, we believe companies with robust fundamentals in emerging Europe provide leverage to this growth. Explore this opportunity to invest in companies we believe are playing their cards right.

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.

Fund portfolios are actively managed, and holdings may change daily. Holdings are reported as of the most recent quarter-end. Holdings in the Emerging Europe Fund as a percentage of net assets as of 03/31/14: Alpha Bank AE 1.98%, Mail.Ru 0.00%, Norilsk Nickel 0.00%, Piraeus Bank SA 2.34%, TAV Havalimanlari Holdings Inc. 0.75%.

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.

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

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Net Asset Value
as of 11/24/2017

Global Resources Fund PSPFX $6.07 0.10 Gold and Precious Metals Fund USERX $7.39 0.03 World Precious Minerals Fund UNWPX $5.78 0.02 China Region Fund USCOX $11.95 -0.23 Emerging Europe Fund EUROX $7.07 -0.02 All American Equity Fund GBTFX $24.08 0.02 Holmes Macro Trends Fund MEGAX $21.36 No Change Near-Term Tax Free Fund NEARX $2.21 No Change U.S. Government Securities Ultra-Short Bond Fund UGSDX $2.00 No Change