Our Mutual Funds

The Global Luxury Goods Fund achieved a 6.42% return in the third quarter of 2024, surpassing its benchmark, the S&P 1500 Composite Index, which rose by 6.04%. Additionally, the fund outperformed the S&P Global Luxury Index, which increased by 5.57%. The fund’s strategy closely aligns with the S&P Global Luxury Index, both concentrating on high-end products and services. See the complete fund performance here.

The performance data quoted represents past performance. Past performance does not guarantee future results. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost.

Strengths

• The fund’s performance relative to the S&P 1500 was positively impacted by its exposure to materials, particularly gold producers and royalty companies. According to the fund’s investment strategy, under favorable market conditions, the luxury fund aims to allocate around 10% of its holdings to this sector. Notably, gold prices hit a record high in the third quarter, exceeding $2,600 per ounce.
• The fund’s lack of exposure to the energy sector had the second most positive effect on the fund’s performance relative to the index. The energy sector underperformed, declining nearly 4%, while the S&P 1500 rose by 5.68% during the same period. Consistent with its investment strategy, the fund avoids energy stocks, focusing instead on consumer discretionary companies.
• The strongest contributor to the fund’s performance was Tesla, contributing a positive 1.1% to the fund’s performance. Shares surged by 32% in the third quarter, marking the company’s first quarterly increase in car sales this year, rising 6.4% year-over-year. Tesla is benefiting from the Chinese government doubling incentives for drivers to trade in older vehicles for electric cars and offering promotional financing rates in various global markets.

Weaknesses

• The fund’s stock selection in the consumer discretionary sector had the most negative effect on its performance relative to the S&P 1500. According to its investment objective, the fund allocates assets to luxury apparel, which underperformed the broader market. Shares of Lululemon declined 9.16%, while LVMH shares were up only 0.20%.
• The fund’s overweight position in European auto makers negatively impacted its performance relative to the index. Shares of Volkswagen fell by 6.8%, BMW by 6.7% and Mercedes by 6.4%, none of which are included in the S&P 1500. European car manufacturers are dealing with heightened competition from China and rising production costs.
• The largest detractor from the fund’s performance was Kering, which negatively impacted overall performance by 0.53%. Shares dropped by 21% in the third quarter. Gucci, responsible for about two-thirds of Kering’s operating profits, has been struggling due to its heavy reliance on Chinese customers. Recently, Kering appointed Stefano Cantini as the new chief investment officer, who will work to revitalize the brand.

Outlook

China’s recent stimulus measures boosted consumer morale, especially considering that Chinese consumers account for 30% of global luxury revenue—with two-thirds of that spending occurring within Mainland China and one-third from international travel. However, this initial optimism waned soon after China reopened following the week-long celebration of the Communist Party’s 75th anniversary. The lack of updates on additional stimulus measures and the absence of a clear implementation plan led to a pullback in luxury stock prices.

Looking ahead, luxury and soft retail companies may face further sales declines following a lackluster second-quarter earnings season. Similar to the previous quarter, we anticipate a blend of notable winners and underperformers. We believe U.S. consumers are likely to maintain their spending, while European spending may continue to slow. In China, much of the sector’s outlook will rely on government policies and its willingness to bolster the struggling economy and property market, which could play a critical role in sustaining consumer confidence.

Concerns over slowing growth in the luxury sector put pressure on stock prices during the second quarter. Chinese consumers, who have historically been central to driving sector growth, are now affected by China’s economic headwinds and turbulence in the property market, impacting high-end retail. While challenges in Chinese spending trends are cause for caution, the luxury sector is still expected to grow, albeit at a more moderate pace than in past years. Additionally, a promising trend in global business travel spending, projected to surpass 2019 levels by 2024, offers some optimism, potentially boosting demand for luxury goods associated with travel and hospitality as the sector continues to expand.

The S&P 1500 Composite is a broad-based capitalization-weighted index of 1500 U.S. companies and is comprised of the S&P 400, S&P 500, and the S&P 600. The S&P Global Luxury Index measures the performance of 80 companies engaged in the production, distribution, or provision of luxury goods and services drawn from the S&P Global BMI.

A basis point, or bp, is a common unit of measure for interest rates and other percentages in finance. One basis point is equal to 1/100th of 1%, or 0.01% (0.0001).

Fund portfolios are actively managed, and holdings may change daily. Holdings are reported as of the most recent quarter-end. Holdings in the Global Luxury Goods Fund as a percentage of net assets as of 9/30/2024: Tesla Inc. 4.86%, LVMH Moet Hennessy Louis Vuitton 5.99%, Volkswagen AG 2.44%, Bayerische Motoren Werke AG 1.98%, Kering SA 1.66%.

Standard Disclosure

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.

Stock markets can be volatile and share prices can fluctuate in response to sector-related and other risks as described in the fund prospectus.

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

Top 10 Equity and Debt Holdings as of 09-30-2024

Industry Breakdown as of 09-30-2024

Regional Breakdown as of 09-30-2024

Growth of $10,000 Over 10 Years as of 09/30/2024

The chart illustrates the performance of a hypothetical $10,000 investment made in the fund during the depicted time frame. Figures include reinvestment of capital gains and dividends, but the performance does not include the effect of any direct fees described in the fund’s prospectus (e.g., short-term trading fees) which, if applicable, would lower your total returns.

Month End Average Annual Total Returns as of 10/31/2024

Quarter End Average Annual Total Returns as of 09/30/2024

Expense ratio as stated in the most recent prospectus.

The Adviser of the Global Luxury Goods Fund has contractually limited total fund operating expenses (exclusive of acquired fund fees and expenses of extraordinary expenses, taxes, brokerage commissions and interest, and advisory fee performance adjustments to not exceed 1.75% on an annualized basis through April 30, 2025. Total annual expenses after reimbursement of (0.18%) were 1.87%.

U.S. Global Investors, Inc. can modify or terminate the voluntary limits at any time, which may lower a fund’s yield or return.

Performance data quoted above is historical. Past performance is no guarantee of future results. Results reflect the reinvestment of dividends and other earnings. For a portion of periods, the fund had expense limitations, without which returns would have been lower. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Performance does not include the effect of any direct fees described in the fund’s prospectus which, if applicable, would lower your total returns. Performance quoted for periods of one year or less is cumulative and not annualized. Obtain performance data current to the most recent month-end at www.usfunds.com or 1-800-US-FUNDS. High double-digit returns are attributable, in part, to unusually favorable market conditions and may not be repeated or consistently achieved in the future.

The Gold and Precious Metals Fund returned 18.42% in the third quarter of 2024, outperforming the broad market benchmark, the S&P 500 Index, which returned 5.89%. The fund’s historic benchmark, the FTSE Gold Mines Index, returned 21.97%, against which the fund underperformed due largely to an underweight position in Newmont Corp. and an overweight position in K92 Mining Inc.

The performance data quoted represents past performance. Past performance does not guarantee future results. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost.

While focusing on established, gold-producing companies, the Gold and Precious Metals Fund has a median market capitalization closer to $1.6 billion, compared to the FTSE Gold Mines Index’s median market capitalization of approximately $4.5 billion. In the early stages of gold bull markets, the largest, most established companies have typically seen the strongest price gains. However, as confidence in the cycle grows, capital can often shift toward lower-cap stocks, which may offer better value opportunities. See complete fund performance here.

Strengths

• Catalyst Metals completed its acquisition of Superior Gold, a portfolio position held in 2023. Superior had placed its Plutonic Gold Mine on care and maintenance while optimizing the mine plan. After approximately nine months, operations began ramping up in the second quarter, with the stock gaining 76%. This was followed by an additional 143% gain in the most recent quarter, making it the largest dollar contributor to the fund, adding 200 basis points to the fund’s return.
• The decision not to hold Gold Fields, the fourth-largest member of the FTSE Gold Mines Index, was our second-best contributor to relative performance, as the stock significantly underperformed its peer group. Avoiding Gold Fields was also a top-performing call in the prior quarter. During the most recent quarter, Gold Fields announced a deal to acquire Osisko Mining at a 55% premium in cash while also revising its 2024 guidance downward for the second time, indicating uncertainty in its operations and investments. This decision had a net positive effect of 101 basis points on the fund.
• The third most significant contributor was Aya Gold and Silver. Aya’s operations in Morocco, a mining-friendly jurisdiction, proved advantageous as other African countries, such as Burkina Faso and Mali, posed increased risks to mining companies. Aya spun off its Amizmiz project, generating cash to strengthen core operations while retaining substantial exposure to new growth opportunities.

Weaknesses

• Our investment in K92 Mining was the largest detractor from the fund’s performance in the third quarter, with the stock gaining only 1.55%. The company’s revenue results for the second quarter, reported during the third quarter, fell short of average analyst estimates, impacting the fund by 194 basis points.
• Underweighting Newmont was the second-largest detractor for the quarter. Newmont reported an earnings-per-share (EPS) beat for the second quarter, which attracted nontraditional gold investors and generalists seeking exposure to gold, driving up Newmont’s share price. This decision cost the fund 151 basis points of performance.
• Vox Royalty underperformed its peers, gaining 9.47% compared to the FTSE Gold Mines Index’s return of 21.97%. In the second quarter, Vox Royalty gained 35.05% against the index’s 8.52%, which may explain its relatively softer performance in the third quarter.

Outlook for Gold and Precious Metals

Bank of America (BofA) believes gold could reach $3,000 per ounce in the next 12–18 months, though current flows don’t support that price level just yet. For this target to be achievable, non-commercial demand would need to increase, which BofA suggests could require a Federal Reserve rate cut. Central bank purchases also play a crucial role, especially as many banks seek to reduce the U.S. dollar’s weight in their foreign exchange portfolios, potentially prompting more gold buying. Looking ahead, if the Fed continues preparing for rate cuts, lower yields could draw Western investors back to the gold market, adding momentum to gold’s rally.

Goldman Sachs finds that several factors drive gold demand in China, including low consumer confidence, rising incomes, lower Chinese interest rates and attractive gold prices. Notably, Goldman estimates that a 10% drop in Shanghai gold prices can increase physical demand in China by 16%, highlighting price sensitivity in the region’s market.

The World Gold Council (WGC) reports that, after an initial spike in demand for jewelry and gold bars following a sharp import duty cut, demand in India has since stabilized, yet remains healthy. The WGC observes that purchases previously deferred are now materializing, with increased interest in heavier jewelry pieces. Indian gold ETFs have also seen a surge in investor interest since late July.

The S&P 500 Index, or Standard & Poor’s 500 Index, is a market-capitalization-weighted index of 500 leading publicly traded companies in the U.S. The FTSE Gold Mines Index encompasses all gold mining companies that have a sustainable and attributable gold production of at least 300,000 ounces a year, and that derive 75% or more of their revenue from mined gold.

A basis point is a standard measure for interest rates and other percentages in finance. One basis point equals 1/100th of 1%, or 0.01%.

Fund portfolios are actively managed, and holdings may change daily. Holdings are reported as of the most recent quarter-end. Holdings in the Gold and Precious Metals Fund as a percent of net assets as of 9/30/2024: Newmont Corp. 1.50%, K9 Mining Inc. 7.32%, Catalyst Metals Ltd. 3.18%, Superior Gold Ltd. 0.00%, Gold Fields Ltd. 0.00%, Osisko Mining Inc. 0.00%, Aya Gold & Silver Inc. 7.10%, Vox Royalty Corp. 3.58%.

Standard Disclosure

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.

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

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.

Top 10 Equity Holdings as of 09-30-2024

Industry Breakdown as of 09-30-2024

Regional Breakdown as of 09-30-2024

Growth of $10,000 Over 10 Years as of 09/30/2024

The chart illustrates the performance of a hypothetical $10,000 investment made in the fund during the depicted time frame. Figures include reinvestment of capital gains and dividends, but the performance does not include the effect of any direct fees described in the fund’s prospectus (e.g., short-term trading fees) which, if applicable, would lower your total returns.

Month End Average Annual Total Returns as of 10/31/2024

Quarter End Average Annual Total Returns as of 09/30/2024

Expense ratio as stated in the most recent prospectus.

The Adviser of the Gold & Precious Metals Fund has contractually limited total fund operating expenses (exclusive of acquired fund fees and expenses of, extraordinary expenses, taxes, brokerage commissions and interest, and advisory fee performance adjustments to not exceed 1.75% on an annualized basis through April 30, 2025. Total annual expenses after reimbursement of (0.02%) were 1.46%.

Performance data quoted above is historical. Past performance is no guarantee of future results. Results reflect the reinvestment of dividends and other earnings. For a portion of periods, the fund had expense limitations, without which returns would have been lower. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Performance does not include the effect of any direct fees described in the fund’s prospectus which, if applicable, would lower your total returns. Performance quoted for periods of one year or less is cumulative and not annualized. Obtain performance data current to the most recent month-end at www.usfunds.com or 1-800-US-FUNDS. High double-digit returns are attributable, in part, to unusually favorable market conditions and may not be repeated or consistently achieved in the future.

The World Precious Minerals Fund returned 9.74% in the third quarter of 2024, underperforming its broad market benchmark, the S&P 500 Index, which returned 5.89%. Historically, the fund’s benchmark has been the NYSE Arca Gold Miners Index, which returned 17.25% for the quarter. Our performance lagged behind this index due to an overweight position in TriStar Gold and an underweight position in Newmont Corp.

The performance data quoted represents past performance. Past performance does not guarantee future results. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost.

The S&P/TSX Venture Precious Metals & Minerals Index returned 6.41% for the same period. This index better reflects the fund’s focus on small-cap junior mining companies, though it’s not a perfect match due to its nearly double the volatility of the fund. See complete fund performance here.

Strengths

• Radisson Mining Resources, which owns the high-grade O’Brien Gold Project in Quebec, has been working toward a production decision to monetize the asset. The most significant de-risking event, driving a 78.02% gain for the quarter (or 168 basis points), was Radisson’s announcement of a Memorandum of Understanding with IAMGOLD for a milling solution for the O’Brien ore. This agreement significantly reduces Radisson Mining’s future capital requirements for moving into production.
• Franco-Nevada reported its second-quarter results during the third quarter, showing disappointing royalty revenue with a 21% decrease in revenue and a 20% drop in earnings before interest, taxes, depreciation and amortization (EBITDA), which pushed the share price down by as much as 6% during the quarter. Our tactical decision not to hold Franco-Nevada contributed a net positive effect of 71 basis points to the fund.
• The third most significant contributor was our decision not to hold Gold Fields. During the quarter, Gold Fields announced a deal to acquire Osisko Mining at a 55% premium in cash, while simultaneously revising its 2024 guidance downward, signaling uncertainty in its operations and investments. Avoiding Gold Fields had a net positive effect of 53 basis points on the fund.

Weaknesses

• TriStar Gold was our top performer in the second quarter of 2024, with the stock rallying 69.23% following the announcement of its environmental permit approval. However, post-announcement, the stock drifted down 7.82% in the third quarter, resulting in a 289 basis point loss in performance, primarily due to the position size. Securing the environmental permit has de-risked the project, positioning Tristar as a potential acquisition target for a shovel-ready project in Brazil.
• Nano One Materials was the fund’s second-largest detractor for the quarter, declining by 14.63% due to negative sentiment toward the electric vehicle (EV) industry ahead of the upcoming presidential election. On a positive note, the company received a $12.9 million award from the U.S. Department of Defense to support the expansion of its Candiac facility, North America’s only lithium iron phosphate production site, establishing Nano One as a strategic player in this sector.
• Underweighting Newmont Corporation was the third-largest detractor from performance in the third quarter. Newmont reported an earnings-per-share (EPS) beat for its second-quarter estimates, announced during the third quarter. This earnings report attracted nontraditional gold investors and generalists looking to gain exposure to gold, driving up Newmont’s share price and resulting in a 139-basis point performance cost for the fund.

Outlook for World Precious Minerals

New gold deposit discoveries have sharply declined over the past few decades. From 1990 to 1999, there was an average of 18 discoveries annually. This dropped to 12 per year in the 2000s and further declined to just four per year in the 2010s. Between 2020 and 2023, only five major discoveries have been made, despite increased exploration spending, according to Bank of America. Recently, UBS reported that AngloGold made a firm offer to acquire Centamin for $2.5 billion, primarily in stock with $145 million in cash, representing a 23% premium over Centamin’s prior closing price.

Scotia indicates that more mergers and acquisitions, project divestments, joint ventures and minority investments may emerge within the junior mining sector. The average price-to-net-asset-value (P/NAV) valuation for their gold development universe stands at 0.46x, up from 0.35x last year—a 31% year-over-year increase—yet still at a discount compared to mid-tier producers at 0.65x P/NAV. Rising free cash flow and declining debt could help push valuations higher, past their current near-historic lows. This M&A activity, including Centamin’s acquisition by AngloGold and Osisko’s acquisition by Gold Fields, highlights the appeal for larger developers to grow through established assets rather than riskier explorations. M&A remains a promising growth pathway, especially as higher gold prices make previously marginal projects more economically viable.

Consolidation in the gold sector has predominantly involved senior gold miners acquiring mid-tier, single-asset companies that are already in production, such as Centamin, or close to production, like Osisko Mining. However, larger gold mining companies, facing declining future production profiles, have generally been reluctant to acquire exploration and development companies to expand their mineral inventory. A sustained trend of rising gold prices could eventually compel these companies to reassess their growth strategies and consider acquisitions to enhance their resource base.

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 S&P/TSX Venture Composite Index is a stock market index intended as a broad market indicator for the TSX Venture Exchange, which lists Canadian companies that do not meet the criteria to be listed on the Toronto Stock Exchange. The S&P 500 Index, or Standard & Poor’s 500 Index, is a market-capitalization-weighted index of 500 leading publicly traded companies in the U.S. The P/NAV ratio shows the company’s share price to the net asset (or book) value per share. It shows how much investors are prepared to pay per $1 of net assets. A basis point is a standard measure for interest rates and other percentages in finance. One basis point equals 1/100th of 1%, or 0.01%.

Fund portfolios are actively managed, and holdings may change daily. Holdings are reported as of the most recent quarter-end. Holdings in the World Precious Minerals Fund as a percentage of net assets as of 9/30/2024: Radisson Mining Resources Inc. 4.47%, IAMGOLD Corp. 0.00%, Franco-Nevada Corp. 0.00%, Gold Fields Ltd. 0.00%, Osisko Mining Inc. 0.00%, TriStar Gold Inc. 9.45%, Nano One Materials Corp. 5.23%, Newmont Corp. 0.00%, Anglogold Ashanti Plc 0.00%, Centamin Plc 0.00%.

Standard Disclosure

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.

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

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.

Top 10 Equity and Debt Holdings as of 09-30-2024

Industry Breakdown as of 09-30-2024

Regional Breakdown as of 09-30-2024

Growth of $10,000 Over 10 Years as of 09/30/2024

The chart illustrates the performance of a hypothetical $10,000 investment made in the fund during the depicted time frame. Figures include reinvestment of capital gains and dividends, but the performance does not include the effect of any direct fees described in the fund’s prospectus (e.g., short-term trading fees) which, if applicable, would lower your total returns.

Month End Average Annual Total Returns as of 10/31/2024

Quarter End Average Annual Total Returns as of 09/30/2024

Expense ratios as stated in the most recent prospectus.

The Adviser of the World Precious Minerals Fund has contractually limited total fund operating expenses (exclusive of acquired fund fees and expenses of extraordinary expenses, taxes, brokerage commissions and interest, and advisory fee performance adjustments) to not exceed 1.75% on an annualized basis through April 30, 2025. Total annual expenses after waiver or reimbursement of (0.27%) were 1.47%.

U.S. Global Investors, Inc. can modify or terminate the voluntary limits at any time, which may lower a fund’s yield or return.

Performance data quoted above is historical. Past performance is no guarantee of future results. Results reflect the reinvestment of dividends and other earnings. For a portion of periods, the fund had expense limitations, without which returns would have been lower. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Performance does not include the effect of any direct fees described in the fund’s prospectus which, if applicable, would lower your total returns. Performance quoted for periods of one year or less is cumulative and not annualized. Obtain performance data current to the most recent month-end at www.usfunds.com or 1-800-US-FUNDS. High double-digit returns are attributable, in part, to unusually favorable market conditions and may not be repeated or consistently achieved in the future.

The Global Resources Fund returned 5.05% in the third quarter of 2024, underperforming the benchmark S&P 500 Index, which returned 5.89%. The fund’s historic benchmark has been the S&P Global Natural Resources Index, which returned 3.41%. Our outperformance came primarily from overweight and precious metals and underweight integrated oil. See complete fund performance here.

The performance data quoted represents past performance. Past performance does not guarantee future results. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost.

Strengths

• The three strongest-performing commodities for the quarter were coffee, gold and sugar, which rose by 20.38%, 11.48% and 9.13%, respectively. Rising global demand for instant coffee has driven up robusta bean demand, and when coupled with supply disruptions from major coffee producers like Brazil and Vietnam, coffee prices entered a sharply rising price channel. Gold reached a new all-time high of $2,600 in the third quarter, spurred by interest rate cuts from various central banks, most notably the Federal Reserve. Sugar prices also saw a significant increase after a fire at Brazil’s largest sugar exporter constrained supply.
• The fund’s three best sector calls were an overweight position in precious metals (benefiting from gold’s rally), an underweight position in integrated oil (cautiously positioned due to global supply uncertainty) and strong performance from a selection of listed warrants primarily linked to the precious metals sector. These sector decisions contributed outperformance of 363 basis points, 124 basis points and 112 basis points, respectively.
• The top three dollar-performing stock decisions were overweight positions in Filo Corp., New Gold and Montage Gold, adding 145 basis points, 73 basis points and 64 basis points, respectively. On July 29, Filo received an acquisition announcement from industry giants BHP and Lundin, offering investors a buyout at $33 USD per share by the end of the first quarter in 2025. New Gold reported earnings on July 31, exceeding estimates for both earnings per share and sales, while reaffirming its production targets for the year. Montage Gold’s shares rose in the third quarter following a strategic investment from Zijin Mining and an increased stake from the Lundin Family Trusts, boosting investor confidence in the Koné Gold Project’s potential and Montage’s growth prospects in Côte d’Ivoire. Notably, none of these three significant contributors are members of the S&P Global Natural Resources Index.

Weaknesses

• The three weakest commodities for the quarter were lithium carbonate, West Texas Intermediate (WTI) crude oil and lead, which declined by 25.74%, 13.71% and 5.76%, respectively. Lithium prices fell in the third quarter due to oversupply and lower-than-expected demand for electric vehicle (EV) batteries, prompting major producers like Albemarle and Contemporary Amperex Technology Co. (CATL) to halt production. Crude oil, which began the third quarter at its second-highest level of the year, gradually declined, reaching its lowest price point for 2024 due to weakening demand in China and the U.S., along with ample supply in the market. Lead also declined, initially impacted by the U.S. holding base interest rates at elevated levels. Prices saw a slight recovery after a rate cut near the end of the quarter, although lead had already experienced a drawdown exceeding 14% by then.
• The fund’s worst-performing sectors were its underweight positions in containers & packaging and steel, which trailed the benchmark by 54 basis points and 49 basis points, respectively. With the market experiencing fluctuations throughout the quarter, the fund maintained a slightly higher-than-average cash position, resulting in a 32-basis-point cash drag during the market rally in the last three weeks of September.
• The top three dollar-detractors among stock decisions were Defense Metals Corporation, Methanex and IberAmerican, which detracted 33 basis points, 20 basis points and 19 basis points, respectively. Defense Metals Corp. faced investor uncertainty after a management shakeup, with both the CEO and a director resigning. Methanex saw its shares fall following a $2.05 billion, partially dilutive deal announced on September 9, aimed at expanding its global presence, which investors viewed as dilutive and cash-intensive. IberAmerican’s shares declined after its agreement with Strategic Minerals was terminated due to delays; the company also reported a net loss and a working capital deficit in the second quarter, further dampening investor sentiment.

Outlook for Global Resources

China’s recent economic stimulus measures are expected to have significant ripple effects across the natural resources sector. The People’s Bank of China (PBOC) announced a 50-basis point reduction in the required reserve ratio (RRR) for banks, with further cuts of 25-50 basis points anticipated by year-end. These actions, along with policies to support the housing market and encourage consumer spending—such as lowering down payments for second homes and reducing mortgage rates—are likely to increase demand for materials like steel, cement and copper. Looking ahead, these initiatives are expected to bolster industrial and construction activity, providing a potential boost to commodity markets.

Natural gas and liquefied natural gas (LNG) prices remained notably strong in the third quarter due to tight supply and rising demand. In the U.S., the first weekly summer withdrawal of natural gas stockpiles since 2016 underscored the fuel’s growing importance for cooling during hotter months. European gas prices also rose, driven by concerns over potential Russian supply disruptions and a decline in LNG imports. As the Northern Hemisphere approaches winter, JP Morgan anticipates continued strength in LNG prices, with high spot prices likely to persist until new supply capacity comes online.

Copper prices saw gains, supported by ongoing supply constraints highlighted by Freeport’s CEO, Kathleen Quirk. With the long lead times needed to establish new mines, copper supply is expected to remain tight, potentially pushing prices higher if demand surges. The rising focus on green energy and electrification is expected to fuel copper demand in the coming years, but ongoing supply challenges may continue to drive price increases.

Oil prices weakened over the quarter, despite a stronger-than-expected rise in U.S. crude production. Output reached 13.25 million barrels per day, the highest in four months, supported by increased shale production and offshore activity in the Gulf of Mexico. With robust supply and moderating global demand, oil prices may face continued short-term downward pressure. However, geopolitical risks and potential actions from OPEC+ could introduce volatility. Looking forward, the oil market may stabilize, though substantial production increases are unlikely without further investment.

Microsoft’s recent partnership with Constellation Energy to revive nuclear power at the Crane Clean Energy Center reflects a growing trend among tech giants to adopt carbon-free energy sources for their data centers. This shift coincides with a resurgence in the nuclear industry, driven by corporate demand and the development of advanced reactors. According to the World Nuclear Association, third-generation reactors were first ordered in 2004 for Finland, with similar projects underway in France and the U.S. However, the most significant nuclear expansion is occurring in Asia, particularly in China, where over 100 large reactors, including Western designs and local adaptations, are in development for completion by 2030. As tech companies face increasing energy demands, this trend toward nuclear power is expected to accelerate, offering a reliable and sustainable energy solution.

The S&P Global Natural Resources Index includes 90 of the largest publicly traded companies in natural resources and commodities businesses that meet specific investability requirements, offering investors diversified, liquid and investable equity exposure across 3 primary commodity-related sectors: Agribusiness, Energy, and Metals & Mining.

A basis point is a standard measure for interest rates and other percentages in finance. One basis point equals 1/100th of 1%, or 0.01%.

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 9/30/2024: Filo Corp. 2.42%, New Gold Inc. 1.72%, Montage Gold Corp. 2.02%, BHP Group Ltd. 0.52%, Zijin Mining Group Co. 0.00%, Lundin Gold Inc. 0.00%, Albemarle Corporation 0.00%, Contemporary Amperex Technology Co. 0.00%, Defense Metals Corp. 0.19%, Methanex Corp. 0.89%, IberAmerican Lithium Corp. 0.13%, Strategic Minerals PLC 0.00%, Freeport-McMoRan Inc. 0.00%, Microsoft Corp. 0.00%, Constellation Energy Corp. 0.00%,

Standard Disclosure

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.

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

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 specific industries, the fund may be subject to greater risks and fluctuations than a portfolio representing a broader range of industries.

Top 10 Equity and Debt Holdings as of 09-30-2024

Industry Breakdown as of 09-30-2024

Regional Breakdown as of 09-30-2024

Growth of $10,000 Over 10 Years as of 09/30/2024

The chart illustrates the performance of a hypothetical $10,000 investment made in the fund during the depicted time frame. Figures include reinvestment of capital gains and dividends, but the performance does not include the effect of any direct fees described in the fund’s prospectus (e.g., short-term trading fees) which, if applicable, would lower your total returns.

Month End Average Annual Total Returns as of 10/31/2024

Quarter End Average Annual Total Returns as of 09/30/2024

Expense ratios as stated in the most recent prospectus.

The Adviser of the Global Resources Fund has contractually limited total fund operating expenses (exclusive of acquired fund fees and expenses of extraordinary expenses, taxes, brokerage commissions and interest, and advisory fee performance adjustments) to not exceed 1.75%. Total annual expenses after reimbursement of (0.22%) were 1.47%.

Performance data quoted above is historical. Past performance is no guarantee of future results. Results reflect the reinvestment of dividends and other earnings. For a portion of periods, the fund had expense limitations, without which returns would have been lower. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Performance does not include the effect of any direct fees described in the fund’s prospectus which, if applicable, would lower your total returns. Performance quoted for periods of one year or less is cumulative and not annualized. Obtain performance data current to the most recent month-end at www.usfunds.com or 1-800-US-FUNDS. High double-digit returns are attributable, in part, to unusually favorable market conditions and may not be repeated or consistently achieved in the future.

The Near-Term Tax-Free Fund returned 1.60% in the third quarter of 2024, underperforming its benchmark, the Bloomberg Barclays Municipal Bond Index, which returned 2.71%. Compared to the Bloomberg 3-Year Municipal Bond Index, which more closely aligns with the fund’s maturity target and returned 2.39%, NEARX underperformed by 79 basis points. This underperformance is likely due to our fund’s shorter duration, as the decline in longer-term rates provided a greater return for the benchmark.

At the start of the quarter, the fund’s duration was 1.3 years, and by the end, it was adjusted to two years, funded by proceeds from maturing issues during the quarter. In contrast, the Bloomberg 3-Year Municipal Bond Index has a duration of three years. The fund holds overweight positions in Texas, Minnesota and New Mexico, while maintaining significant underweights in California, New York and Maryland. See complete fund performance here.

The performance data quoted represents past performance. Past performance does not guarantee future results. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost.

Strengths

• Our allocation to bonds from Texas, Pennsylvania and Minnesota made the biggest contribution to the fund’s return as we overweighted Texas, Minnesota and New Mexico credits.
• The fund benefited from its allocation to overweight general obligation, school districts and general notes.
• Our shorter duration of about two years has offered higher current income relative to its benchmark.

Weaknesses

• Our allocation to bonds from South Dakota, Delaware and Mississippi underperformed other states, but they are not significant in the fund or benchmarks.
• The fund’s exposure to multi-family housing, airports and utility bonds contributed the least to our returns, but they are not significant in the fund or benchmarks.
• Our shorter duration of about two years did not offer as much price appreciation from expectations of falling yields, particularly in September when the Federal Reserve surprised with the jumbo 50 basis point cut.

Current Outlook

The Federal Reserve cut its base rate by 50 basis points in the third quarter of 2024. This move was widely anticipated by investors throughout the first half of the year, with market polls at one point indicating a 90% likelihood of a rate cut in the second quarter. As a result, new municipal bond issuances along the municipal yield curve did not experience as steep of a yield adjustment as might have been expected.

In a lower interest rate environment, municipal bonds can become more appealing compared to other fixed-income investments. If the Fed continues to lower or hold rates steady to support economic growth, yields on new municipal bond issues could remain relatively attractive, driving increased demand. Additionally, lower interest rates tend to push up prices for existing bonds.

Local governments are incentivized by these lower interest rates to stimulate economic activity through cheaper financing for capital projects. For investors, this financing offers an appealing opportunity to support critical infrastructure while benefiting from stable, tax-efficient yields. New projects undertaken by municipalities can also improve the credit quality of municipal issuers, potentially enhancing the appeal of older bonds.

Within the NEARX fund, we remain committed to purchasing high-quality credits backed by fiscally conservative municipalities. In this environment, every basis point matters, so we will continue to negotiate diligently to secure the best available yields, staying true to our investment philosophy.

A basis point or bp is equivalent to 1/100 of a percent. The Bloomberg Barclays Municipal Bond Index is a market-value-weighted, rules-based index that measures the performance of the long-term, tax-exempt bond market in the U.S. The Bloomberg Barclays 3-Year Municipal Bond Index is a total return benchmark designed for short-term municipal assets. The index includes bonds with a minimum credit rating BAA3, are issued as part of a deal of at least $50 million, have an amount outstanding of at least $5 million and have a maturity of 2 to 4 years.

Standard Disclosure

Please consider carefully a fund’s investment objectives, risks, charges and expenses. For this and other important information, obtain a fund prospectus 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.

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

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.

Top 10 Holdings as of 09-30-2024

Industry Breakdown as of 09-30-2024

Top 5 States as of 09-30-2024

Growth of $10,000 Over 10 Years as of 09/30/2024

The chart illustrates the performance of a hypothetical $10,000 investment made in the fund during the depicted time frame. Figures include reinvestment of capital gains and dividends, but the performance does not include the effect of any direct fees described in the fund’s prospectus (e.g., short-term trading fees) which, if applicable, would lower your total returns.

Month End Average Annual Total Returns as of 10/31/2024

Quarter End Average Annual Total Returns as of 09/30/2024

Expense ratios as stated in the most recent prospectus.

The Adviser of the Near-Term Tax Free Fund has contractually limited the total fund operating expenses (exclusive of acquired fund fees and expenses extraordinary expenses, taxes, brokerage commissions and interest) to not exceed 0.45% on an annualized basis through April 30, 2025. Total annual expenses after the waiver of (0.84%) were 0.45%. The fund’s yield calculation is based on the holdings’ yield to maturity for prior 30 days; distribution may differ.

Performance data quoted above is historical. Past performance is no guarantee of future results. Results reflect the reinvestment of dividends and other earnings. For a portion of periods, the fund had expense limitations, without which returns would have been lower. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Performance does not include the effect of any direct fees described in the fund’s prospectus which, if applicable, would lower your total returns. Performance quoted for periods of one year or less is cumulative and not annualized. Obtain performance data current to the most recent month-end at www.usfunds.com or 1-800-US-FUNDS. High double-digit returns are attributable, in part, to unusually favorable market conditions and may not be repeated or consistently achieved in the future.

The U.S. Government Securities Ultra-Short Bond Fund returned 1.56% in the third quarter of 2024, underperforming its benchmark, the Bloomberg Barclays U.S. Aggregate Bond Index, which is a broad market index that returned 5.20%. The closest benchmark for the fund’s maturity target is the Bloomberg Barclays U.S. Treasury Bills 6-9 Months Total Return Index, which returned 1.63%. Our fund trailed this index by 7 basis points, likely due to expense drag.

The fund’s duration is 0.58 years, slightly longer than the 0.52-year duration of the U.S. Treasury Bills 6-9 Months Total Return Index. In terms of maturity structure, 100% of the U.S. Treasury Bills 6-9 Months Total Return Index matures in under one year, while our fund allocates 85% to maturities of less than one year and 15% to maturities between one and three years. See complete fund performance here.

The performance data quoted represents past performance. Past performance does not guarantee future results. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost.

Current Outlook

The Federal Reserve cut its base rate by 50 basis points in the third quarter of 2024. This move was anticipated by investors for much of the year, with market polls at one point showing a 90% expectation for a rate cut in the second quarter. Due to this anticipation, Treasuries were less impacted in the short term following the cut. The 12-month and 2-year Treasury yields declined by 74 and 61 basis points, respectively.

The yield curve, which shows interest rates for bonds of various maturities, has finally returned to a normal, upward slope after experiencing the longest yield curve inversion on record. This reversion surprised many, as an inverted yield curve has traditionally been seen as a sign of an impending recession. Moving forward, as the Fed continues to address inflation through monetary policy tools like rate cuts, the yield curve will be an essential indicator of potential shifts in interest rate trends.

The Fed’s interest rate cut signals its confidence in having made progress against inflation. The PCE (Personal Consumption Expenditure) Index, the Fed’s preferred inflation gauge, stabilized around 2.68% in the third quarter, down from 3.01% at the start of the year. This trend toward lower inflation supported the Fed’s decision to cut rates, which in turn helped normalize the yield curve, boosting the outlook for Treasuries.

The upcoming presidential race, however, could introduce new inflationary pressures and influence interest rates. Policies such as tariff increases and restrictions on lower-cost immigrant labor may drive inflation higher. Additionally, political uncertainty could deter new investments or stall existing projects if they face scrutiny from a new administration with differing priorities.

A basis point or bp is equivalent to 1/100 of a percent. The Bloomberg Barclays U.S. Aggregate Bond Index (U.S. Agg) is a benchmark that tracks the performance of the U.S. investment grade bond market. The Bloomberg Barclays U.S. Treasury Bills 6-9 Months Total Return Index tracks the performance of U.S. Treasury Bills with a maturity of six to nine months.

Standard Disclosure

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.

Bond funds are subject to interest-rate risk; their value declines as interest rates rise. Personal consumption expenditures (PCE) is the value of goods and services purchased by or on behalf of US residents. It’s the primary measure of consumer spending in the U.S. economy and can include expenditures on food, electricity, rent, phone bills, and more.

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

Issuer Breakdown as of 09-30-2024

U.S. Government Securities Ultra-Short Bond Fund
Growth of $10,000 Over 10 Years as of 09/30/2024

The chart illustrates the performance of a hypothetical $10,000 investment made in the fund during the depicted time frame. Figures include reinvestment of capital gains and dividends, but the performance does not include the effect of any direct fees described in the fund’s prospectus (e.g., short-term trading fees) which, if applicable, would lower your total returns.

Month End Average Annual Total Returns as of 10/31/2024

Quarter End Average Annual Total Returns as of 09/30/2024

Expense ratios as stated in the most recent prospectus.

The Adviser of the U.S. Government Securities Ultra-Short Bond Fund has voluntarily limited total fund operating expenses (exclusive of acquired fund fees and expenses, extraordinary expenses, taxes, brokerage commissions and interest) to not exceed 0.45%. With the voluntary expense waiver amount of (0.72%), total annual expenses after reimbursement were 0.45%. U.S. Global Investors, Inc. can modify or terminate the voluntary limit at any time, which may lower a fund’s yield or return. The fund’s yield calculation is based on the holdings’ yield to maturity for prior 30 days; distribution may differ.

U.S. Global Investors, Inc. can modify or terminate the voluntary limits at any time, which may lower a fund’s yield or return.

Performance data quoted above is historical. Past performance is no guarantee of future results. Results reflect the reinvestment of dividends and other earnings. For a portion of periods, the fund had expense limitations, without which returns would have been lower. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Performance does not include the effect of any direct fees described in the fund’s prospectus which, if applicable, would lower your total returns. Performance quoted for periods of one year or less is cumulative and not annualized. Obtain performance data current to the most recent month-end at www.usfunds.com or 1-800-US-FUNDS. High double-digit returns are attributable, in part, to unusually favorable market conditions and may not be repeated or consistently achieved in the future.