U.S. Global Investors Announces the Continuation of Monthly GROW Dividends and Expanding Margins with Rising Total Assets Now Over $2.2 Billion

September 24, 2020

SAN ANTONIO–September 23, 2020–U.S. Global Investors, Inc. (NASDAQ: GROW) (the “Company”), a boutique registered investment advisory firm with longstanding experience in global markets and specialized sectors, is happy to announce it will continue its payment of a monthly dividend for the second fiscal quarter of 2021. The Company has paid a monthly dividend since June 2007.

The Company is also pleased to announce operating margin expansion for the quarter ending September 30, 2020. As of June 30, 2020, the Company’s assets under management (AUM) were $1.7 billion, a more than threefold increase from a year earlier. Correspondingly, total operating revenue has risen above the average revenue from the previous four quarters, reflecting the momentum in new fund flows. Quarter-over-quarter and year-over-year results are positive in both top and bottom-line growth. Assets have continued to grow in July, August and September, and are currently over $2.2 billion. The increase in AUM is being primarily driven by the Company’s U.S. Global Jets ETF (JETS).

“We have accomplished several milestones in 2020, including our smart-beta 2.0 airlines ETF, JETS, breaking above $1 billion and our smart-beta 2.0 gold mining ETF, the U.S. Global GO Gold and Precious Metal Miners ETF (GOAU), surpassing $100 million in net assets for the first time ever. Our ETFs have continued to grow, and JETS is now over $1.6 billion and GOAU is over $119 million as of September 21. We spent thousands of hours building and backtesting the dynamic structure and factors for picking stocks in both ETFs, and we’re very pleased that they’ve performed exactly as we designed them to. Operating income margins are now expanding to about 30 percent as assets have risen and marketing has become a smaller portion of costs as a percentage of revenue,” says Frank Holmes, The Company’s CEO and chief investment officer. “Rockets require massive amounts of fuel to break free of the earth’s gravity, and likewise, we’ve spent a lot of money in marketing to get JETS and GOAU to these levels.”

The Company pays all expenses of the ETFs, and an estimation of revenue based on AUM can be seen in the table below.

ETF Assests Under Management ETF Expense Ratio Advisor ETF Revenue
$100 Million 60 Basis Points $600,000
$500 Million 60 Basis Points $3 Million
$2 Billion 60 Basis Points $12 Million

“As we noted in our fiscal year-end webcast on September 10, due to accomplishing these milestones, we expect revenues to increase due to the increase in AUM,” continued Mr. Holmes.  “Although we also expect expenses to increase, we do not expect them to grow at the same rate as revenue, thus resulting in an expected expansion of operating income margin. We are pleased with the continued growth in our funds and are excited about the benefit that this expected operating margin expansion will have for the Company.”

Marketing Uses A.I. to Better Target and Brand ETFs

“The Company has changed its digital marketing and branding strategy with short educational videos and by using artificial intelligence (AI) to expand our brand name as one of the go-to asset management firm for the airline industry,” Mr. Holmes added. “Marketing has strategically positioned the unique JETS story for the past five years by consistently hosting over 20 educational webinars for both retail investors and registered investment advisors (RIAs). The strategy has been paying off with fund flows.”

New Data Sets to Track Passengers Flying

The Investment team at U.S. Global Investors closely tracks data provided by the Transportation Security Administration (TSA) of the daily number of passengers cleared to fly in the U.S. Based on this data, the team believes air travel continues to recover following pandemic-related lockdown measures. The number of travelers during Labor Day hit 935,308, a post-pandemic high and a sharp increase from the low of 87,534 on April 14 date. An increase in air travel could lead to a recovery in airline stocks, boosting the performance of the JETS ETF.

GROW Continues Monthly Dividends

The Company’s board of directors approved payment of the $0.0025 per share per month dividend beginning in October 2020 and continuing through December 2020. The record dates are October 12, November 16 and December 14, and the payment dates will be October 26, November 30 and December 28.

At the September 21, 2020, closing price of $2.61, the $0.0025 monthly dividend equals a 1.15 percent yield on an annualized basis.

The continuation of future cash dividends will be determined by the Company’s board of directors, at its sole discretion, after review of the Company's financial performance and other factors, and is dependent on earnings, operations, capital requirements, general financial condition of the Company and general business conditions.

The Company has paid a monthly dividend since June 2007 and management continues to buy back stock. We invite you to stay tuned for the announcement of the date in November for the next earnings webcast for the quarter ended September 30.

About U.S. Global Investors, Inc.

The story of U.S. Global Investors goes back more than 50 years when it began as an investment club. Today, U.S. Global Investors, Inc. (www.usfunds.com) is a registered investment adviser that focuses on niche markets around the world. Headquartered in San Antonio, Texas, the Company provides money management and other services to U.S. Global Investors Funds and U.S. Global ETFs.

Forward-Looking Statements and Disclosure

This news release and other statements by U.S. Global Investors may include certain “forward-looking statements,” including statements relating to revenues, expenses and expectations regarding market conditions. You can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “opportunity,” “seeks,” “anticipates” or other comparable words. Such statements involve certain risks and uncertainties and should be read with corporate filings and other important information on the Company’s website, www.usfunds.com, or the Securities and Exchange Commission’s website at www.sec.gov.

These filings, such as the Company’s annual report and Form 10-Q, should be read in conjunction with the other cautionary statements that are included in this release. Future events could differ materially from those anticipated in such statements and there can be no assurance that such statements will prove accurate and actual results may vary. The Company undertakes no obligation to publicly update or review any forward-looking statements, whether as a result of new information, future developments or otherwise.

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.usglobaletfs.com. Read it carefully before investing.

Investing involves risk, including the possible loss of principal. Shares of any ETF are bought and sold at market price (not NAV), may trade at a discount or premium to NAV and are not individually redeemed from the funds. Brokerage commissions will reduce returns. Because the funds concentrate their investments in specific industries, the funds may be subject to greater risks and fluctuations than a portfolio representing a broader range of industries. The funds are non-diversified, meaning they may concentrate more of their assets in a smaller number of issuers than diversified funds. The funds invest in foreign securities which involve greater volatility and political, economic and currency risks and differences in accounting methods. These risks are greater for investments in emerging markets. The funds may invest in the securities of smaller-capitalization companies, which may be more volatile than funds that invest in larger, more established companies. The performance of the funds may diverge from that of the index. Because the funds may employ a representative sampling strategy and may also invest in securities that are not included in the index, the funds may experience tracking error to a greater extent than funds that seek to replicate an index. The funds are not actively managed and may be affected by a general decline in market segments related to the index. Airline Companies may be adversely affected by a downturn in economic conditions that can result in decreased demand for air travel and may also be significantly affected by changes in fuel prices, labor relations and insurance costs. 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.

Smart beta refers to investment strategies that emphasize the use of alternative weighting schemes to traditional market capitalization based indices.

JETS and GOAU are distributed by Quasar Distributors, LLC. U.S. Global Investors is the investment adviser to JETS and GOAU.

Net Asset Value
as of 12/02/2020

Global Resources Fund PSPFX $5.53 No Change Gold and Precious Metals Fund USERX $13.18 0.06 World Precious Minerals Fund UNWPX $4.98 0.01 China Region Fund USCOX $9.47 -0.06 Emerging Europe Fund EUROX $6.12 0.09 All American Equity Fund GBTFX $24.63 -0.14 Global Luxury Goods Fund USLUX $19.66 -0.04 Near-Term Tax Free Fund NEARX $2.25 No Change U.S. Government Securities Ultra-Short Bond Fund UGSDX $2.00 No Change