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Welcome to U.S. Global Investors
Dear Investor,
Thank you for inquiring about our unique China Region Opportunity Fund. The fund is a rare opportunity to tap into the extraordinary growth of this rapidly expanding region of the world. Members of our portfolio management team have professional, financial and business experience in China so they can manage your money in this highly specialized sector.
As the most populated country on earth awakens to the calls of capitalism, a dynamic new economic energy emerges from the China region. Construction, development and economic activity accelerate. Incomes and expectations rise. Entrepreneurism thrives. Market volatility and risk abound, but the opportunity is too great to ignore.
The China Region Opportunity Fund seeks capital appreciation by investing in stocks of companies in the greater China region. Emerging markets have demonstrated volatility, so please read the prospectus carefully before investing.
Everything you need to open an account in the China Region Opportunity Fund is inside this booklet. In three easy steps you can become a fund shareholder. Simply:
- Review the enclosed investor’s guide and prospectus carefully;
- Complete the enclosed new account application; and
- Mail the application with your check in the postage-paid envelope.
Investing in emerging markets involves a higher level of risk than investments in more established markets, so please read the prospectus carefully before investing. If there is anything we can do to help you with this investment decision, please call our Investment Center at 1-800-US-FUNDS (1-800-873-8637). An investor representative will be happy to answer your questions or provide additional information.
I look forward to welcoming you as a fellow shareholder.
Sincerely,
Frank Holmes
Chairman & CEO
P.S. Call 1-800-US-FUNDS to learn about qualifying for a free lifetime IRA.
Please consider carefully the 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.
Not part of prospectus
China Region Opportunity Fund
Discover the extraordinary growth opportunities in the China Region. Our specialized fund gives you a unique opportunity to diversify your portfolio into Asia’s emerging markets while capturing the potential for capital growth.
The China Region Opportunity Fund invests in stocks of companies in the greater China region, including China, Hong Kong, Singapore, Korea, Thailand, Malaysia and Taiwan. The fund’s objective is to achieve capital appreciation.
Investment Goals: Long-term growth of capital
Sales Charge: None – 100% no-load
Risk/Reward Potential:
Why Invest in China?
China’s 1.2 billion people, the greatest population of any country on earth, have the potential to be the world's largest consumer market. A growing middle class, with a high rate of savings, is investing in China's dynamic new private sector and its stock market.
- With dramatic growth rates over the past decade, two to three times those of the U.S. and Europe, China’s awakening capitalism offers investors opportunity for extraordinary capital returns.
- China’s special economic zones and encouragement of foreign ventures support international investment and trade. China increasingly influences commerce throughout Southeast Asia, creating investment opportunities in expanding Chinese companies in other Asian firms that trade with them.
- Now that the Chinese have witnessed the powerful images of Western wealth, the tide of change likely to be turned back. The millions of Chinese have been exposed to an affluent lifestyle are eager educate themselves and work hard to be able to part in it.
- While investing in China involves special inherent to emerging foreign markets, the potential for economic growth is tremendous.
Not part of prospectus
China: Stalking the World’s Commodities
There are a number of factors driving the record gains in world commodities and materials prices, but no factor is greater than the demand from China. Asia’s most populous country accounts for a rising percentage of worldwide demand in all commodities. To meet its growing consumer and industrial demand, China imports large quantities of gold, platinum, nickel, silver, oil, copper and iron ore. Now is the time to take advantage of the growth opportunities provided by China’s insatiable demand for these commodities and basic materials.
For example, in 2003 Asia consumed 19 million barrels of oil daily, with a population of about 3 billion. By contrast, 285 million Americans consumed 22 million barrels of oil a day, a per capita consumption more than 10 times higher. Led by China—which overtook Japan to become the world’s second-largest oil consumer after the United States—Asia’s demand for oil is growing steadily and should result in higher energy prices going forward.
China’s Industrial Production
China’s industrial production, which rose 17 percent in 2003, has consistently outperformed the industrial production of the United States. China’s strong performance is a result of the government’s foreign direct investment reform and infrastructure modernization. Foreign entities are taking advantage of these changes by investing in a marketplace that remains more than 1-billion-people strong.
China’s GDP continues to grow at astounding rates—expanding 9 percent annually in the decade between 1993-2003. It is estimated that more than 270 million Chinese have risen above the absolute poverty line in recent years. The trends in China provide a sharp contrast to other emerging economies, where negligible economic growth has raised the prevalence of poverty and increased social unrest, driving away foreign investment.
China’s Demand
China’s demand for precious metals continues to gain momentum with the opening of its gold market to retail investors. China’s culture has an acute affinity for secular and religious precious metal jewelry, which, when combined with increasing per capita consumption, will be a powerful engine for growth. Not only are gold and silver experiencing increasing demand, China now accounts for more than 50 percent of platinum demand worldwide, up from 30 percent in 2000. This growth largely comes from the popularity of platinum jewelry.
China’s consumption of industrial raw materials continues to grow as a percentage of world demand. Higher relative GDP and industrial production growth in China are critical factors in explaining this phenomenon. China’s demand for iron ore and nickel has been largely driven by the country’s need for large amounts of steel in constructing additional infrastructure to meet the needs of its people. Copper also requires measurable importation to meet the country’s needs for construction pipe and wiring.
Not part of prospectus
Metal demand/consumption correlates better with industrial production (IP) than 
GDP. China’s IP growth rates far exceed other major economies.
The investment team at U.S. Global Investors, Inc. believes the economic growth in China will be a sustainable force in the global economy for years to come. Evidence of economic growth will be most clear in the supply and demand dynamics of the commodities marketplace, where environmental restrictions in developed countries and years of weak pricing on the global market have kept mining and production at unsustainably low levels. We expect further gains from this awakening dragon in the global economy in the future.
Shareholder Benefits
Our Portfolio Management Team Makes Investment Decisions for You
Investing in the greater China region’s markets can be difficult because information on companies is hard to find and available only to the most sophisticated investors. Our portfolio managment team understands the culture and language and has contacts in the greater China region’s capital markets to help find the best investments for the fund. They also have access to a universe of information about these markets.
The Fund Focuses on China while Seeking Outstanding Opportunities Throughout the China Region
At least 80% of the fund’s assets will be invested in equity securities issued by China region companies. These companies must fit at least one of these criteria:
1. Be organized under the laws of countries within the China region; or
2. Have at least 50% of their assets in one or more China region countries; or
3. Derive at least 50% of their gross revenues or profits from providing goods or services to or from one or more China region countries.
Your Investment is Diversified to Reduce Risk
Broadening a portfolio into international markets increases the opportunity for growth of capital. Also, investing worldwide reduces the exposure of an investor’s portfolio to a downturn in a single country’s market.
Few individual investors have the financial assets to build a fully diversified portfolio on their own. When you invest in a mutual fund, your investment is spread across many companies. This diversification minimizes the impact of any one company not performing well.
Not part of prospectus
Investing is Easy and Affordable
We believe everyone should have the opportunity to invest. Our low minimum initial investment of $5,000 makes it easy and affordable to build a position in the China Region Opportunity Fund. If you use our ABC Investment Plan,® you can get started with as little as $100 when you make monthly automatic investments of only $30 or more. Individual Retirement Accounts (IRAs) have no minimum investment requirement, so it is easy for you to open an account for yourself, your children or grandchildren. All new IRA investments of $10,000 or more will receive a lifetime waiver of custodian fees.
You Save Money with a No-load Investment
Investing in foreign stocks on your own can be very expensive. As an institutional investor, the fund can negotiate lower commissions on its portfolio transactions. Because our funds are 100% no load, you never pay comissions or sales charges. Please read the prospectus, which includes charges and ongoing expenses, carefully before investing.
Your Account Information is Just a Toll-Free Phone Call Away
You can call toll free from anywhere in America to check your account balance, confirm deposits, verify exchanges and more. This convenient service is available 24 hours a day, seven days a week. Call 1-800-US-FUNDS (1-800-873-8637).
You Have Easy Access to a Variety of Funds
As your investment needs change, you can conveniently exchange part or all of your investment in the China Region Opportunity Fund into any of the other funds within the U.S. Global Investors’ family of funds—for a fee of only $5. Just call 1-800-US-FUNDS. Our family of no-load mutual funds gives you the opportunity to build a balanced portfolio and strategically place your assets among a variety of stock, bond and money market investments.
You Always Have Easy Access to Your Money.
We make it convenient for you to invest in the China Region Opportunity Fund. You can buy, exchange or sell fund shares on any business day. You can withdraw money from your account by written request or by telephone exchange.
By written request: Upon receipt of your written instructions, we will mail or wire your money to you or your financial institution.
By telephone exchange: If your investment needs change, you can exchange your investment between any of the U.S. Global Investors’ funds for a fee of only $5.
Did you know...? For instant liquidity, you can transfer money by phone to your U.S. Treasury Securities Cash Fund account and then write a check for any amount you need. Call 1-800-873-8637 for a free investment kit.
Like all mutual funds, an investment in the U.S. Treasury Securities Cash Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or by any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund.
Not part of prospectus
ABC Investment Plan®
The ABC Investment Plan® Provides You with an Opportunity to Automatically Invest in Our Funds with a Lower Initial Investment.
To sign up for the ABC Investment Plan,® simply complete section 8 of your new account application.
Saving is as easy as ABC! This systematic approach to investing, called dollar-cost averaging, provides you with a disciplined program for achieving your financial goals. With an initial investment amount of $100 and a minimum monthly investment of $30, this savings program allows you to automatically invest on a monthly basis. Simply choose the amount you want to invest and the day of the month (between the 1st and 28th) you want to invest it. According to your instructions, we will transfer the money from your checking account and invest it in the fund of your choice.
Monthly investing is easy and affordable.
Long-term goals like buying a home, saving for college or building a retirement nest egg are achieved more easily when you put aside a little each month. Automatic reinvestment and compounding of dividend income adds momentum to the building of your wealth. And, because the amount you invest stays the same, your money buys more shares when the price is low and fewer shares when the price is high.
A program of regular investing doesn't assure a profit or protect against loss in a declining market. You should evaluate your ability to continue in such a program in view of the possibility that you may have to redeem fund shares in periods of declining share prices as well as in periods of rising prices.
Attention parents and grandparents: Did you know...?
The ABC Investment Plan® is a powerful tool for teaching children the rewards of saving and investing regularly. With the ABC Investment Plan,® they can watch their savings grow and witness the benefits of compounding earnings over time. These invaluable financial lessons can provide a lifetime of benefits.
The table shows how your money can grow over time.
| Monthly Contribution | 5 Years |
10 Years |
20 Years |
30 Years |
| $30 | $2,040 |
$4,658 |
$12,331 |
$24,968 |
| $50 | $3,400 |
$7,764 |
$20,552 |
$41,613 |
| $100 | $6,801 |
$15,528 |
$41,103 |
$83,226 |
| $250 | $17,002 |
$38,821 |
$102,758 |
$208,065 |
| $500 | $34,003 |
$77,641 |
$205,517 |
$416,129 |
| $1000 | $68,006 |
$155,282 |
$411,034 |
$832,259 |
This hypothetical example assumes a 5% annual return. Your actual return may be more or less than this amount. No investment program can guarantee a profit.
Not part of prospectus
You Can Open Your New Account
in 3 Easy Steps.
1. Review the prospectus carefully.
Prospectus: A legal document that describes a mutual fund’s objectives, strategies, risks, costs and management.
The prospectus is the best source of information on a mutual fund. While a fund’s prospectus may appear intimidating at first, it is important that you read it carefully before investing to make sure the fund’s investment objectives and risks are appropriate for you.
The prospectus contains valuable information including:
● the fund’s investment objectives
● the strategies it plans to use to achieve its objectives
● the fund’s operating expenses and fees
● special risks associated with the fund’s investments.
Initial investment requirements
| Regular | $5,000 |
| Retirement | no minimum |
| UGMA/UTMA | $50 |
| Business | $5,000 |
| Trust | $5,000 |
| ABC Investment Plan® | $100 |
2. Complete the enclosed new account application. Please be sure to sign it.
Your Account Options:
Basic Accounts are for individuals or joint account holders.
Retirement Accounts earn tax-deferred income for your retirement savings. We offer traditional and Roth IRAs, Education Savings Accounts, SEPs, 401(k) and 403(b) Plans, Profit Sharing and Money Purchase Plans.
Uniform Gifts to Minors Act Accounts (UGMA) and Uniform Transfers to Minors Act Accounts (UTMA) allow an adult to act as a custodian for a child’s investment.
Business Accounts can be customized for your sole proprietorship, partnership or corporation.
Trust Accounts are for estate planning purposes and for those with fiduciary responsibilities.
Not part of prospectus
3. Open your account by mail or wire transfer
To open an account, mail your investment check (made payable to the fund you have chosen) with your application in the postage-paid envelope provided. Or, to arrange a wire transfer, call 1-800-US-FUNDS. Current shareholders may easily establish a new account by telephone exchange. On the day we receive your new account application and investment, we will open your account and immediately mail you a statement confirming your purchase.
Not part of prospectus
Services to Keep You Informed
We Keep You Informed on Your Investments
Account Statements
Each time you make a transaction or a dividend is paid, you’ll receive an account statement.
Investment Center
The Center is staffed by a team of investor representatives who are mutual fund specialists. They are dedicated to helping you maximize your investment experience with U.S. Global Investors. You can call 1-800-US-FUNDS to have our specialists answer questions about your investment, explain how our family of funds can help you build a diversified portfolio, provide you with educational tools to help you learn how to build wealth, suggest strategies for making investing easy and assist you in making account transactions. The Investment Center is open every business day from 7:30 a.m. to 7:00 p.m. (CST).
Toll-Free Telephone Link
Call 1-800-US-FUNDS anytime for your account balance, fund performance updates, share closing prices and fund insights direct from our portfolio
managers. This automated service is available 24 hours a day, seven days a week.
Portfolio Direct
Listen to our portfolio managers’ insights and expectations for the markets. Call 1-800-US-FUNDS and select menu option 6.
The Shareholder Report
Each quarter you will receive an educational report filled with financial solutions, fund performance highlights, insights from expert money managers and global perspectives on investing.
Financial Reports
We will provide you with detailed information on portfolio holdings and investment performance twice a year.
Internet Website
Our website, www.usfunds.com, offers you services and information, including access to your account, an asset allocation tool for selecting an asset mix that meets your goals, and retirement planning worksheets to help you determine how much to save to reach your retirement goals. You can also download prospectuses, read the Shareholder Report, monitor share prices and learn more about our family of funds.
E-mail Connection
You can communicate with the Investment Center via electronic mail. Send your questions to shsvc@usfunds.com. An investor representative will respond to your message within one business day.
Not part of prospectus
Fund Listings
Daily share prices and performance data for our funds are listed in The Wall Street Journal, Investor’s Business Daily, Barron’s and many local newspapers. Here is an easy reference chart to help you decipher the listings.
Not part of prospectus
Explore U.S. Global Investors
Entrepreneurial, Dynamic and Unique
These are the words which best describe our company as well as our employees. We are sophisticated investment specialists seeking opportunities globally for our shareholders. Our performance-inspired fund management team not only has advanced academic credentials but also the hands-on experience needed to guide them in making investment decisions on
your behalf.
Our Mission:
To maximize the growth, protection and service of our shareholders’ wealth, with the highest ethical standards.
Still Have Questions?
Please call our Investment Center at 1-800-US-FUNDS. An investor representative will be happy to answer your questions or provide you with additional information.
The China Region Opportunity Fund’s share price is expected to be more volatile than those of funds only invested in domestic securities. The fund may invest in private placements and IPOs, which may significantly affect performance. There is no guarantee that these high-risk investments will have the same effect on the fund’s performance if they are made in the future.
Foreign and emerging market investing involves special risks such as currency fluctuation and less public disclosure, as well as economic and political risk.
Please consider carefully the 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.
Not part of prospectus