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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.

Signs of Recovery in Russia

June 10, 2009

Tim Steinle 061009Tim Steinle, co-manager of the Eastern European Fund (EUROX), attended the International Economic Forum in St. Petersburg, Russia last week and sent back some observations to our investment team.

On Russian Steel: Despite the recent appreciation of the ruble, Russian steelmakers are still some of the lowest cost producers. Russian steelmakers are facing stiffer competition from other Eastern European countries like Turkey and the Ukraine. It’s possible only a third of Russian steel exports to China are consumed there while the rest is either stockpiled or distributed throughout Asia.

On Russian Banks: Non-performing loans are still in the single digits in Russia and restructured loans make up about 20 percent of all Russian loans. However, a large portion of these loans were restructured to convert dollar-denominated loans into ruble-denominated ones.

On Shipping in Russia: Often a good barometer of economic activity, the shipping industry in Russia is struggling. Export volume is down 20 percent while domestic shipping has been hit even harder—down 50 percent. One industry executive, responding to a question on “green shoots,” said they’ve not seen any meaningful pickup in demand.

One of the highlights of the conference was President Dimitry Medvedev’s keynote address, which had several key takeaways:

  1. Protectionism in a global economy internalizes problems—it doesn’t solve them
  2. Tax increases will slow global economic growth
  3. Troubled banks can be recapitalized with government funds. Medvedev rejects the idea of a “bad bank” holding all the toxic assets
  4. A new reserve currency is needed that relies less on the dollar.

Despite the speech, which attracted worldwide press coverage, Medvedev remains overshadowed by his predecessor, Vladimir Putin.

That didn’t change this week—while Medvedev was in St. Petersburg, Putin was being hailed for humiliating a billionaire industrialist on television and ordering him to pay back wages to his factory workers. Reuters quoted a top diplomat as saying that “Medvedev is up in the clouds and Putin is running the show.”

Please consider carefully the fund’s investment objectives, risks, charges and expenses. For this and other important information, obtain a fund prospectus by visiting or by calling 1-800-US-FUNDS (1-800-873-8637). Read it carefully before investing. Distributed by U.S. Global Brokerage, Inc.

Foreign and emerging market investing involves special risks such as currency fluctuation and less public disclosure, as well as economic and political risk. By investing in a specific geographic region, a regional fund’s returns and share price may be more volatile than those of a less concentrated portfolio. The Eastern European 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. 09-383

Net Asset Value
as of 09/28/2020

Global Resources Fund PSPFX $4.71 0.03 Gold and Precious Metals Fund USERX $13.14 0.11 World Precious Minerals Fund UNWPX $5.02 0.09 China Region Fund USCOX $9.33 0.14 Emerging Europe Fund EUROX $5.44 0.01 All American Equity Fund GBTFX $23.65 0.29 Global Luxury Goods Fund USLUX $16.64 0.31 Near-Term Tax Free Fund NEARX $2.25 No Change U.S. Government Securities Ultra-Short Bond Fund UGSDX $2.00 No Change