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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.

Spotlight: Ukraine Election

January 15, 2010

Ukraine Map 011510Jack Dzierwa, global strategist and co-manager of the Eastern European Fund (EUROX), discusses Sunday’s presidential election in Ukraine.

The big question in Ukraine’s presidential election is whether or not it will help bring back economic growth.

Frontrunners Viktor Yanukovych and Yulia Timoshenko have been joined in the race by prominent businessman Sergei Tigipko. This likely means a runoff vote in early February before we have a desperately needed change at the top.

The 2004 Orange Revolution that promised a new Ukraine never really delivered economically. Making matters worse, Ukraine was one of the European countries hardest hit by the global downturn.

Ukraine’s major stock market, the PFTS, has underperformed Russia’s MICEX by 83 percent over the past five years—37 percent last year alone. In addition, outgoing president Viktor Yushchenko antagonized Russia during his term and Moscow responded by cutting off natural gas deliveries.

Ukraine’s GDP fell 14 percent in 2009, its currency was the world’s worst against the dollar as of September and only Argentina’s sovereign credit rating is worse, according to Businessweek. Ukraine was hit so hard by the financial crisis that it needed a $16.4 billion bailout by the International Monetary Fund (IMF).

Perhaps the harshest indicator – one economist in a Ukrainian newspaper says Ukraine’s total GDP today is only 76 percent of what it was in 1991, just after the Soviet era ended.

As grim as the situation is, there is reason to believe conditions can improve.

Heavy industry, including aviation engine and turbo generator manufacturing, dominates the PFTS. As conditions in major export destinations in Western Europe and Russia improve, so should the Ukrainian market. In addition, some integrated telecom, steel, utility and fertilizer companies have experienced healthy rebounds.

Russia is Europe’s primary natural gas supplier via Ukraine pipelines, so the country can benefit from healthier relationships with both Moscow and the European Union.

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.

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. 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. The MICEX Index is the real-time cap-weighted Russian composite index.  It comprises 30 most liquid stocks of Russian largest and most developed companies from 10 main economy sectors.  The MICEX Index was launched on September 22, 1997, base value 100.  The MICEX Index is calculated and disseminated by the MICEX Stock Exchange, the main Russian stock exchange. The PFTS is Ukraine’s largest stock exchange with approximately 220 companies as listed.

Net Asset Value
as of 01/17/2020

Global Resources Fund PSPFX $4.61 0.03 Gold and Precious Metals Fund USERX $9.70 -0.05 World Precious Minerals Fund UNWPX $3.30 -0.01 China Region Fund USCOX $9.60 0.04 Emerging Europe Fund EUROX $8.02 0.06 All American Equity Fund GBTFX $26.61 0.08 Holmes Macro Trends Fund MEGAX $17.47 -0.05 Near-Term Tax Free Fund NEARX $2.23 No Change U.S. Government Securities Ultra-Short Bond Fund UGSDX $2.00 No Change