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Investor Alert

Home of the Free, Land of the Entrepreneur
July 2, 2015

Let Freedom Ring! Happy 4th of July!

By Frank Holmes
CEO and Chief Investment Officer
U.S. Global Investors

Jan Koum, founder of WhatsApp

At 16, Jan Koum immigrated to the U.S. from his native Ukraine, then still under communist control. He and his single mother rented a small two-bedroom apartment on government assistance and relied on food stamps. Even though he didn’t own a computer at the time, Koum devoured computer networking manuals and became proficient at hacking, a skill that helped him land a job at Yahoo! in 1997.

But after nine years at the Internet company, Koum grew restless. He had other ideas and ambitions. Within a year of leaving Yahoo!, he developed a new instant messaging app for smartphones that he named WhatsApp. Its popularity took off, and Koum watched the valuation of his startup soar from $250,000 in 2009 to $1.5 billion in July 2013.

The following year—only five years after its launch—WhatsApp was acquired by social media titan Facebook for $16 billion plus $3 billion for the company’s founders. In a symbolic gesture, Koum signed the paperwork at the building that had once served as the welfare office where he received his food stamps. With the stroke of a pen, he became $6.8 billion richer. Today, WhatsApp is the top messaging app in the world, with 800 million monthly users, and Koum is number 208 on the Forbes 400 list of wealthiest Americans.

Jan Koum, founder of WhatsApp

Koum’s story might sound like a plotline from the mind of Horatio Alger, the nineteenth-century American novelist whose works dramatize the rise of an impoverished young man to financial prominence. But American history is replete with such stories, starting with that of Benjamin Franklin. One of the Founders of the United States, Franklin helped guarantee that this country would be a place where people can freely pursue their dreams, innovate and capitalize on their achievements.

Much has changed since Franklin signed the Declaration of Independence nearly 240 years ago, but America still stands as a land of opportunity for U.S.-born citizens and immigrants alike.

Where else but in America can a startup such as Uber be valued at $50 billion, higher than 80 percent of the companies in the S&P 500 Index, only six years after its founding? Where else but in America can someone reach billionaire status by inventing a new type of hosiery, as Sara Blakely did with Spanx? Before her now-ubiquitous undergarments were worn by women—and now men—all over the globe, Blakely was so broke that she had to write her own patent without the help of an attorney.

As I pointed out in a Frank Talk early last month, nearly 70 percent of billionaires who show up in the Forbes 400 list are self-made. In fact, the percentage of those who have a self-made score of 10, meaning they created their wealth from nothing (think Jan Koum, Oprah Winfrey and George Soros), now exceeds the percentage of those with a score of 1, indicating they inherited every cent (Laurene Powell Jobs, widow of Apple-founder Steve Jobs). 

Under Pressure: U.S. dollar Continues to Weigh on Copper
click to enlarge

Regarding Apple, the tech giant represents just one of numerous American companies that were founded by either an immigrant or the child of an immigrant (Jobs’ biological father, still living, is Syrian). Recent examples include Sergey Brin, co-founder of Google, who emigrated from the U.S.S.R.; Elon Musk, CEO of Tesla Motors, originally from South Africa; and Yahoo! founder Jerry Yang, a Taiwanese émigré. According to the entrepreneurial research firm Kauffman Foundation, a quarter of all technology and engineering companies created in the U.S. between 2006 and 2010 were founded by foreign-born entrepreneurs. Amazingly, more than 40 percent of Fortune 500 companies were at least co-founded by immigrants or their children: AT&T, Budweiser, General Electric and IBM, among many more.

It’s doubtful that Jan Koum would have found the same level of success had he and his mother stayed in Ukraine. Fortunately for him, as well as the millions who regularly enjoy and benefit from his innovative service, the U.S. welcomed him in and allowed his talents to flourish.

I want to wish everyone a safe and happy Fourth of July, and to my friends and family in Canada, a happy Canada Day!

We asked some of our team members why they came to the U.S.


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Index Summary

  • Major market indices finished down this week.  The Dow Jones Industrial Average fell 1.21 percent. The S&P 500 Stock Index fell 1.18 percent, while the Nasdaq Composite fell 1.40 percent. The Russell 2000 small capitalization index fell 2.46 percent this week.
  • The Hang Seng Composite fell 2.02 percent this week, while Taiwan fell 0.92 percent. The KOSPI rose 0.82 percent.
  • The 10-year Treasury bond yield fell 9 basis points to 2.38 percent.

Domestic Equity Market

S&P 500 Economic Sectors
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  • The U.S. ISM Manufacturing Index rose higher than expected for the month of June, a much needed positive sign for the industrial sector. The reading came in at 53.5, compared to an expected 53.2 and a reading of 52.8 for the prior month.

U.S. ISM Manufacturing Composite Index is Strong
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  • The Conference Board’s consumer confidence index jumped up for the month of June, surpassing analysts’ expectations. The reading came in at 101.4, compared to an expected 97.4 and a reading of 95.4 for the prior month.

Consumer Confidence is on the Upswing
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  • Utilities was the best performing sector in the S&P 500 this week due to the crisis unfolding in Greece and the subsequent decline in U.S. bond yields. The S&P 500 Utilities Index rose 1.14 percent this week.


  • Energy was the worst performing sector in the S&P 500 this week as WTI crude prices slumped. The S&P 500 Energy Index fell 1.98 percent this week.
  • Although the unemployment rate in the U.S. declined, the increase in nonfarm payrolls was weaker than expected.
  • Turmoil in Europe continues to create a significant amount of uncertainty in global markets.


  • The final Markit U.S. Manufacturing purchasing managers’ index (PMI) for the month of June came in at 53.6, higher than expected and well above the critical 50 mark.

Markit U.S. Manufacturing Purchasing Managers' Index Better than Expected
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  • The Markit U.S. Services PMI will be released next week and is expected to increase.
  • The Bloomberg Consumer Comfort Index will be released next week. Given the positive momentum behind many consumer-based indicators, the expectation and hope is for a positive reading from this one as well.


  • The economic confidence index in the eurozone fell from 103.8 to 103.5 for the month of June.
  • The U.S. trade balance results for the month of May will be released next week. The trade deficit is set to widen, most likely as a result of the strong U.S. dollar.
  • The turmoil in Europe, although not a direct threat to the U.S. economy, could have negative repercussions for overall global growth.

Frank Holmes to Speak at the MonoeyShow in San Francisco. July 16-18 2015 - Registration is Free

The Economy and Bond Market

The uncertainty in Greece continued to weigh on global financial markets this week as the country edged closer to debt default and a possible eurozone exit. Much rests on the results of a public referendum this Sunday. Global stocks were mixed, with most major indices range-bound after a sharp drop on Monday. The yield on the U.S. 10-year Treasury note closed the week at 2.39 percent.


  • The National Association of Realtors' index of U.S. pending home sales rose 0.9 percent to a seasonally adjusted 112.6, the highest level since April 2006. It is the latest sign the housing market has regained momentum after a slow start this year.
  • The Institute for Supply Management (ISM) saw its index of national factory activity climb from 52.8 in May to 53.5 in June, the highest level since January.
  • Increased by consumer sentiment on the condition of the labor market, the Conference Board's consumer confidence index rose to 101.4 for the month of June.


  • The June employment report shows nonfarm payroll growth of 223,000, but with net revisions of -60,000 to the prior two months. The unemployment rate dropped to 5.3 percent from 5.5 percent in May, but for all the wrong reasons as household employment fell by 56,000 and the labor force participation rate fell to 62.6 percent, the lowest since 1977.
  • Wage growth for June was soft, coming in unchanged and resulting in the year-over-year rate decelerating to 2 percent from 2.3 percent previously.
  • The final Markit U.S. Manufacturing purchasing managers' index (PMI) fell from 54.0 to 53.6, the lowest reading since October 2013.


  • The ISM Non-manufacturing Index could move slightly higher to 56 in June, supporting continued moderate growth. Despite the deceleration in June’s job growth, services hiring in the U.S. has continued at a healthy pace. Consumer-related data is also on the uptrend, suggesting that households are finally tapping into their gas savings. Construction is also strengthening, which should bolster overall activity.
  • Consumer credit is expected to expand at a solid $18.5 billion in May, a slight deceleration from the strong $20.5 billion pace in April. Retail sales ex-autos expanded at a 1-percent month-over-month pace and vehicle sales were strong in May compared to April. These both indicate solid spending by consumers who likely utilized credit to finance some of that spending.
  • Initial jobless claims for the week ending July 4 are expected to show an improvement to 275,000, down from 281,000 the prior week. This would result in the four-week moving average ticking lower to 273,750 from the previous 274,750.


  • The deteriorating state of bond market liquidity has been a dominant concern among bond investors in 2015. The greatest fear of both investors and regulators is that a “fire sale” of debt could occur if the Federal Reserve does indeed begin to lift rates in September, forcing portfolio managers to sell bonds to raise cash and meet redemptions. This could cause a cascading spiral of selling pressure on bond prices.

The Concern Over Bond Market Liquidity
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Concerns about this have increased lately as the correlation between credit spreads and Treasury yields is turning positive, a phenomenon that has occurred during every run-up to Fed liftoff over the past 25 years. However, the fear of a “fire sale” may be overstated as data from the Investment Company Institute show bond funds have been maintaining levels of liquid assets as a percentage of total assets in the high single digits, which would be more than adequate to handle a level of outflows, even on par with the 2008 post-Lehman period.

Risk of a Fire Sale of Corporate Bonds is Overstated
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  • The May trade balance released next week will likely show the deficit widened from April’s -$40.9 billion. Data on trades have been very volatile, with the trade balance swinging sharply during and after the West Coast port shutdown. The expected widening in May would reflect a gradual return to pre-port shutdown levels.
  • With the upcoming Greek referendum, investors should prepare for market turbulence. However, given the stakes and the constraints facing Greek policymakers, a resolution that keeps Greece within the euro area remains the baseline. This resolution could require considerable socio-political risk in Greece, including potential new elections, and market volatility elsewhere in order to motivate the two sides to get a deal done. A scenario that sees Greece leave the euro area would ultimately be a significant event for financial markets and could trigger major sell-offs.

Curious about the gold market? Read Frank Holmes' latest insights

Gold Market

For the holiday shortened week, spot gold closed at $1,166.20 down $9.35 per ounce, or 0.80 percent. Gold stocks, as measured by the NYSE Arca Gold Miners Index, lost 2.62 percent. The U.S. Trade-Weighted Dollar Index gained 0.63 percent for the week.

Date Event Survey Actual Prior
June -29 Germany CPI YoY 0.50% 0.30% 0.70%
June -30 U.S. Consumer Confidence Index 97.4 101.4 95.4
June -30 HSBC China Manufacturing PMI 49.6 49.4 49.6
June -30 Eurozone CPI Core YoY 0.80% 0.80% 0.90%
July -1 U.S. ISM Manufacturing 53.2 53.5 52.8
July -1 U.S. ADP Employment Change 218K 237K 201K
July -2 U.S. Change in Nonfarm Payrolls 233K 223K 280K
July -2 U.S. Initial Jobless Claims 270K 281K 271K
July -9 U.S. Initial Jobless Claims 277K -- 281K


  • Early in the week gold and silver rose in tandem as Greece closed its banks and imposed capital controls. However, the bounce faced rising opposition as the week progressed towards the employment report out on Thursday, which equity bulls were talking up as the catalyst to move equities out of the deep hole they have fallen into in the prior trading week.
  • The U.S. Mint’s gold coin sales in June rose 57 percent year-over-year. Additionally, customers bought 1.4 million tonnes of gold in the first half of 2015, three times as much as the previous year, according to BullionVault.
  • The Shanghai Gold Exchange will allow use of foreign currencies and bonds as collateral for gold transactions, according to its vice general manager. China continues to improve the liquidity of their gold trading platform for international investors.


  • Barnabas Gan, an economist at Oversea-Chinese Banking Corp., predicted that gold will drop to $1,050 an ounce by the end of 2015, marking a five-year low. Gan topped 19 of his peers from banks to become the most accurate analyst over the past two years. However, not everyone is bearish. The 31 gold analysts tracked by Bloomberg see prices at a $1,212 average in the fourth quarter.
  • Phillip Futures said he expects a strong U.S. labor market report to send gold prices downward to $1,150 an ounce. Conversely, a number below 230,000 could send the price rallying back towards $1,180 an ounce. Actual results came in at 233,000, and gold rallied higher after being down more than $10 prior to the release of the report.
  • In Japan, jewelry owners are unloading unwanted jewels for cash at a record pace and shipping them off to buyers in China and India. According to the Ministry of Finance, exports of used diamonds are up 77 percent this year. Platinum posted the longest run of quarterly losses in 18 years amid concern that demand is waning just as mine supply rebounds. Zinc posted the fourth straight weekly decline, the longest slump since September 2013, as the Greek turmoil spurred concerns over economic growth and commodity demand.


Asia Expected to Lead Global GDP by 2050
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  • A series of reports produced for the LBMA Bullion Market Forum 2015 highlighted the rise of Asia and its future economic impact. According to one, Asia’s ascension will be led by 10 economies made up of China, India, Indonesia, Japan, South Korea, Malaysia, the Philippines, Singapore, Thailand and Vietnam. Those 10 economies could account for 50 percent of global GDP by 2050, while the U.S. and the eurozone could account for less than 30 percent combined. A particularly interesting report is that by Zhang Bingnan, Chairman and Secretary-General of the China Gold Association, looking at the historical opportunity for China to develop the world bullion market. Another report, by Yao Yudong from the People’s Bank of China (PBOC), argues for the need of a new reserve currency. Please visit for links to the slide presentations for more a more detailed review.
  • Jeb Handwerger, in an interview with The Gold Report, debunks the myth that when the U.S. Federal Reserve raises interest rates later this year, it will prove negative for gold. He argues that we’ve had a four-year parabolic rise in the Dow without a meaningful correction, and history has shown that usually every four years you see a 30-50 percent correction. He said rising interest rates may be the catalyst that causes investors to flee the general stock market, which has proven attractive in a low rate environment. Thus, higher interest rates concurrent with a pickup in inflation could result in a rush to safe-haven assets such as gold.
  • Canada is grappling with the risk of a recession as real GDP by industry for April showed a contraction for the fourth consecutive month. This was counter to the consensus expectation for growth in the month. More importantly, it also runs counter to the message from the Bank of Canada in its April Monetary Policy report that much of the impact of the oil price decline occurred in Q1. The release increases the likelihood that the Bank of Canada will decrease its growth forecast at its meeting scheduled for July 15. Another rate cut is also on the table according to David Dole of Macquarie Capital Markets.


  • Ernst & Young’s latest mining risks survey sees a switch to growth leading the risks concern. The report outlined the top 20 business risks that miners are facing, showcasing the about face in the major concerns for operators as the industry shifts from boom to bust, with only three of the top ten risks from this year also featuring in the 2008 survey at the peak of the super cycle. This year’s survey saw a switch to growth leading the risks concerns, followed by productivity improvement, and capital access. Gold miners are struggling to maintain production when growth capital is scarce.
  • According to McKinsey & Company, the world now sits beneath a mountain of debt worth an astonishing $200 trillion. That’s greater than twice the global GDP, which is currently $75 trillion. If that was distributed equally to every man, woman and child on the planet, each person would owe around $28,000. Further, if gold backed total global debt 100 percent, it would yield an equivalent value of $33,900 per ounce.
  • Barrick Gold has pioneered a way to produce gold without having to depend on cyanide’s chemical ability to separate the precious metal from ore. However, researchers have been working on this type of technique, using non-toxic thiosulfate, since the 1970’s. So far the technique has not proven to be suitable for all mines and may add to production costs. It will not be a panacea for increased global gold production but will allow some ores, previously untreatable to yield their gold.

Explore the World's 8 Busiest Airports!

Energy and Natural Resources Market



  • Refiners continue to dominate the resources space as more favorable margins have moved the industry towards higher utilization rates, maximizing profitability. The S&P Supercomposite Oil & Gas Refining & Marketing Index rose 4.14 percent this week.

U.S. Refining Utilization Rates Have Soared
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  • Utilities outperformed the broader resource space as the crisis in Greece rattled markets and brought down government yields. The S&P 500 Utilities Index rose 1.14 percent this week.
  • Packaged food stocks outperformed this week as the dollar remains strong and the more cyclical areas suffer. The S&P Supercomposite Packaged Foods Index rose 0.13 percent this week.


  • Precious metals stocks pulled back this week as more analysts released negative forecasts for the space given the expected rate hike by the end of the year. The Global X Silver Miners ETF and the NYSE Arca Gold Miners Index fell by 3.97 and 2.6 percent, respectively.
  • Iron and steel stocks fell this week in response to greater concerns that the Chinese economy is slowing. The Bloomberg World Iron and Steel Index fell by 1.74 percent this week.
  • The perceived slowdown in China also took its toll on industrial metals stocks as the S&P/TSX Diversified Metals and Mining Index fell 3.44 percent.


  • With margins expanding and utilization rates trending higher, refiners have been a bright spot in an otherwise gloomy resources space. Their momentum appears to be solidified.
  • With the drama in Greece, utilities may be a good place to hide as the uncertainty causes investors to pile into safer government bonds, thus driving down yields.
  • The strong dollar may get stronger should the Fed raise rates this September. Packaged food stocks and other relatively dollar immune industries should outperform.


  • West Texas Intermediate crude oil had a significant pull back this week after remaining relatively unchanged over the past few weeks. A breakdown may be forming.
  • China’s HSBC manufacturing PMI rose by less than expected for the month of June, remaining below the 50 level that indicates an expanding economy.
  • Resources remain at the mercy of the dollar and the Fed.
Frank Talk Insight for Investors
July 1, 2015
Investors Take Shelter as Greek Referendum Nears
June 29, 2015
$8 Trillion Alternative Energy Boom Is a Win for Copper
June 26, 2015
There’s a Huge Disparity Between How Regulators Deal with Gold and Stock Market Manipulation
A Blog by Frank Holmes, C.E.O. and Chief Investment Officer

Emerging Markets



  • Hungarian equities outperformed this week, despite the political turmoil gripping the region. The central bank’s commitment to further easing and an improvement in the country’s manufacturing purchasing manager’s index (PMI) are among the main reason for Hungary’s outperformance. The Budapest Stock Exchange Index rose 0.91 percent this week.
  • The Czech Republic likewise saw an improvement in its manufacturing PMI. Although equities lost value this week, the Prague Stock Exchange Index was a relative outperformer in the emerging market space, falling only 0.7 percent.
  • Russia was another relative outperformer this week. The MICEX Index fell only 0.21 percent this week.


  • Greek Prime Minister Alexis Tsipras did the unexpected over the weekend and ended negotiations with creditors to pursue a referendum. While many thought a deal was around the corner, this rash decision led to a freeze in the Greek economy as capital controls and a bank holiday were both declared. The yield on the Greek 10-year government notes sharply increased as a result of the negative news. Greek markets are closed until further notice, however, the U.S. traded Global X FTSE Greece 20 ETF fell 9.45 percent this week.

Greek 10-Year Bond Yields Blew Up
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  • Despite another round of easing in China, equities pulled back sharply again this week. One explanation is the growing concern that China’s economy is stalling, as indicated by a weaker than expected HSBC manufacturing PMI reading for the month of June. The Shanghai Stock Exchange Composite Index fell 6.68 percent this week.
  • Turkish stocks pulled back this week as parliamentary speaker elections failed to shine any light on a probable coalition formation between parties. The Borsa Istanbul 100 Index fell 1.99 percent this week.


  • Manufacturing PMIs for Czech Republic and Poland look particularly positive, signaling a strengthening economy. Turkey’s manufacturing PMI, however, appears to be lacking any positive traction as the country faces significant economic and political uncertainty.

Turkey Lags Emerging Europe on PMI
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  • Although things seem like a disaster in Greece at the moment, it is more likely than not that the Greek people will vote to accept the creditors’ proposal on Sunday. If the yes vote prevails, stocks should recover.
  • Taiwanese equities remain an attractive alternative to participate in a potential Chinese growth recovery later this year, especially against near-term volatility in Chinese markets.  Meaningful revenue exposure to China, significant benefits from lower oil prices, relatively low sensitivity to U.S. interest rates, historically inexpensive valuation, steady earnings growth, and relative under-ownership by foreign investors are among the favorable drivers for Taiwanese outperformance going forward.

Taiwan More Defensive Alternative to Play China Recovery
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  • The main overarching threat for emerging markets remains the dollar’s strength and the expectation of a rate hike this year.
  • Russia will release its monthly inflation data next week. Analysts are expecting a reduction in the rate, which would provide more room for the central bank to ease, harming the ruble.
  • Small- and micro-cap Chinese A Share companies have experienced a severe drawdown in the last month from extremely overbought levels, which challenges the core rationale for privatizing U.S.-traded Chinese companies and re-listing them in the A Share market, because the sustainability of valuation premium in the A Share market has become highly uncertain.  This can weigh on investor sentiment towards Chinese ADRs in the

Uncover the Patterns in Commodity Returns

Leaders and Laggards


Weekly Performance
Index Close Weekly
DJIA 17,730.11 -216.57 -1.21%
S&P 500 2,076.78 -24.71 -1.18%
S&P Energy 546.28 -11.04 -1.98%
S&P Basic Materials 304.42 -5.58 -1.80%
Nasdaq 5,009.21 -71.29 -1.40%
Russell 2000 1,248.26 -31.54 -2.46%
Hang Seng Composite Index 3,612.07 -74.59 -2.02%
Korean KOSPI Index 2,107.33 +17.07 +0.82%
S&P/TSX Canadian Gold Index 150.64 -1.21 -0.80%
XAU 62.65 -2.03 -3.14%
Gold Futures 1,165.20 -8.00 -0.68%
Oil Futures 56.53 -3.10 -5.20%
Natural Gas Futures 2.83 +0.06 +2.16%
10-Yr Treasury Bond 2.38 -0.09 -3.68%
Monthly Performance
Index Close Monthly
DJIA 17,730.11 -281.83 -1.56%
S&P 500 2,076.78 -32.82 -1.56%
S&P Energy 546.28 -26.72 -4.66%
S&P Basic Materials 304.42 -13.50 -4.25%
Nasdaq 5,009.21 -67.31 -1.33%
Russell 2000 1,248.26 -3.54 -0.28%
Hang Seng Composite Index 3,612.07 -265.79 -6.85%
Korean KOSPI Index 2,107.33 +28.69 +1.38%
S&P/TSX Canadian Gold Index 150.64 -15.87 -9.53%
XAU 62.65 -7.88 -11.17%
Gold Futures 1,165.20 -29.20 -2.44%
Oil Futures 56.53 -4.73 -7.72%
Natural Gas Futures 2.83 +0.14 +5.00%
10-Yr Treasury Bond 2.38 +0.12 +5.30%
Quarterly Performance
Index Close Quarterly
DJIA 17,730.11 -33.13 -0.19%
S&P 500 2,076.78 +9.82 +0.48%
S&P Energy 546.28 -21.51 -3.79%
S&P Basic Materials 304.42 -2.81 -0.91%
Nasdaq 5,009.21 +122.28 +2.50%
Russell 2000 1,248.26 -7.40 -0.59%
Hang Seng Composite Index 3,612.07 +90.26 +2.56%
Korean KOSPI Index 2,107.33 +78.26 +3.86%
S&P/TSX Canadian Gold Index 150.64 -11.56 -7.13%
XAU 62.65 -5.31 -7.81%
Gold Futures 1,165.20 -36.60 -3.05%
Oil Futures 56.53 +7.39 +15.04%
Natural Gas Futures 2.83 +0.12 +4.42%
10-Yr Treasury Bond 2.38 +0.47 +24.63%


Please consider carefully a 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.

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 Emerging Europe Fund invests more than 25 percent 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.

Because the Global Resources Fund concentrates its investments in a specific industry, the fund may be subject to greater risks and fluctuations than a portfolio representing a broader range of industries.

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 percent to 10 percent of your portfolio in these sectors.

Bond funds are subject to interest-rate risk; their value declines as interest rates rise. Tax-exempt income is federal income tax free. A portion of this income may be subject to state and local income taxes, and if applicable, may subject certain investors to the Alternative Minimum Tax as well. 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. The Near-Term Tax Free Fund may be exposed to risks related to a concentration of investments in a particular state or geographic area. These investments present risks resulting from changes in economic conditions of the region or issuer.

Investing in real estate securities involves risks including the potential loss of principal resulting from changes in property value, interest rates, taxes and changes in regulatory requirements.

Past performance does not guarantee future results.

Some link(s) above may be directed to a third-party website(s). U.S. Global Investors does not endorse all information supplied by this/these website(s) and is not responsible for its/their content.

These market comments were compiled using Bloomberg and Reuters financial news.

Fund portfolios are actively managed, and holdings may change daily. Holdings are reported as of the most recent quarter-end. Holdings as a percentage of net assets as of 03/31/2015:

Yahoo! Inc.: 0.0%
Facebook: Holmes Macro Trends Fund, 3.23%
Apple, Inc.: All American Equity Fund, 4.03%; Holmes Macro Trends Fund, 5.34%
Google, Inc.: 0.0%
Tesla Motors, Inc.: 0.0%
AT&T, Inc.: All American Equity Fund, 1.09%
General Electric Co.: 0.0%
IBM: All American Equity Fund, 0.89%
Barrick Gold Corp.: Gold and Precious Metals Fund, 0.06%; World Precious Minerals Fund, 0.06%
Global X Silver Miners ETF: 0.0%
Global X FTSE Greece 20 ETF: 0.0%

*The above-mentioned indices are not total returns. These returns reflect simple appreciation only and do not reflect dividend reinvestment.
The Dow Jones Industrial Average is a price-weighted average of 30 blue chip stocks that are generally leaders in their industry.
The S&P 500 Stock Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies.
The Nasdaq Composite Index is a capitalization-weighted index of all Nasdaq National Market and SmallCap stocks.
The Russell 2000 Index® is a U.S. equity index measuring the performance of the 2,000 smallest companies in the Russell 3000®, a widely recognized small-cap index.
The Hang Seng Composite Index is a market capitalization-weighted index that comprises the top 200 companies listed on Stock Exchange of Hong Kong, based on average market cap for the 12 months.
The Taiwan Stock Exchange Index is a capitalization-weighted index of all listed common shares traded on the Taiwan Stock Exchange.
The Korea Stock Price Index is a capitalization-weighted index of all common shares and preferred shares on the Korean Stock Exchanges.
The Philadelphia Stock Exchange Gold and Silver Index (XAU) is a capitalization-weighted index that includes the leading companies involved in the mining of gold and silver.
The U.S. Trade Weighted Dollar Index provides a general indication of the international value of the U.S. dollar.
The S&P/TSX Canadian Gold Capped Sector Index is a modified capitalization-weighted index, whose equity weights are capped 25 percent and index constituents are derived from a subset stock pool of S&P/TSX Composite Index stocks.
The S&P 500 Energy Index is a capitalization-weighted index that tracks the companies in the energy sector as a subset of the S&P 500.
The S&P 500 Materials Index is a capitalization-weighted index that tracks the companies in the material sector as a subset of the S&P 500.
The S&P 500 Financials Index is a capitalization-weighted index. The index was developed with a base level of 10 for the 1941-43 base period.
The S&P 500 Industrials Index is a Materials Index is a capitalization-weighted index that tracks the companies in the industrial sector as a subset of the S&P 500.
The S&P 500 Consumer Discretionary Index is a capitalization-weighted index that tracks the companies in the consumer discretionary sector as a subset of the S&P 500.
The S&P 500 Information Technology Index is a capitalization-weighted index that tracks the companies in the information technology sector as a subset of the S&P 500.
The S&P 500 Consumer Staples Index is a Materials Index is a capitalization-weighted index that tracks the companies in the consumer staples sector as a subset of the S&P 500.
The S&P 500 Utilities Index is a capitalization-weighted index that tracks the companies in the utilities sector as a subset of the S&P 500.
The S&P 500 Healthcare Index is a capitalization-weighted index that tracks the companies in the healthcare sector as a subset of the S&P 500.
The S&P 500 Telecom Index is a Materials Index is a capitalization-weighted index that tracks the companies in the telecom sector as a subset of the S&P 500.
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 Consumer Price Index (CPI) is one of the most widely recognized price measures for tracking the price of a market basket of goods and services purchased by individuals. The weights of components are based on consumer spending patterns.
The Purchasing Manager’s Index is an indicator of the economic health of the manufacturing sector. The PMI index is based on five major indicators: new orders, inventory levels, production, supplier deliveries and the employment environment.
The National Association of Realtors Index of pending home sales tracks signed real estate contracts for existing single-family homes, condos and co-ops that have not yet closed. As such, it is a leading indicator for existing home sales.
The ISM manufacturing composite index is a diffusion index calculated from five of the eight sub-components of a monthly survey of purchasing managers at roughly 300 manufacturing firms from 21 industries in all 50 states.
The Consumer Confidence Index (CCI) is an indicator which measures consumer confidence in the Economy.
The Purchasing Manager’s Index is an indicator of the economic health of the manufacturing sector. The PMI index is based on five major indicators: new orders, inventory levels, production, supplier deliveries and the employment environment.
The Bloomberg Consumer Comfort Index is a weekly, random-sample survey tracking Americans' views on the condition of the U.S. economy, their personal finances and the buying climate.
The European Commission Economic SentiMent Indicator Eurozone is a monthly indicator that reflects general economic activity of the EU. The indicator combines assessments and expectations stemming from business and consumer surveys. Such surveys include different components of the economy: industry, consumers, constructions and retail trade.
The ISM Nonmanufacturing index based on surveys of more than 400 non-manufacturing firms' purchasing and supply executives, within 60 sectors across the nation, by the Institute of Supply Management (ISM). The ISM Non-Manufacturing Index tracks economic data, like the ISM Non-Manufacturing Business Activity Index. A composite diffusion index is created based on the data from these surveys that monitors economic conditions of the nation.
The S&P Supercomposite Oil & Gas Refining & Marketing Index is a capitalization-weighted index.
The S&P Supercomposite Packaged Foods Index is a capitalization-weighted index.
The Bloomberg World Iron & Steel Index is a capitalization-weighted index of the leading iron/steel stocks in the world.
S&P/TSX Capped Diversified Metals and Mining Index is an index of companies engaged in diversified production or extraction of metals and minerals.
The Budapest Stock Exchange Index is a capitalization-weighted index adjusted for free float. The index tracks the daily price-only performance of large, actively traded shares on the Budapest Stock Exchange.
The PX index is the official index of the Prague Stock Exchange.
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 Shanghai Composite Index (SSE) is an index of all stocks that trade on the Shanghai Stock Exchange.
The Borsa Istanbul 100 Index is a capitalization-weighted index composed of National Market companies except investment trusts.
The TWSE, or TAIEX, Index is a capitalization-weighted index of all listed common shares traded on the Taiwan Stock Exchange.

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Net Asset Value
as of 07/02/2015

Global Resources Fund PSPFX $5.46 No Change Gold and Precious Metals Fund USERX $5.45 No Change World Precious Minerals Fund UNWPX $4.54 0.03 China Region Fund USCOX $9.14 -0.13 Emerging Europe Fund EUROX $6.11 0.02 All American Equity Fund GBTFX $27.85 -0.07 Holmes Macro Trends Fund MEGAX $21.29 -0.06 Near-Term Tax Free Fund NEARX $2.24 No Change U.S. Government Securities Ultra-Short Bond Fund UGSDX $2.00 No Change