Our Mutual Funds

For the 12-month period through December 31, 2021, the Global Luxury Goods Fund (USLUX) appreciated 24.91%, underperforming its benchmark, the S&P Composite 1500, which appreciated 28.42%. See complete fund performance here.

Performance data quoted represents past performance. Past performance does not guarantee future results. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost.

Overall, cyclical sectors outperformed defensives on the back of the continued recovery and reopening narrative. Energy, communication services, financials and information technology outperformed while materials, industrials, health care, consumer discretionary, consumer staples, utilities and telecommunication services underperformed.

Strengths

• The fund’s strong stock selection in the consumer discretionary sector had the most positive effect on performance relative to the index. The fund’s overweight strategy in auto, hotels and casinos/gabling stocks proved to work well.
• The fund’s stock selection in the financial sector had the second most positive effect on the fund’s performance relative to the index.
• A standout contributor to fund performance was Volkswagen, the German motor vehicle manufacturer headquartered in Wolfsburg. Back in March, as shares of Volkswagen surged, some analysts commented that the European car company could overtake the U.S. electric vehicle (EV) car maker Tesla in 2022. Volkswagen is a not an EV seller in Europe, however, and in order to meet the eurozone’s climate targets, the company has plans to launch as many as 70 purely electric car models by 2030.

Weaknesses

• The fund’s stock selection in materials had the most negative effect on the fund’s performance relative to the index. The strategy to overweight precious metals proved to be weak.
• The fund’s underweight allocation in the information technology had the second most negative effect on the fund’s performance relative to the index. The strategy to underweight packaged software, in particular Microsoft, had the most negative effect.
• A notable detractor to fund performance was NIO, the Chinese EV maker. The company advised that deliveries in October were down 27.5% year-on-year due to the restructuring of manufacturing lines and supply chain challenges. NIO is facing intense competition, and despite weaker pricing in 2021, the company has a high valuation.

Opportunities

• We believe further market reopenings will help drive luxury markets globally. A substantial portion of industry revenues is generated by consumers marking luxury purchases outside of their home countries. China may start opening its borders to foreign travel after the Winter Olympics are completed in February 2022.
• Despite the economic challenges due to the pandemic, households saw an increase in wealth over the past year. High savings rates, combined with markets reopening, should drive the global sales of luxury goods.
• Due to the global push into renewable energy, hybrid and electric luxury cars may continue to rise. By 2030, most car sales will be eco-friendly, and by 2040, EVs could outsell gasoline and diesel vehicles.

Threats

• Supply chain disruptions may continue to put pressure on luxury goods. Key raw materials needed for construction and components such as semiconductors were in short supply in 2021, negatively affecting goods production. Supply chain disruptions may not ease in 2022.
• Slowing growth in China could present a challenge for luxury goods as Chinese consumers in recent years accounted for 35% of luxury purchases worldwide. China’s official economic growth target is expected to be set above 5% in 2022 versus expected growth of 8% in 2021.
• The World Health Organization (WHO) suggested 2022 will see the end of the Covid pandemic as the world knows the virus well and has all the right tools to fight it. But only time can tell if we can all put the pandemic years behind us.

The S&P 1500 Composite is a broad-based capitalization-weighted index of 1500 U.S. companies and is comprised of the S&P 400, S&P 500, and the S&P 600.

Fund portfolios are actively managed, and holdings may change daily. Holdings are reported as of the most recent quarter-end. Holdings in the China Region Fund as a percentage of net assets as of 12/31/2021: Volkswagen AG 3.02%, Tesla Inc. 8.17%, NIO Inc. 2.42%, Microsoft Corp. 0.00%.

Standard Disclosure
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. Foreside Fund Services, LLC, Distributor. U.S. Global Investors is the investment adviser.

Stock markets can be volatile and share prices can fluctuate in response to sector-related and other risks as described in the fund prospectus.

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor.

Top 10 Equity and Debt Holdings as of 12-31-2021

Industry Breakdown as of 12-31-2021

Regional Breakdown as of 12-31-2021

Growth of $10,000 Over 10 Years as of 12/31/2021

The chart illustrates the performance of a hypothetical $10,000 investment made in the fund during the depicted time frame, compared to its benchmark index. Figures include reinvestment of capital gains and dividends, but the performance does not include the effect of any direct fees described in the fund’s prospectus (e.g., short-term trading fees) which, if applicable, would lower your total returns.

Month End Average Annual Total Returns as of 12/31/2021

Quarter End Average Annual Total Returns as of 12/31/2021

Expense ratios as stated in the most recent prospectus. The Adviser of the Global Luxury Goods has contractually limited, through April 30, 2022 total fund operating expenses (exclusive of acquired fund fees and expenses of 0.00%, extraordinary expenses, taxes, brokerage commissions and interest, and advisory fee performance adjustments (0.22%) to not exceed 1.80%. Total annual expenses after reimbursement were 1.80%.

Performance data quoted above is historical. Past performance is no guarantee of future results. Results reflect the reinvestment of dividends and other earnings. For a portion of periods, the fund had expense limitations, without which returns would have been lower. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Performance does not include the effect of any direct fees described in the fund’s prospectus which, if applicable, would lower your total returns. Performance quoted for periods of one year or less is cumulative and not annualized. Obtain performance data current to the most recent month-end at www.usfunds.com or 1-800-US-FUNDS.

The S&P Global Luxury Index is comprised of 80 of the largest publicly-traded companies engaged in the production or distribution of luxury goods or the provision of luxury services that meet specific investibility requirements.

Companies in the consumer discretionary sector are subject to risks associated with fluctuations in the performance of domestic and international economies, interest rate changes, increased competition and consumer confidence. The performance of such companies may also be affected by factors relating to levels of disposable household income, reduced consumer spending, changing demographics and consumer tastes, among others.

Top 10 Equity Holdings as of 12-31-2021

Industry Breakdown as of 12-31-2021

Regional Breakdown as of 12-31-2021

Growth of $10,000 Over 10 Years as of 12/31/2021

The chart illustrates the performance of a hypothetical $10,000 investment made in the fund during the depicted time frame, compared to its benchmark index. Figures include reinvestment of capital gains and dividends, but the performance does not include the effect of any direct fees described in the fund’s prospectus (e.g., short-term trading fees) which, if applicable, would lower your total returns.

Month End Average Annual Total Returns as of 12/31/2021

Quarter End Average Annual Total Returns as of 12/31/2021

Expense ratios as stated in the most recent prospectus. The Adviser of the Gold & Precious Metals Fund has voluntarily limited total fund operating expenses (exclusive of acquired fund fees and expenses of 0.03%, extraordinary expenses, taxes, brokerage commissions and interest, and advisory fee performance adjustments 0.00% to not exceed 1.90%. With the voluntary expense waiver amount of (0.00%). Total annual expenses after reimbursement were 1.56%.

Performance data quoted above is historical. Past performance is no guarantee of future results. Results reflect the reinvestment of dividends and other earnings. For a portion of periods, the fund had expense limitations, without which returns would have been lower. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Performance does not include the effect of any direct fees described in the fund’s prospectus which, if applicable, would lower your total returns. Performance quoted for periods of one year or less is cumulative and not annualized. Obtain performance data current to the most recent month-end at www.usfunds.com or 1-800-US-FUNDS.

The FTSE Gold Mines Index Series encompasses all gold mining companies that have a sustainable and attributable gold production of at least 300,000 ounces a year, and that derive 75% or more of their revenue from mined gold.

For the year ended December 31, 2020, the World Precious Minerals Fund fell 14.19% percent, underperforming its benchmark. The fund’s benchmark, the NYSE Arca Gold Miners Index, declined 8.93 percent on a total return basis. See complete fund performance here.

Performance data quoted represents past performance. Past performance does not guarantee future results. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost.

The strategy of the World Precious Minerals Fund favors junior exploration and development stocks and mid-tiered producing stocks. These lower-capitalization stocks have historically outperformed senior gold mining companies over longer periods, as senior gold miners have typically acquired proven assets of junior gold companies rather than explored for new mining projects with capital-constrained budgets.

Strengths

• Chalice Mining Ltd. was the largest contributor to the performance of the fund with its precious polymetallic discovery just outside of Perth. Chalice Mining is not a member of the NYSE Arca Gold Miners Index.
• The second best performer in 2021 was Arizona Metals, which acquired a property in Arizona that Exxon has calculated is a significant resource, but the presence of zinc versus copper led Exxon to walk away as there were metallurgical issues at the time involving separating the zinc from the gold. Today this type of metallurgical separation of zinc and gold is well established.
• The third best contributor was CopperBank Resources, which rallied strong with the move in copper. CopperBank Resources is not a member of the NYSE Arca Gold Miners Index.

Weaknesses

• Nano One Materials was our biggest burden in 2021, following a strong showing in the prior year. In the fourth quarter, Nano One Materials noted it was moving to the next stage with a major automotive company to evaluate the commercialization of its propriety lithium cathode design.
• Being underweight Newmont to own other smaller capitalization companies was the second largest drag on performance.
• Not owning any Franco-Nevada was our third largest impact on performance relative to the benchmark. Swapping out of Metalla Royalty and Streaming would have been a good move in hindsight, but relative valuation today will drive our investment decisions.

Opportunities

• Industry consolidation began to take place in more earnest this year. Size matters, and that what may have been behind Agnico Eagle Mines’ bid to buy Kirkland Lake Gold. There certainly are operational synergies that can be garnered from the deal, but it does give Agnico access to the Detour Lake assets which are likely to be long lived but could see some issues if energy prices rise too much.
• In another move to acquire more assets in mining jurisdictions, Newcrest Mining agreed to buy Pretium Resources Inc. in a cash and shares deal valuing the Canadian gold producer at about $2.8 billion. Newcrest and others were patient to wait out the story and really see what the mine was capable of before inking the deal. This gives Newcrest a strategic view to other major mineral discoveries in the region.
• Scarcity? Is that the new issue in the industry that the majors are contending with? Can’t find enough +10-year life mines that can produce 300,000 ounces of gold per year? That can be done by exploring or buying ounces in the ground or in the most recent example, Kinross Gold buying Great Bear, they have bought exploration. What is fascinating is that there is no publicly calculated resource on the discovery, but the drill data is available on their website, so it really wasn’t a black box acquisition. But is does signal the gold industry may be more willing to do deals more aggressively in the future. There are plenty of good assets in the junior miners and the explorers too that are likely to be on the wish list for next year!

Threats

• Bitcoin remains a key competitor to gold. Like gold, Bitcoin functions as an absolute store of value. Most analysts expect gold to gradually decline over the next few years. The post-pandemic recovery, Fed tapering, and a stronger dollar will all weigh on the metal, which will fall to $1,700 an ounce by year-end and then decline further in 2022, UBS Group AG strategists including Wayne Gordon and Giovanni Staunovo said in a note. However, new government regulation over Bitcoin and other electronically traded crypto assets could change their desirability for ownership.
• Exchange-traded funds have been selling gold, with this year’s net sales being 9.24 million ounces, according to data compiled by Bloomberg. Total gold held by ETFs fell to 97.82 million ounces. Rising real rates are the ultimate threat to gold prices but there is great concern that the U.S. can withstand rising rates. Who can take the medicine? It took 20-years to leave Afghanistan, how easy is it going to be to walk a from loose monetary policy?
• Demand for platinum group metals (PGMs) is facing decline due to the growth of battery electric vehicles. Sibanye Stillwater CEO Neal Froneman said palladium could decline to about $1,000 an ounce after 2025 as automakers switch to using more platinum in auto catalysts used to curb pollution from vehicles. If platinum prices rise with a pickup in fuel cell use, the change in the two PGMs prices may balance out somewhat on their income statement.

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 index benchmark value was 500.0 at the close of trading on December 20, 2002.

Fund portfolios are actively managed, and holdings may change daily. Holdings are reported as of the most recent quarter-end. Holdings in the World Precious Minerals Fund as a percentage of net assets as of 12/31/2021: Chalice Mining Ltd. 0.00%, Airzona Metals Corp. 5.45%, Exxon Mobil Corp. 0.00%, CopperBank Resources Corp. 2.72%, Nano One Materials Corp. 8.35%, Newmont Corp. 0.36%, Franco-Nevada Corp. 0.00%, Metalla Royalty & Streaming Ltd. 0.39%, Agnico Eagle Mines Ltd. 0.00%, Kirkland Lake Gold Ltd. 0.00%, Newcrest Mining Ltd. 0.00%, Kinross Gold Corp. 0.00%, Great Bear Resources Inc. 0.00%, Sibanye Stillwater Ltd. 0.00%.

Standard Disclosure

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. Foreside Fund Services, LLC, Distributor. U.S. Global Investors is the investment adviser.

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor.

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.

Top 10 Equity and Debt Holdings as of 12-31-2021

Industry Breakdown as of 12-31-2021

Regional Breakdown as of 12-31-2021

Growth of $10,000 Over 10 Years as of 12/31/2021

The chart illustrates the performance of a hypothetical $10,000 investment made in the fund during the depicted time frame, compared to its benchmark index. Figures include reinvestment of capital gains and dividends, but the performance does not include the effect of any direct fees described in the fund’s prospectus (e.g., short-term trading fees) which, if applicable, would lower your total returns.

Month End Average Annual Total Returns as of 12/31/2021

Quarter End Average Annual Total Returns as of 12/31/2021

Expense ratios as stated in the most recent prospectus. The Adviser of the World Precious Minerals Fund has voluntarily limited total fund operating expenses (exclusive of acquired fund fees and expenses of 0.02%, extraordinary expenses, taxes, brokerage commissions and interest, and advisory fee performance adjustments (0.00%) to not exceed 1.90%. Total annual expenses after reimbursement were 1.81%.

Performance data quoted above is historical. Past performance is no guarantee of future results. Results reflect the reinvestment of dividends and other earnings. For a portion of periods, the fund had expense limitations, without which returns would have been lower. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Performance does not include the effect of any direct fees described in the fund’s prospectus which, if applicable, would lower your total returns. Performance quoted for periods of one year or less is cumulative and not annualized. Obtain performance data current to the most recent month-end at www.usfunds.com or 1-800-US-FUNDS.

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 index benchmark value was 500.0 at the close of trading on December 20, 2002.

For the year ended December 31, 2021, the Global Resources Fund gained 11.62%, underperforming the fund’s benchmark, the S&P Global Natural Resources Index (Net Total Return), which gained 25.20%. See complete fund performance here.

Performance data quoted represents past performance. Past performance does not guarantee future results. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost.

Energy prices surged more than expected with the reopening of the economy during various virus waves. Supply issues also compounded the energy boom, and the attitude of producers seemed to shift from abundance to limited supplies as futured investment could be curtailed in the future. This hit the renewable energy producers this year as fast money pivoted leveraged oil.

Strengths

• The three strongest commodities for the year were coal, tin and crude palm oil, up 160%, 92% and 70%, respectively. Steam coal moved up gradually over the course of the year until November, and the price doubled overnight on international steam coal demand for electricity. The price of tin soared this year on supply constraints with Covid-19 lockdowns in Malaysia and Indonesia, major producers of the metal. Palm oil remains strong as cooking oil outside of the U.S., but it is in a wide array of processed food products within the U.S.
• The three best sector calls for the fund were an overweight position in precious metals, underweight position in agriculture chemicals and underweight in pulp and paper. The fund’s stock selection within these three sectors outperformed the stock selection of the benchmark. Forest products were also held in the funds and were the fourth largest contributor to our performance, but the benchmark does not include this sector.
• The three best dollar performing stock decisions were Filo Mining, Standard Lithium and CopperBank Resources. All three of these companies have one thing is common: a clean energy future. Filo Mining pulled a company making drill intercept of 858 meters of 1.80 copper equivalent, with the last 163 meter of the intercept running 5.43 percent copper equivalent. Copper is increasing demand from electric motors. Standard Lithium rose on the strong prices increases for lithium carbonate demand coming out of China. CopperBank rallied strong with the move in copper.

Weaknesses

• The three weakest commodities for the year were iron ore, uranium and lead. Iron ore was down 23.32% but uranium and lead were positive for the year with 12.15% and 13.32% gains, respectively. Iron ore demand was curtailed by China as it sought to lower energy demand and pollution. Otherwise, sales of all the other major commodities were positive for the year. Uranium had a spike in the third quarter but still sustained double-digit returns for the year. Lead generally lagged other base metals with no unique drivers.
• The fund’s sector overweight positions in electrical products, underweight integrated oil, and market weight agriculture commodities underperformed the benchmark’s subsectors. The benchmark has no exposure to solar wind or renewables, but these sectors underperformed with the greater-than-expected gains in energy prices, which is why we underperformed the integrated oil companies. The benchmark had better stock selection while our biggest producer of plant protein was slow to ramp up its new production facility to commercial scale during the year.
• Our holdings in Burcon NurtraScience, Canadian Solar and Siemens Gamesa Renewable Energy were the biggest detractors from fund performance. As mentioned above, Burcon NurtraScience which owns the technology portfolio for plant-based proteins, spent most of the year scaling up production at its new facility. Canadian Solar had supply issues on solar panels arriving out of China while Siemens Gamesa warned the market that margins were being eroded by higher input costs for the wind turbines.

Opportunities

• Saudi Arabia said global oil production could drop 30% by the end of the decade due to falling investment in fossil fuels. “We’re heading toward a phase that could be dangerous if there’s not enough spending on energy,” Oil Minister Abdulaziz bin Salman said in Riyadh. The result could be an “energy crisis,” he said. Raymond James’s bullish oil view over the next few years is supported by (1) low global inventories, (2) visible recovery in demand, (3) the coming collapse in Organization of the Petroleum Exporting Countries (OPEC) spare capacity and (4) the need for a higher price to further incentivize U.S. supply.
• Aluminum prices rose about 43% in 2021. This is due to increases in costs of energy and raw materials used to make the metal and output cuts by the biggest producer, China. China’s production, already curbed by a government anti-pollution drive, has been further hit by power shortages gripping the country. China’s measures to control energy use and prevent pollution are setting up a tighter market. Demand will exceed production by 1.5 million tons in 2022. Aluminum is heading for a seismic shift as a long-running supply glut starts to fade, setting the stage for shortages and a price rally that could run for years.
• Lumber prices moved up about 60% in 2021, but in hindsight it was a roller coaster ride. Lumber prices soared about 140% until about halfway into May then tumbled about 73%, bottoming in mid-August, only to go on another 143% rally to close the year, still with a nice gain. Lumber could remain strong in the future if interest rates remain low with modest growth.

Threats

• Cotton, corn, sugar, soybeans and wheat all jumped in price from cotton at the top with a 50% gain and with wheat pulling up the low end with a 20% gain. Global fertilizer inventory levels are not just tight, but for many countries are simply unavailable and/or too expensive for small traders. This is set to intensify because of shuttered nitrogen production in the European Union (EU) from high gas costs, along with the export bans imposed by China and Russia. Crop yields could be impacted, resulting in potential food supply issues and ultimately political instability.
• Cracks are emerging in the global solar industry, threatening to flatten its growth trajectory just as the world needs clean power more than ever. A barrage of obstacles is slamming the sector, with rising materials costs, forced labor accusations and a worsening trade war all hitting at once. 2021 marked the first time solar costs have increased since 2007. “This year is a perfect storm,” said Xiaojing Sun, head of solar research at Wood Mackenzie, pointing to a triple whammy of contributing factors: a sharp rise in component prices, tariffs and sanctions, and soaring shipping costs. Polysilicon, an essential component for solar panels, tripled in price in 2021, with increased demand and power shortages in China responsible for the rise.
• The Baltic Dry Index, which tracks the cost to ship major raw materials, including coal and iron ore by sea, climbed to its highest level since late 2009. The index has been rising since bottoming out in mid-2020 due to strong demand on increased consumer spending, as well as supply constraints related to COVID-19 and a lack of investment in new capacity following the last down cycle, according to The Economist. Although the strong demand is a positive signal for metals end-use, rising shipping prices and constraints could signal further logistical challenges and cost inflation.

The S&P Global Natural Resources Index includes 90 of the largest publicly traded companies in natural resources and commodities businesses that meet specific investability requirements, offering investors diversified, liquid and investable equity exposure across 3 primary commodity-related sectors: Agribusiness, Energy, and Metals & Mining. The Baltic Dry Index tracks the price of transporting dry bulk cargo like cement, coal, iron ore, and grain on bulk freighters.

Fund portfolios are actively managed, and holdings may change daily. Holdings are reported as of the most recent quarter-end. Holdings in the Global Resources Fund as a percentage of net assets as of 12/31/2021: Filo Mining Corp. 4.46%, Standard Lithium Ltd. 0.00%, CopperBank Resources Corp. 0.00%, Burcon NutraScience Corp. 1.30%, Canadian Solar Inc. 1.61%, Siemens Gamesa Renewable Energy S.A. 1.23%.

Standard Disclosure
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. Foreside Fund Services, LLC, Distributor. U.S. Global Investors is the investment adviser.

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

Top 10 Equity and Debt Holdings as of 12-31-2021

Industry Breakdown as of 12-31-2021

Regional Breakdown as of 12-31-2021

Growth of $10,000 Over 10 Years as of 12/31/2021

The chart illustrates the performance of a hypothetical $10,000 investment made in the fund during the depicted time frame, compared to its benchmark index. Figures include reinvestment of capital gains and dividends, but the performance does not include the effect of any direct fees described in the fund’s prospectus (e.g., short-term trading fees) which, if applicable, would lower your total returns.

Month End Average Annual Total Returns as of 12/31/2021

Quarter End Average Annual Total Returns as of 12/31/2021

For the year ended December 31, 2021, the Emerging Europe Fund gained 11.94%, while the benchmark, the MSCI Emerging Markets Europe 10/40 Index, appreciated 13.14%. See complete fund performance here.

Performance data quoted represents past performance. Past performance does not guarantee future results. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost.

Czech, Russian, Polish, Hungarian and Greek stocks recorded gains while Turkish equites underperformed mostly due to currency losses. On the sector level, energy, utilities, industrials and materials were the top performers, while consumer discretionary, financials, health care, consumer staples, telecommunication and information technology underperformed.

Strengths

• The fund’s exposure to Western Europe and currency hedges had the most positive impact on the fund’s performance relative to its benchmark.
• The fund’s underweight position in information technology and stock selection in materials had the most positive effect on the fund’s performance relative to its benchmark.
• Lukoil, a Russian oil producer, made the largest single contribution to the performance of the fund.

Weaknesses

• The fund’s overweight position in Turkey had the most negative impact on the fund’s performance relative to its benchmark. However, the strategy to hedge the currency offset losses.
• The fund’s underweight position in the energy sector and stock selection in financials had the most negative effect on the fund’s performance relative to its benchmark.
• Turkiye Is Bankasi Anonim Sirketi, a Turkish bank, was the single worst contributor to the performance of the fund.

Opportunities

• The World Health Organization (WHO) suggested 2022 may see the end of the Covid pandemic as the world knows the virus very well and has all the tools to fight it. Comments come as recent studies suggest Omicron may lead to lower hospitalization rates than previous variants.
• Goldman Sachs predicted a new high in oil demand in 2022, and again in 2023. Oil demand was already at record levels before the latest Omicron variant hit, and furthermore, demand for air travel should continue to recover, Damien Courvalin, the investment bank’s head of energy research, said. Countries producing this commodity should benefit from higher prices. Russia could continue to strengthen its balance sheet next year and the country’s commodity producers should continue to pay record high dividends assuming there will be no escalation of tensions on the border with Ukraine.
• According to Goldman Sachs, Morgan Stanley and JPMorgan, emerging market assets are set to rise in 2022 as moderating inflation and accelerating growth trigger gains, but it will not happen until the second half of 2022. Analysts are looking for a Chinese equity rally as well as gains in local currency bonds in countries such as Poland, the Czech Republic and Hungary.

Threats

• A policy mistake by central banks due to surging inflation could present the biggest risk for global stocks in 2022, according to a survey of more than one hundred fund managers. Monetary policy is the top concern for nearly 37% of those surveyed, followed by runaway inflation.
• Turkey experienced extreme volatility in equities and currency at the end of 2021. In December, the Borsa Istanbul Stock Exchange went from a record high to a bear market in less than a week. The Turkish lira was the world’s worst performing currency. Its government announced measures to protect its currency, but volatility in Turkish markets could continue in 2022.
• Eastern Europe may experience a spike in Covid cases due to low vaccination rates compared to developed markets. At the end of the year, Bulgaria had the lowest such rate in the EU; just 26.4% were fully inoculated.

The MSCI Emerging Markets Europe 10/40 Index is a free float-adjusted market capitalization index that is designed to measure equity performance in the emerging market countries of Europe (Czech Republic, Greece, Hungary, Poland, Russia and Turkey). The index is calculated on a net return basis (i.e., reflects the minimum possible dividend reinvestment after deduction of the maximum rate withholding tax). The index is periodically rebalanced relative to the constituents’ weights in the parent index.

The economic sentiment indicator (ESI) is a composite indicator produced by the Directorate General for Economic and Financial Affairs (DG ECFIN) of the European Commission. Its objective is to track GDP growth at Member states, EU and euro area levels.

Holdings may change daily. Holdings are reported as of the most recent quarter-end. Holdings are reported as of the most recent quarter-end. Holdings in the Emerging Europe Fund as a percentage of net assets as of 12/31/2021: Lukoil PJSC 7.27%, Turkiye Is Bankasi Anonim Sirketi 0.00%

Standard Disclosure
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. Foreside Fund Services, LLC, Distributor. U.S. Global Investors is the investment adviser.

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% 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.

Top 10 Equity and Debt Holdings as of 12-31-2021

Industry Breakdown as of 12-31-2021

Regional Breakdown as of 12-31-2021

Growth of $10,000 Over 10 Years as of 12/31/2021

The chart illustrates the performance of a hypothetical $10,000 investment made in the fund during the depicted time frame, compared to its benchmark index. Figures include reinvestment of capital gains and dividends, but the performance does not include the effect of any direct fees described in the fund’s prospectus (e.g., short-term trading fees) which, if applicable, would lower your total returns.

Month End Average Annual Total Returns as of 12/31/2021

Quarter End Average Annual Total Returns as of 12/31/2021

Expense ratios as stated in the most recent prospectus. The Adviser of the Emerging Europe Fund has voluntarily limited total fund operating expenses (exclusive of acquired fund fees and expenses of 0.01%, extraordinary expenses, taxes, brokerage commissions and interest, and advisory fee performance adjustments (0.02%) to not exceed 2.85%. With the voluntary expense waiver amount of (0.16%), total annual expenses after reimbursement were 2.67%.

Performance data quoted above is historical. Past performance is no guarantee of future results. Results reflect the reinvestment of dividends and other earnings. For a portion of periods, the fund had expense limitations, without which returns would have been lower. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Performance does not include the effect of any direct fees described in the fund’s prospectus which, if applicable, would lower your total returns. Performance quoted for periods of one year or less is cumulative and not annualized. Obtain performance data current to the most recent month-end at www.usfunds.com or 1-800-US-FUNDS.

The MSCI Emerging Markets Europe 10/40 Index (Net Total Return) is a free float-adjusted market capitalization index that is designed to measure equity performance in the emerging market countries of Europe (Czech Republic, Hungary, Poland, Russia, and Turkey). The index is calculated on a net return basis (i.e., reflects the minimum possible dividend reinvestment after deduction of the maximum rate withholding tax). The index is periodically rebalanced relative to the constituents’ weights in the parent index.

For the year ended December 31, 2021, the Near-Term Tax Free Fund showed a negative return of 0.46%, underperforming its benchmark, the Barclays 3-Year Municipal Bond Index, which gained 0.40%. See complete fund performance here.

Performance data quoted represents past performance. Past performance does not guarantee future results. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost.

2021 started off with concerns that the ongoing pandemic would create stress for the finances of some municipal issuers and lead to credit downgrades. That expectation went dead when Washington threw a life raft to the municipal bond market. Economic growth sprang back and was more robust than expected. Consequently, municipal bonds performed better than expected.

Strengths

• The fund’s allocation to bonds from Illinois, California and Massachusetts outperformed.
• The fund benefited from its allocation to higher education, single-family housing and multifamily housing bonds, all of which outperformed.
• The fund’s allocation in the one- to three-year maturities and 10-years+ areas of the yield curve outperformed.

Weaknesses

• The fund’s allocation to bonds from Texas, New York and Florida underperformed. Outside of California, these states are the biggest issuers of municipal debt.
• The fund’s exposure to school districts, transportation and water bonds underperformed.
• The fund’s allocation in the zero-year to one-year areas of the yield curve underperformed followed by the five- to seven-year as the worst performers.

Outlook

The outlook for 2022 is that both spreads and yields should increase modestly. This may result in near-term price declines, but we expect there will be opportunities for higher yields. Approximately, 25% of the Near-Term Tax Free Fund’s holdings will mature during 2022, allowing us to reposition the proceeds into higher-yielding municipal bonds for the coming years.

The $1 trillion infrastructure bill passed by Congress includes major investments in traditional infrastructure, such as roads, bridges, rail and water utilities. It will also address the energy transmission, combat climate change and expand broadband internet access. This legislation should support municipal credits in the coming years. Airport upgrades and water and sewer systems with aging infrastructure that need to comply with environmental requirements are likely to see their credit ratings improve. Credit concerns should remain low with few defaults.

The Barclays 3-Year Municipal Bond Index is a total return benchmark designed for short-term municipal assets. The index includes bonds with a minimum credit rating BAA3, are issued as part of a deal of at least $50 million, have an amount outstanding of at least $5 million and have a maturity of 2 to 4 years.

Standard Disclosure
Please consider carefully a fund’s investment objectives, risks, charges and expenses. For this and other important information, obtain a fund prospectus by calling 1-800-US-FUNDS (1-800-873-8637). Read it carefully before investing. Foreside Fund Services, LLC, Distributor. U.S. Global Investors is the investment adviser.

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor.

Bond funds are subject to interest-rate risk; their value declines as interest rates rise. Though the Near-Term Tax Free Fund seeks minimal fluctuations in share price, it is subject to the risk that the credit quality of a portfolio holding could decline, as well as risk related to changes in the economic conditions of a state, region or issuer. These risks could cause the fund’s share price to decline. Tax-exempt income is federal income tax free. A portion of this income may be subject to state and local taxes and at times the alternative minimum tax. The Near-Term Tax Free Fund may invest up to 20 percent 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.

Top 10 Holdings as of 12-31-2021

Industry Breakdown as of 12-31-2021

Top 5 States as of 12-31-2021

Growth of $10,000 Over 10 Years as of 12/31/2021

The chart illustrates the performance of a hypothetical $10,000 investment made in the fund during the depicted time frame, compared to its benchmark index. Figures include reinvestment of capital gains and dividends, but the performance does not include the effect of any direct fees described in the fund’s prospectus (e.g., short-term trading fees) which, if applicable, would lower your total returns.

Month End Average Annual Total Returns as of 12/31/2021

Quarter End Average Annual Total Returns as of 12/31/2021

Expense ratios as stated in the most recent prospectus. The Adviser of the Near-Term Tax Free Fund has contractually limited, through April 30, 2022, the total fund operating expenses (exclusive of acquired fund fees and expenses 0.02%, extraordinary expenses, taxes, brokerage commissions and interest) to not exceed 0.45%. Total annual expenses after the waiver of (0.64%) were 0.45%. The fund’s yield calculation is based on the holdings’ yield to maturity for prior 30 days; distribution may differ.

Performance data quoted above is historical. Past performance is no guarantee of future results. Results reflect the reinvestment of dividends and other earnings. For a portion of periods, the fund had expense limitations, without which returns would have been lower. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Performance does not include the effect of any direct fees described in the fund’s prospectus which, if applicable, would lower your total returns. Performance quoted for periods of one year or less is cumulative and not annualized. Obtain performance data current to the most recent month-end at www.usfunds.com or 1-800-US-FUNDS.

The Barclay 3-Year Municipal Bond Index is a total return benchmark designed for long-term municipal assets. The index includes bonds with a minimum credit rating BAA3, are issued as part of a deal of at least $50 million, have an amount outstanding of at least $5 million and have a maturity of 8 to 12 years.

The U.S. Government Securities Ultra-Short Bond Fund returned a negative 0.43% for the year ended December 31, 2021, underperforming its benchmark, the Barclays U.S. Treasury Bills 6-9 Months Total Return Index, which returned 0.05%. See complete fund performance here.

Performance data quoted represents past performance. Past performance does not guarantee future results. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost.

Fund expenses were a burden to achieving a positive yield. The zero- to one-year tranche had slightly positive returns, but the main source of underperformance came from one- to three-year maturities while three- to five-year maturities lost some ground too.

Investment Highlights

Yields fluctuated as waves of Covid-19 disrupted the U.S. and world. Yields initially looked to climb in the first quarter but soon began a downward drift that would plunge as virus cases surged as we entered the summer. Benchmark yields rose to just under 5 basis points (bp) and held those levels into September. Inflation finally hit home as we entered the fourth quarter and the Federal Reserve was no longer talking about transitory inflation. At subsequent Fed meetings, the expectations of a more hawkish tone prevailed.  By the end of November, the benchmark’s yield had climbed to 10 bp but then surged to 20 bp by yearend.

Outlook

The outlook is that the Fed will raise interest rates three times in 2022, potentially as many as four times, according to Goldman Sachs. Liftoff in rate hikes may come as early as March 2022. The currently circulating Omicron virus will likely complicate the timing of rate hikes. Wage pressure on employers is likely to gain more momentum as employees have more choices concerning where they want to be employed. Short-term rates are likely to gain the most from a more hawkish interest rate stance. It will likely be difficult to get long rates up much in 2022, more of a curve-flattening scenario. Real yields may remain negative.

The Barclays U.S. Treasury Bills 6-9 Months Total Return Index tracks the performance of U.S. Treasury Bills with a maturity of six to nine months. Gross domestic product is the total value of goods produced and services provided in a country during one year. The personal consumption expenditures index reflects changes in the prices of goods and services purchased by consumers in the U.S.

A basis point is one hundredth of a percent or equivalently one percent of one percent or one ten thousandth.

Standard Disclosure

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. Foreside Fund Services, LLC, Distributor. U.S. Global Investors is the investment adviser.

Bond funds are subject to interest-rate risk; their value declines as interest rates rise.

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor.

Issuer Breakdown as of 12-31-2021

U.S. Government Securities Ultra-Short Bond Fund
Growth of $10,000 Over 10 Years as of 12/31/2021

The chart illustrates the performance of a hypothetical $10,000 investment made in the fund during the depicted time frame, compared to its benchmark index. Figures include reinvestment of capital gains and dividends, but the performance does not include the effect of any direct fees described in the fund’s prospectus (e.g., short-term trading fees) which, if applicable, would lower your total returns.

Month End Average Annual Total Returns as of 12/31/2021

Quarter End Average Annual Total Returns as of 12/31/2021

Expense ratios as stated in the most recent prospectus. The Adviser of the U.S. Government Securities Ultra-Short Bond Fund has voluntarily limited total fund operating expenses (exclusive of acquired fund fees and expenses, extraordinary expenses, taxes, brokerage commissions and interest) to not exceed 0.45%. With the voluntary expense waiver amount of (0.60%) total annual expenses after reimbursement were 0.45%. U.S. Global Investors, Inc. can modify or terminate the voluntary limit at any time, which may lower a fund’s yield or return. The fund’s yield calculation is based on the holdings’ yield to maturity for prior 30 days; distribution may differ.

Performance data quoted above is historical. Past performance is no guarantee of future results. Results reflect the reinvestment of dividends and other earnings. For a portion of periods, the fund had expense limitations, without which returns would have been lower. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Performance does not include the effect of any direct fees described in the fund’s prospectus which, if applicable, would lower your total returns. Performance quoted for periods of one year or less is cumulative and not annualized. Obtain performance data current to the most recent month-end at www.usfunds.com or 1-800-US-FUNDS.