Our Mutual Funds

The Global Luxury Goods Fund lost 9.47% in the first quarter of 2022, underperforming its benchmark, the S&P 1500 Composite Index, which gained 4.64%. The fund underperformed its index by 7.43% mostly due to the fund’s overweight position in consumer discretionary. However, the fund beat the S&P Global Luxury Index by 2.61%, which declined by 12.07%. 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.

Strengths

• The fund’s underweight position in information technology and overweight position in materials had the most positive effect on the fund’s performance relative to the index. Within information technology, the fund’s underweight position in internet software and services worked well. Shares of Meta Platforms declined by 33.89%, and USLUX had no exposure to it. In materials, overweighting gold producers proved to benefit the fund’s performance relative to its index. Shares of Royal Gold gained 35% and Franco-Nevada jumped 15.6%.
• The fund’s defensive positioning in the first quarter had a positive effect on the fund’s performance. The fund increased its allocation to gold holdings, increased cash level and began hedging its exposure to euro currency.
• The strongest contributor to fund performance was Amazon, contributing a positive 0.62% to the fund’s overall performance. In March, Amazon’s board approved a 20-for-1 stock split and authorized the company to make a stock buyback of up to $100 billion.

Weaknesses

• The fund’s overweight position in consumer discretionary had the most negative effect on the fund’s performance relative to the S&P 1500 Index. The fund’s overweight position in apparel and the auto industry hurt its performance relative to its index. Comparing the U.S. Global Luxury Goods Fund to the broad S&P 1500 Index is not an apples-to-apples comparison, however. The luxury fund, as its name suggests, invests a majority of its assets in consumer discretionary luxury goods while S&P 1500 index allocated only 15% of its assets in consumer discretionary. The S&P Global Luxury Index presets a better comparison, as this index allocates more than 80% of its assets in consumer discretionary. Luxury stocks corrected at the beginning of the year and more weakness followed mid-February after war in Europe erupted, and China announced a spike in Covid cases, placing major cities on full lockdowns.
• The fund’s stock selection in consumer staples had the second most negative effect on the fund’s performance relative to the index. The overweight position in personal care products did not prove to work well. Shares of Estee Lauder declined 26% in the quarter. Bank of America downgraded the company to a Neutral ranking from a Buy at the beginning of January.
• The biggest detractor to fund performance was Estee Lauder, contributing 1.53% to the fund’s overall decline. Shares fell 26% in the first quarter, despite the company reporting strong results at the beginning of February. Estee Lauder reported net sales of $5.54 billion for its second quarter ended December 31, 2021, an increase of 14% from $4.85 billion in the prior-year period. Net sales grew in every region and product category.

Outlook

Following a stronger recovery year in 2021, luxury goods corrected in the first quarter of 2022. There are a few reasons for the selloff. First, the markets are expecting tightening monetary conditions. Central banks around the world started to hike rates and withdraw from aggressive bond-buying programs. The Federal Reserve had its first small hike of 25 basis points in March, and another larger hike of 50 basis points may follow in May. The European Central Bank (ECB) announced an end to its bond buying program in June, and rate hikes should follow later in the year.

Second, the war in Europe will put growth pressure on global economies. Spiking inflation and volatile commodity prices have compelled analysts to raise the prospect of recession in the United Kingdom, the U.S. and across Europe.

Last, China, which accounts for about 20% of global luxury sales, experienced another rapid wave of Covid infections. Shanghai, a city of 26 million people, was put on lockdown, and soon afterwards lockdowns spread to other cities in order to take control of the outbreak.

The recent pullback in the luxury sector looks overdone, and we believe a recovery should follow. Nevertheless, economic and geopolitical tensions may put further pressure on the industry. The war in Europe has affected many countries. The biggest worry for companies is rising costs, especially in the energy sector.

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. 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. A basis point, or bp, is a common unit of measure for interest rates and other percentages in finance. One basis point is equal to 1/100th of 1%, or 0.01% (0.0001).

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 3/31/2022: Meta Platforms Inc. 0.00%, Royal Gold Inc. 0.91%, Franco-Nevada Corp. 0.94%, Amazon.com Inc. 4.79%, The Estee Lauder Cos. Inc. 4.07%,

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. 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. A basis point, or bp, is a common unit of measure for interest rates and other percentages in finance. One basis point is equal to 1/100th of 1%, or 0.01% (0.0001).

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 3/31/2022: Meta Platforms Inc. 0.00%, Royal Gold Inc. 0.91%, Franco-Nevada Corp. 0.94%, Amazon.com Inc. 4.79%, The Estee Lauder Cos. Inc. 4.07%,

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 03-31-2022

Industry Breakdown as of 03-31-2022

Regional Breakdown as of 03-31-2022

Growth of $10,000 Over 10 Years as of 03/31/2022

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 04/30/2022

Quarter End Average Annual Total Returns as of 03/31/2022

Expense ratio as stated in the most recent prospectus. The Adviser of the Global Luxury Goods has contractually limited, through April 30, 2023 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 0.13% ) to not exceed 1.80%. Total annual expenses after reimbursement were 1.80%.

The Adviser of the Global Luxury Goods has contractually limited, through April 30, 2023 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 0.13% ) to not exceed 1.80%. Total annual expenses after reimbursement were 1.80%.

The Adviser of the Emerging Europe Fund has voluntarily limited 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 (0.18%) ) to not exceed 2.85%. With the voluntary expense waiver amount of (0.00%), total annual expenses after reimbursement were 2.67%.

The Adviser of the World Precious Minerals Fund has voluntarily limited 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 0.18% ) to not exceed 1.90%. Total annual expenses after reimbursement were 1.75%.

The Adviser of the China Region Fund has voluntarily limited 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 (0.16%) ) to not exceed 2.55%. With the voluntary expense waiver amount of (0.75%), total annual expenses after reimbursement were 2.55%.

The Adviser of the Near-Term Tax Free Fund has contractually limited, through April 30, 2023, the total fund operating expenses (exclusive of acquired fund fees and expenses 0.01%, extraordinary expenses, taxes, brokerage commissions and interest) to not exceed 0.45%. Total annual expenses after the waiver of (0.68%) were 0.45%. The fund’s yield calculation is based on the holdings’ yield to maturity for prior 30 days; distribution may differ.

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 (0.61%) 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.

The Adviser of the Global Resources 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 0.08% ) to not exceed 1.90%. With the voluntary expense waiver amount of (0.00%), Total annual expenses after reimbursement were 1.82%.

U.S. Global Investors, Inc. can modify or terminate the voluntary limits at any time, which may lower a fund’s yield or return.

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. High double-digit returns are attributable, in part, to unusually favorable market conditions and may not be repeated or consistently achieved in the future.

The World Precious Minerals Fund had a total return of negative 1.55% in the first quarter of 2022, underperforming its benchmark, the NYSE Arca Gold Miners Index, which delivered a return of 20.87 percent. 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.

While we may be at the start of a prolonged rally in gold, the emotions to buy have only touched the highly liquid senior gold miners have and have not gone down market to own the junior miners and explorers. We are seeing acquisitions pick up, but as we experienced in 2019, the fund also lagged by 2,000 basis points (bp) only to surpass the benchmark in 2020.

Strengths

• The biggest contributor to fund performance was our weighting in Reunion Gold. With an average fund weighting of 0.98% for the quarter, the stock gained 141.99% and contributed 77-bp to the fund. Reunion Gold is not a member of the benchmark, the NYSE Arca Gold Mines Index. Over the last 12 months, the management team at Reunion has had significant success in outlining a gold discovery that analysts who have visited the site in Guyana believe could be a 3- to 5-million-ounce gold discovery.

• The second largest contributor to fund performance was Asante Gold, which gained 56.67%. With an average fund weighting of 2.54%, the company contributed 75bp. Asante began production during the quarter with the restart of its Bibiani mine in Ghana. The Asante team is from Cardinal Resources, which we previously owned and went through a successful takeover of their company.

• The third best contributor to fund performance was our overweighting of K92 Mining. With an average fund weighting of 7.97% for the quarter, the stock gained 28.56% and contributed 60bp to the fund. K92 Mining is posed for further production growth, self-funded from current production, and there is significant resource growth potential.

Weaknesses

• The largest detractor from fund performance was our position in Nano One Materials, which averaged 7.97% of the fund and fell 13.84%, detracting 2.85bp from fund performance. Nano One is well capitalized with over $50 million in cash, and it is transitioning more to a growth mode now with the scale up of its facilities and staff. This is to support commercial production of lithium battery cathode through its patented one-pot process that produces cathodes with an internal crystalline structure.
• The second largest detractor from fund performance was our overweighting of TriStar Gold, which fell 8.74%. With an average weighting at 4.68%, TriStar contributed 158bp to the fund’s overall loss. In the past year, G Mining Ventures struck a deal to buy the Tocantinzinho Project in Brazil from Eldorado Gold, and Hochschild Mining purchased Amarillo Gold just in the prior quarter. There are few advanced shovel-ready gold projects available for buyers, and Brazil is open for mining.
• The third largest detractor from fund performance was the underweighting of Newmont Mining, which appreciated 29.03% during the quarter. With the relative weighting at 0.00% to the benchmark weight of 17.46%, the underweighting detracted 138bp from the fund’s relative performance. Our long-term equity anticipation security (LEAP) positions above offset 107bp of the fall in the common shares.

Outlook for Gold and Precious Minerals

Several of the miners in the portfolio achieved exploration successes during the quarter. Aya Gold & Silver Inc. said that it has been granted seven new exploration permits in Morocco. The Canadian miner said the permits were granted by the country’s Ministry of Energy, Mines and Environment, and would increase its position within its Zgounder Regional and Azegour area properties by about 40%. Aya Gold & Silver reported quarterly production from Zgounder of 439,100 ounces, handily beating estimates of 401,700 ounces due to higher throughput and head grade. This put the mine on track for 1.66 million ounces in 2021, well above guidance of 1.2 million ounces.

K92 reported the latest assay results from its ongoing drilling program at the Kora deposit at the Kainantu Mine. These 32 holes once again showcased the high-grade and continuous nature of Kora, with eight intersections exceeding 20 grams per ton of silver, 24 intersections exceeding 10 grams per ton of silver and 41 intersections exceeding five grams per ton of silver.

Arizona Metals Corp. released another round of drilling from its silver-zinc zone at Kay. Four holes were released, including Hole 27, which is outside the historic Exxon resource, the deepest hole drilled to date by the company, and this extends the silver zone depth by 20%. Also, the average drilled grade of the silver zone has increased by 9%, showing grades are improving with tighter spacing.

Roscan Gold reported positive results from an additional 14 diamond drilling and reverse circulation holes totaling 3,066 meters at the Southern Mankouke Zone. Mankouke Discovery Zone, or MS1, confirmed mineralization open at depth and Mankouke Discovery Zone, or MS3, shows a potential high-grade extension to the west.

Silver Tiger reported high-grade assays from drilling, stepping out 900 meters south along the Sooy vein. The company is ramping up to five drills on the property to accelerate work on the extensive, high-grade system.

Compass Gold reported the results of the recently completed drilling at the Old Sam and Dialéké prospects, located on the company’s Sikasso Property in Southern Mali. The first drilling results at the Old Sam target, 40 kilometers south of Tarabala, are highly encouraging. Initial drilling has discovered a shallow zone of low-grade gold.

Brixton Metals announced new assay results from additional surface rock samples on the Trapper Target. Rock grab sample D131206 assayed 135.5 grams per ton of gold and 172 grams per ton of silver. Six rock grab samples returned greater than 10 grams per ton of gold.

Investment trends in the gold industry are making it more difficult for gold companies to grow. CEOs say it’s getting “tougher and tougher” for mines to get approval and to get developed, posing the biggest challenge to spend money.  Higher costs are being cited by miners. Overall, fuel was the most cited area of inflation on operating costs, with upward pressure noted by two thirds of companies. On labor costs, moderate upward pressure has been encountered in the range of 2-5%, marginally above company budgeted inflation expectations with labor tightness commonly noted in Brazil, the U.S. and Canada. While operating and capital cost expectations have generally been higher after second quarter reporting, producer balance sheets are well positioned to absorb the impact of lower-than-expected cash flows. Exploration and mid-tiered gold and precious metal mining companies pulled back the most during the quarter as investors witnessed only gold trended sideways without any upward momentum to lure investors back.

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.

A basis point, or bp, is a common unit of measure for interest rates and other percentages in finance. One basis point is equal to 1/100th of 1%, or 0.01% (0.0001). A warrant is a derivative that gives the right, but not the obligation, to buy or sell a security—most commonly an equity—at a certain price before expiration. The term long-term equity anticipation securities (LEAPS) refers to publicly traded options contracts with expiration dates that are longer than one year, and typically up to three years from issue.

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 3/31/2022: Reunion Gold Corp. 1.50%, Asante Gold Corp. 2.83%, Cardinal Resources Ltd. 0.00%, K92 Mining Inc. 9.41%, Nano One Materials Corp. 7.17%, TriStar Gold Inc. 4.76%, G Mining Ventures Corp. 0.00%, Eldorado Gold Corp. 0.00%, Hochschild Mining PLC 0.00%, Amarillo Gold Corp. 0.00%, Newmont Corp. 0.86%, Aya Gold & Silver Inc. 0.80%, Arizona Metals Ltd. 5.86%, Exxon Mobil Corp. 0.00%, Roscan Gold Corp. 0.50%, Silver Tiger Metals Inc. 0.56%, Compass Gold Corp. 0.35%, Brixton Metals Corp. 0.50%.

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 03-31-2022

Industry Breakdown as of 03-31-2022

Regional Breakdown as of 03-31-2022

Growth of $10,000 Over 10 Years as of 03/31/2022

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 04/30/2022

Quarter End Average Annual Total Returns as of 03/31/2022

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 0.00%, extraordinary expenses, taxes, brokerage commissions and interest, and advisory fee performance adjustments 0.18%) to not exceed 1.90%. Total annual expenses after reimbursement were 1.75%.

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.

The Global Resources Fund had a total return of 13.05% in the first quarter of 2022, underperforming its benchmark, the S&P Global Natural Resources Index, which returned of 16.81%. 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.

Strengths

• The three best performing commodities were natural gas, nickel and iron ore, up 60.06%, 53.70% and 39.30%, respectively. Natural gas demand soared on international markets as energy supply lines were shifted with the near lock out of Russian crude oil from world markets and Europe scrambling to secure new natural gas supplies from outside Russia. Without Russia suppling about 40% of the world’s nickel demand, prices shot up dramatically on the London Metal Exchange (LME) as the invasion of Ukraine began such that trading had to halted for over a week before prices settled back somewhat. Iron ore did better than expected with the Chinese actively pushing back on prices and pollution control measures limiting purchases. Trade flows apparently kept the market tight, and some Russian flows were cut.
• The fund’s best sector performance, relative to the benchmark, came from its underweight positions in integrated oils, underweight in containers & packaging and underweight in pulp & paper. In integrated oils, the fund’s weighting was 7.01% with stocks down only 38.89% versus the benchmark weighting at 22.93%, but its stocks averaged a gain of only 11.99%, thus yielding the fund a 238 basis point (bp) positive relative gain. For containers and packaging, our weighting was 0.00% versus the benchmark at 7.05%. Pulp & paper were also weighted at 0.00% versus the benchmark at 6.82%, and its holdings down 1.83%, thus yielding the fund a 135bp positive relative gain.
• The fund’s biggest contributor to performance was Filo Mining, which was up 51.81%, yielding the fund 178bp. The company’s copper exploration results attracted BHP Group to place a strategic invest of $100 million into the company during the quarter. Gazprom PJSC was our second-best contributor. Its price drop of 93.71% yielded the fund with its zero weighting 107bp of relative performance as Russian assets plunged on the invasion of Ukraine. The third largest contributor to the fund’s relative performance was First Helium, which soared 201.40% for the quarter as payable natural gas horizons were encountered during the drilling program. First Helium is still pursuing helium, but the natural gas adds revenue today. With an average fund weighting of 0.88%, the company contributed 103bp to our relative performance.

Weaknesses

• The worst performing commodities were coal, lumber and coffee, off 44.35%, 8.63% and up 0.18%, respectively. Coal spot prices doubled in the prior quarter but steadily faded back to almost where they started. Lumber prices have been very volatile over the quarter with the pull between housing demand, lumber suppliers logistics and push back from rising interest rates on mortgages. Coffee prices remained range bound for most of the quarter.
• The worst sector performance, relative to the benchmark, came from our overweighting in other metals/minerals, underweight steel and overweight forest products. In other metals and minerals, our weighting was 21.77% with our stocks up 11.72% versus the benchmark weight at 12.76%, but its stocks averaged a gain of 20.98%, thus yielding the fund a 162bp negative relative loss. For steel, our weighting was 0.77% versus the benchmark at 12.69% but the underweight detracted 115bp from our contribution. Instead of having the higher steel weighting, we shifted most of that weight into the new battery metals, which have a higher growth trajectory. Forest products were weighted at 3.09% with our stocks down 15.67 versus the benchmark, which owns no forest product companies but does have paper & packaging and pulp & paper
• NanoXplore, Vale and Nutrien were the three worst detractors to fund performance, losing 158 basis points, 79 basis points and 77 basis points, respectively. Coming off strong gains from the previous quarter, Nanoxplore raised C$30 million to fund further growth in its graphene production, but its share price pulled back 28.45%. Vale benefited from the lift in iron ore prices. We were underweight Nutrien, which gained 38.09% during the quarter. Our average gain in the agriculture sector was 39.89%.

Outlook

Natural gas exhibited strong gains during the quarter. Natural gas prices surged to a fresh seven-year high in the U.S. due to a rally fueled by escalating concerns about tight winter supplies. Gas is now at $6 per million British thermal units (MMBtu), a level not seen since early 2014. Inventories are low. U.S. storage is below normal and tightened further by weather-related supply-demand balance. Delivery issues globally are also affecting prices with delivery price for liquified natural gas (LNG) ranging from $30 to $45 per thousand cubic feet (MCF) in Europe and Asia.

Aluminum continues to look attractive as deepening Chinese output cuts raise fears of a supply shortfall. The southwestern Chinese province of Guangxi, a major metals producer, will cut output of energy-intensive materials, including aluminum. The metal’s recent rally has also been helped by a sharp rise in European and Chinese power prices. Surging energy costs are adding to pressure on global aluminum supply at a time when demand for the metal, used in everything from cars to beer cans, has already driven prices to a 13-year high. The spike in global electricity and coal prices will make restarts increasingly difficult, and some producers may also soon be struggling to run their existing smelters profitably if the energy crunch worsens, particularly those not locked into long-term power contracts.

A perfect storm of events, from extreme weather and plant shutdowns to new government sanctions, has hit the chemical fertilizer market this year, slamming farmers already buckling under the strain of rising costs to produce food. Prices for urea, a popular nitrogen-based fertilizer, skyrocketed in March to the highest since 2012. A common phosphate fertilizer known as diammonium phosphate (DAP) is the most expensive in that market since 2008. Urea-ammonium nitrate (UAN) prices jumped across global benchmarks on recent supply curtailments in Europe. Potash prices moved up on rising demand in Asia and tight supply owing to logistical concerns related to Belarusian exports. A key factor going forward is that China’s National Development and Reform Commission ordered that all state-owned enterprises (SOEs) shall halt all exports of phosphate and nitrogen immediately. China accounts for 30% of world trade in phosphate fertilizer, so its absence from international markets will have a big impact on food prices.

Copper prices have been stable due to slowing construction activity. More recently, copper prices have cooled from record levels to $4.10 per pound. The long-running drought in Chile could hit production at Antofagasta’s Los Pelambres copper mine, one of the world’s largest, the London-listed copper producer warned recently. Demand for copper remains strong in China and the electrification theme should keep copper markets strong.

Lumber prices spiked, then crashed, during the quarter. At the start of the quarter, prices for lumber were driven by the strong global housing market. At the end of the quarter, lumber pricing experienced heavy downward pressure despite growing wildfire threat, as buyers remained on the sidelines working down higher cost inventories. Analysts don’t expect lumber prices to fall back to pre-pandemic levels as supply chain logistics are still an issue. Labor across the board certainly has the upper hand when it comes to skilled craftsman to do physical work.

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.

A basis point, or bp, is a common unit of measure for interest rates and other percentages in finance. One basis point is equal to 1/100th of 1%, or 0.01% (0.0001).

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 3/31/2022: Filo Mining Corp. 7.12%, BHP Group Inc. 0.00%, Gazprom Neft PJSC 0.00%, First Helium Inc. 0.92%, NanoXplore Inc. 2.54%, Vale S.A. 0.00%, Nutrien Ltd. 1.37%.

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.

A basis point, or bp, is a common unit of measure for interest rates and other percentages in finance. One basis point is equal to 1/100th of 1%, or 0.01% (0.0001).

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 3/31/2022: Filo Mining Corp. 7.12%, BHP Group Inc. 0.00%, Gazprom Neft PJSC 0.00%, First Helium Inc. 0.92%, NanoXplore Inc. 2.54%, Vale S.A. 0.00%, Nutrien Ltd. 1.37%.

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 03-31-2022

Industry Breakdown as of 03-31-2022

Regional Breakdown as of 03-31-2022

Growth of $10,000 Over 10 Years as of 03/31/2022

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 04/30/2022

Quarter End Average Annual Total Returns as of 03/31/2022

The China Region Fund lost 14.7% in the quarter ended March 31, 2022, underperforming its benchmark, the Hang Seng Composite, which lost 8.83%. The China Region Fund underperformed its index by 5.87% mostly due to its overweight position in Taiwan and weak stock selection in Hong Kong.

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 a./n investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost.

Strengths

• The fund’s overweight position and superior stock selection in South Korea had the greatest positive effect on the fund’s performance relative to the index. Owning shares of Dentium Corporation, a producer of dental instruments and materials, proved to work well. Shares jumped 26% at the beginning of March after the company reported earnings beat. Dentium is not part of the Hang Seng index.
• The fund’s underweight position in internet software services and overweight position in non-energy minerals had the greatest positive effect on the fund’s performance relative to the index. Technology stocks continued to sell off in the first quarter due to the continued threat of American depository receipts (ADRs) delisting from the New York Stock Exchange (NYSE) and new government regulations. Shares of Tencent declined 16%. The China Region Fund’s strategy to underweight Tencent against the index proved to work well. The fund also held China Hongqiao, an aluminum producer, shares of which gained 26.5%, supported by higher aluminum prices.
• The top three positive contributors were as follows:
  • Call options on HSBC Holdings contributed a positive 0.86% to the fund’s performance. Shares of the bank gained 16.7% in the first quarter, and the strategy to hold call options worked well. The company’s earnings per share (EPS) is expected to grow 7.3% this year, above the industry average of 7.2%. The bank also generates robust growth in cash flow.
  • China Hongqiao, a Chinese aluminum maker, contributed a positive 0.67% to the fund’s performance. Shares gained on strong profits due to higher demand and aluminum prices.
  • Unimicron Technology, a Taiwanese chip maker, contributed a positive 0.18% to the fund’s performance. Shares gained 7.8%, supported by strong global demand for chips. Taiwan is the world’s leading manufacturer of semiconductors.

Weaknesses

• The fund’s stock selection in Hong Kong had the most negative effect on the fund’s performance relative to the index. In Hong Kong, overweighting tobacco industry did not work well. Shares of Smoore International declined 45.6% as the government proposed new regulations on the tobacco industry. In addition, underweighting banks had a negative effect on the fund’s performance against the index. Banks outperformed in the first quarter.
• The fund’s underweight position in financials had the most negative effect in the fund’s performance relative to the index. Underweighting major banks did not work well as banks outperformed in the first quarter.
• The top three negative contributors were as follows:
  • Smoore International, a Chinese producer of vaping devices, contributed a negative 2.12% to the fund’s performance. Shares sold off after China’s vape industry was hit with another round of regulations. The latest regulation of e-cigarettes/vape products will label these products as tobacco products, which will put significant limitations on the industry on the domestic market.
  • United Microelectronics, a Taiwanese semiconductor producer, contributed a negative 1.40% to the fund’s performance. Shares declined after the company reported strong results but also announced capital expenditure increasing by 66% this year to $3 billion. The company expects the investment to boost capacity by 6% from last year.
  • Li Ning, a specialty apparel stores, contributed a negative 1.06% to the fund’s performance. The company reported strong results in 2021, but shares declined 14.8% in the first quarter of 2022, pressured by geopolitical tensions and renewed Covid lockdowns in the mainland. The U.S. claimed that Li Ning is using forced labor in North Korea in its supply chain, an accusation that Li Ning denies.

Outlook

Last year, Chinese equites entered a bear market, and in 2022, stocks continue to trade lower. The weakness is most visible in the real estate sector and technology. Evergrande, China’s second largest real estate developer, missed coupon payments last year and, shortly afterwards, other property developers started to show signs of financial distress. A housing slowdown has become one of the biggest drags on the China’s economy. Property firms have to find almost $100 billion to repay debt this year, even as their income streams shrink.

Technology stocks have been trading lower due to ongoing discussions about delisting Chinse ADRs from U.S. stock exchanges. In 2020, Chinese firms with U.S.-listed shares were given three years to comply with the rules to have more disclosures. In late March, there was an indication that China may finally allow companies to provide more disclosures as requested by U.S. regulators.

In the first quarter, mainland China and Hong Kong both experienced a large spike in Covid cases. China’s zero-tolerance policy poses a threat not only to the domestic economy but the global economy as well. Shanghai, home to China’s leading financial center, and some of its largest sea and airports, has been under lockdown for days. Full or partial lockdowns have been implemented in about 23 cities, according to latest estimates by Nomura. Those cities have around 193 million residents combined (13.6% of China’s population) and contribute 23 trillion yuan (US$3.6 trillion) to the Chinese economy.

The Shanghai lockdown comes at a time when the country’s economy is already struggling. Services and manufacturing were both hit hard in March. The Caixin Purchasing Managers’ Index (PMI) for Services recorded its sharpest decline since the initial outbreak in Wuhan in February 2020. The Caixin Manufacturing PMI also contracted at the quickest pace in two years. China will have to step up policy measures in a timely way to bolster its economy, by lowering borrowing cost and providing more cash to spur growth and prevent further trouble in the real estate sector.

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. A basis point is one hundredth of one percent, used chiefly in expressing differences of interest rates. The Caixin China General Services PMI, sponsored by Caixin and compiled by international information and data analytics provider IHS Markit, seeks to provide the most up-to-date possible indication of what is happening in the country’s growing services industry by tracking variables such as sales, employment, inventories and prices. It is based on data compiled from monthly replies to questionnaires sent to purchasing executives in over 400 companies. The Caixin China General Manufacturing Purchasing Managers’ Index (PMI), sponsored by Caixin and compiled by international information and data analytics provider IHS Markit, is closely watched by investors as one of the first available indicators every month of the strength of the Chinese economy. The report is based on data compiled from monthly replies to questionnaires sent to purchasing executives in over 500 manufacturing companies.

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 3/31/2022: Dentium Co. Ltd. 0.76%, Tencent Holdings Ltd. 1.35%, China Hongqiao Group Ltd. 4.40%, HSBC Holdings plc 0.00%, Unimicron Technology Corp. 4.28%, Smoore International Holdings Ltd. 2.92%, United Microelectronics Cor. 0.00%, Li Ning Co. Ltd. 4.81%, China Evergrande Group 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.

Top 10 Equity and Debt Holdings as of 03-31-2022

Industry Breakdown as of 03-31-2022

Regional Breakdown as of 03-31-2022

Growth of $10,000 Over 10 Years as of 03/31/2022

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 04/30/2022

Quarter End Average Annual Total Returns as of 03/31/2022

Expense ratios as stated in the most recent prospectus. The Adviser of the China Region Fund has voluntarily limited 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 (0.16%) to not exceed 2.55%. With the voluntary expense waiver amount of (0.75%), total annual expenses after reimbursement were 2.55%.

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 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 Emerging Europe fund lost 37.72% in the first quarter of 2022, outperforming its benchmark, the MSCI Emerging Markets Europe 10/40 Index, which lost 67.45%. The Emerging Europe Fund outperformed its index by 29.72%. 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.

It was a horrific quarter in central emerging Europe as the unimaginable happened. On February 21, Russian president Vladimir Putin declared Donetsk and Luhansk, the eastern Ukrainian territories partially controlled by Russia, independent states. A few days later, on February 24, the worst-case scenario unfolded with Russia launching a full-scale attack on Ukraine from the east, north and south.

On the day of the attack, the decision was made to sell next to all Russian assets in the Emerging Europe Fund on expectations of tough sanctions and the potential removal of Russian securities from the fund’s index. In the first quarter, the fund outperformed its index mostly because the Russian assets were sold before the Moscow Stock Exchange was halted for trading. EUROX recorded losses during the quarter but not as large as the index, which removed all Russian holdings on March 9, pricing them at zero.

Strengths

• The fund’s underweight position in Russia had the most positive effect on its performance relative to the index. Prior to Russia’s attack on Ukraine, the Emerging Europe Fund was already decreasing its exposure to Russia. But on the day of Russia’s invasion of Ukraine (Feb. 24), the decision was made to sell next to all Russian securities. This proved to work well as trading on the Moscow Stock Exchange was later halted and Russia’s domestic market is not accessible to foreign investors. On March 9, the index removed all Russian holdings and wrote down all Russian assets to zero.
• The fund’s stock selection in materials and overweight position in industrials had the most positive effect on its performance relative to the index. In materials, the fund benefited from holding Western Europe companies. Shares of Aurubis gained 22%; the company is not part of the MSCI Emerging Market Europe Index. In the industrial sector, the fund also benefited from holding Western European names like Maersk and Rexel.
• The top three positive contributors to the fund’s performance were as follows:
  • KOC Holdings, a Turkish holding company, contributed a positive 0.61% to the fund’s performance. The company owns Turkish car makers, which outperformed during the quarter. Shares of KOC gained 26% in dollar terms during the first quarter.
  • KGHM Polska Miedz, a Polish copper and silver producer, contributed 0.55% to the fund’s performance. Shares of KGHM gained 24% in dollar terms during the first quarter.
  • Ford Otomotive Sanayi, a Turkish carmaker, contributed a positive 0.55% to the fund’s performance. The company benefited from the weak Turkish lira, which pushed exports higher. Shares of Ford gained 31% in dollar terms during the first quarter.

Weaknesses

• The fund’s underweight positions in Poland, Czech Republic and Greece had the most negative effect on the fund’s performance relative to the index. MSCI removed all Russian holdings from its indexes on March 9, giving Poland heavier allocation. The index weight of Poland increased to 46% from 15%. Exposure to Czech Republic increased from 3% to 8.5%, and Greece holdings increased to 14% from 4.5%.
• The fund’s underweight position in financials had the most negative effect on its performance relative to the index. When MSCI removed all Russian holdings from its indexes, the Russian oil and gas industry was replaced mostly by banks.
• The bottom three negative contributors to the fund’s performance were all Russian companies:
  • Lukoil, a Russian oil producer, contributed a negative 11.2%% to the fund’s performance. EUROX sold Lukoil shares later as the first set of sanctions on Russia after the invasion did not target oil and gas industry.
  • Sberbank, Russia’s largest private bank, contributed a negative 4.37% to the fund’s performance. Shares were sold shortly after the invasion, and the loss was due to the broad Russian market selloff.
  • Rosneft, Russia’s largest state-owned oil producer, contributed a negative 2.82% to the fund’s performance. Shares were sold on the day of the invasion, and the loss was due to the broad market selloff.

Outlook

The war in Europe unexpectedly erupted on February 24. Ceasefire talks between Russia and Ukraine are ongoing, but it looks as if no peace agreement will be taking place anytime soon as both sides are not willing to compromise. Russia’s military in Ukraine proved to be the country’s biggest failures. Most observers expected Russia to quickly take control of the whole country. Six weeks following the invasion, Russia was not able to capture Kyiv and the west of Ukraine despite making some advances in the south and east. Russian forces recorded heavy losses and are withdrawing from regions around Kyiv, leaving mass graves behind and cities destroyed. The West has imposed heavy sanctions on Russia, and more will follow. However, the sanctions so far have not changed Putin’s mind and have had an insignificant effect on Russia’s currency, which has already returned to pre-war levels. Russian five-year credit default swaps spiked after the U.S. Treasury banned Russian debt payments from U.S. banks. The probability of Russia’s default is rising. The loss of life and infrastructure distraction is enormous, and a quick peace agreement will be welcomed by the international community and financial markets.

This war in Europe will have global ramifications. Growth in Europe will be weaker, and inflation will be higher, but the impact will vary by country. Countries with strong economic links with Russia will suffer more than those that did not rely on trade with Russia.

From the investment viewpoint, the fact that MSCI removed Russia from its indexes may benefit central emerging Europe countries. On March 9, indexes removed Russia, and Russia equites became un-investible. The Moscow Stock Exchange is open for trading only for Russian citizens. Investors looking to buy emerging markets in Europe will most likely decide to buy Poland, Czech Republic, Hungary and Turkey.

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.

There is no guarantee that the issuers of any securities will declare dividends in the future or that, if declared, will remain at current levels or increase over time. The dividend yield, expressed as a percentage, is a financial ratio (dividend/price) that shows how much a company pays out in dividends each year relative to its stock price.

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 3/31/2022: Aurubis AG 1.01%, AP Moller-Maersk A/S 1.32%, Rexel S.A. 0.00%, KOC Holdings AS 3.32%, KGHM Polska Miedz SA 5.87%, Ford Otomotiv Sanayi AS 3.17%, Lukoil PJSC 0.00%, Sberbank PJSC 0.00%, Rosneft PJSC 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 03-31-2022

Industry Breakdown as of 03-31-2022

Regional Breakdown as of 03-31-2022

Growth of $10,000 Over 10 Years as of 03/31/2022

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 04/30/2022

Quarter End Average Annual Total Returns as of 03/31/2022

Expense ratio 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 0.00%, extraordinary expenses, taxes, brokerage commissions and interest, and advisory fee performance adjustments (0.18%) ) to not exceed 2.85%. With the voluntary expense waiver amount of (0.00%), 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.

The Near-Term Tax Free Fund had a total return of negative 3.88% in the first quarter of 2022, underperforming its benchmark, the Bloomberg Barclays Municipal Bond 3-Year Index, which returned negative 3.56%. 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.

Rising interest rates led to three straight months of declines in the municipal bond market in the first quarter. Of the 32-basis points (bp) of underperformance, 12bp is attributed to the expense ratio, with the remaining underperformance coming from maturities greater than five years.

Strengths

• The fund’s overweight allocation to the zero- to one-year maturity area of the curve was the most significant contributor to our performance as bonds in those maturities lost little in price as shorter dated yields declined slightly.
• The fund’s allocation to the New York, Colorado and Michigan bonds were the only positive states that contributor to performance.
• The only three sectors to deliver positive performance in the quarter were utilities, single-family housing and facility bonds, respectively.

Weaknesses

• The fund’s allocation to maturities greater than five years were the largest detractor to our performance. With interest rates rising in the first quarter, longer-dated bonds would be expected to underperform. There now remains the question of how high the Federal Reserve can lift interest rates without hurting the economy.
• The fund’s underweight allocation to California bonds was the largest negatively contributor to performance. School district bonds for the State of New Jersey had the biggest percentage fall in price. Transportation bonds for the District of Columbia rounded out the bottom three issuers.
• General obligation bonds, school districts and water issuers were the three leading sectors for losses as they are the largest weights in the fund and fell with the rise in interest rates.

Outlook

Tight credit spreads of municipal bonds to Treasury bonds have made it difficult to gain an additional pick up in yield for investors for much of the past year. Retail demand for tax-free income in the future narrowed the spreads with a potential change in tax rates coming. Coming off the past quarterly loss, it is typical for investors to pull money from the municipal sector, which may lead to better relative spreads in the future. Default rates fell in 2021 from the prior year and the municipal credit fundamentals are constructive with a pickup in tax collections and Covid-19 related stimulus. Moody’s Investor Service has a positive outlook on airports, ports and toll roads, with other sectors rated stable, except for hospitals. Standard and Poor’s only has a negative outlook for the higher education sector with declines in enrollment and net tuition revenue.

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 03-31-2022

Industry Breakdown as of 03-31-2022

Top 5 States as of 03-31-2022

Growth of $10,000 Over 10 Years as of 03/31/2022

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 04/30/2022

Quarter End Average Annual Total Returns as of 03/31/2022

Expense ratios as stated in the most recent prospectus. The Adviser of the Near-Term Tax Free Fund has contractually limited, through April 30, 2023, the total fund operating expenses (exclusive of acquired fund fees and expenses 0.01%, extraordinary expenses, taxes, brokerage commissions and interest) to not exceed 0.45%. Total annual expenses after the waiver of (0.68%) 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 had a total return of negative 1.51% in the first quarter of 2022, underperforming its benchmark, the Bloomberg Barclays US Treasury Bills 6-9 Months Index, which returned negative 0.23%. 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 main source of underperformance came from allocations to bonds with maturities between one and three years, as they underperformed the benchmark. These longer-dated notes were impacted by headline inflation numbers that touched 40-year highs. This has the Federal Reserve concerned that inflation could be more than transitory and that an aggressive rate-hiking policy must be executed.

Outlook

The yield on the 10-year Treasury, a bellwether used in the fixed-income markets, ended the quarter at 2.34%, 83 basis points (bp) higher than the prior quarter close, but the 5-year Treasury moved up 120bp and the 3-year rose 156bp. Markets have flattened the yield curve more on the short end of the curve, perhaps with some reluctance to push long-term rates too high so as not to stifle growth. With the lift in short rates that makes it much more advantages to pick up income, where we can pick up meaningful yield above expenses of managing the fund. The Fed has a significant amount of uncertainty to deal with in keeping economic growth intact and getting inflation under control. With the Russian invasion of Ukraine supply chains around the world have been disrupted and inflation is likely to persist longer.

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 for 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, or bp, is a common unit of measure for interest rates and other percentages in finance. One basis point is equal to 1/100th of 1%, or 0.01% (0.0001).

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 03-31-2022

U.S. Government Securities Ultra-Short Bond Fund
Growth of $10,000 Over 10 Years as of 03/31/2022

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 04/30/2022

Quarter End Average Annual Total Returns as of 03/31/2022

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 (0.61%) 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.