Our Mutual Funds

The Global Luxury Goods Fund gained 18.24% in the first quarter of 2023, outperforming its benchmark, the S&P 1500 Composite Index, which gained 7.15%. The performance of the Global Luxury Goods Fund was more aligned with the performance of the S&P Global Luxury Index, which increased 18.34%, as both focus on high-end products and services. Discretionary stocks were the best performing within the S&P 1500 index. See complete fund performance here.

The 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 significant overweight position in consumer discretionary had the most positive effect on the fund’s performance relative to the S&P 1500 Index. The luxury fund invests most of its assets in high-end products and services while the S&P 1500 index has a much smaller exposure to this sector. The fund strategy to overweight apparel/footwear had the most positive effect relative to the fund’s index. Shares of Hermes gained 32% in the first three months of the year, Industria de Diseno Textil (the luxury company best known for its brand Zara) gained 27% and Louis Vuitton shares surged 27%. None of these names are in the S&P 1500 index.
• The fund’s overweight position in motor vehicles within the discretionary sector had the second most positive effect on the fund’s performance relative to the index. Shares of Tesla surged 68.4% in the first three months of the year, BMW gained 23.2%, Mercedes was up 17.3% and Lucid Group spiked 17.7%.
• The strongest contributor to the fund’s performance was Tesla, an electric car manufacturer and distributor, which contributed a positive 2.3% to the fund’s performance. Shares of Tesla increased 68.4% in the first quarter while the S&P 1500 Index gained 7.15% and the S&P Global Luxury Index surged by 18.34%. Tesla recorded strong gains in January, recovering half of its losses from the prior quarter. The company has been cutting model prices to spur more demand.

Weaknesses

• The fund’s underweight position in information technology had the most negative effect on the fund’s performance relative to the S&P 1500 Index. During the quarter, the fund was not exposed to semiconductors, which bounced strongly. Shares of NVIDIA surged 90% and Advanced Micro Devices recorded a gain of 51.3%. Analysts are more optimistic about these two stocks based on the growing demand for artificial intelligence (AI) applications.
• The fund’s underweight position in packaged software within the information technology sector had the second most negative effect on the fund’s performance relative to the index. Shares of Microsoft gained 20.5% and shares of Salesforce surged 50.7%; the luxury fund had no exposure to these names.
• The biggest detractor to the fund’s performance was Impala Platinum Holdings, a precious metal producer, which contributed a negative 0.20% to the fund’s overall performance. Shares declined 25% in the first quarter. The company expects metal production from South Africa to fall this year.

Outlook

Luxury stocks continued to move higher in the first three months of the year, supported by optimism around China removing its zero-Covid policy and reopening its market further after three years of restrictions. In the first three months of this year, many equities within the luxury sectors reached record highs. Hermes International, Luis Vuitton and Burberry, among others, reached new record levels as high net worth individuals (HNWIs) continue to lavishly spend, disregarding rising rates and threats to emerging global economic weakness and geopolitical tensions. According to the Bloomberg Billionaires Index, CEO of the luxury conglomerate LVMH Bernard Arnoult became the wealthiest man on earth during the quarter. His fortune was worth more than $200 billion for the first time, making him one of only three people ever to reach that personal wealth amount after Elon Musk and Jeff Bezos, but he is the first outside the United States. LVMH reported record sales for 2022 of €79.2 billion. We project selected luxury goods to continue to gain but at a slower pace after a strong first-quarter performance.

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 measures the performance of 80 companies engaged in the production, distribution, or provision of luxury goods and services drawn from the S&P Global BMI. The Bloomberg Billionaires Index is a daily ranking of the world’s richest people. The Bloomberg Billionaires Index is a daily ranking of the world’s richest people.

Fund portfolios are actively managed, and holdings may change daily. Holdings are reported as of the most recent quarter-end. Holdings in the Global Luxury Goods Fund as a percentage of net assets as of 3/30/2023: Hermes International 5.77%, Industria de Diseno Textil SA 4.29%, LVMH Moet Hennessy Louis Vuitton SA 3.74%, Tesla Inc. 5.88%, Bayerische Motoren Werke AG 4.11%, Mercedes-Benz Group AG 4.78%, Lucid Group Inc. 1.16%, NVIDIA Corp. 0.00%, Advanced Micro Devices Inc. 0.00%, Salesforce Inc. 0.00%, Microsoft Corp. 0.00%, Impala Platinum Holdings Ltd. 0.58%, Burberry 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.

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 03-31-2023

Industry Breakdown as of 03-31-2023

Regional Breakdown as of 03-31-2023

Growth of $10,000 Over 10 Years as of 03/31/2023

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 4/30/2023

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 (0.24%) to not exceed 1.75%. Total annual expenses after reimbursement were 1.75%.

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 Gold and Precious Metals Fund rose 7.49% in the first quarter of 2023, underperforming its benchmark, the FTSE Gold Mines Index, which gained 12.20% 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.

While focusing on established, gold-producing companies, the Gold and Precious Metals Fund holds less than 50% of its holdings in precious metal miners that are greater than $1 billion in market capitalization; meanwhile, the FTSE Gold Mines Index’s average market capitalization is closer to $7.5 billion.

Strengths

• Underweighting Agnico Eagle Mines, as it was focused on completing the integration of the Yamana Gold transaction during the quarter, was the biggest beneficiary to the fund. Agnico Eagle is nearly 13% of the benchmark but had a negative 1.11% move for the quarter.
• Being underweight Newmont Mining, the largest member of the FTSE Gold Mines Index, was our next best call on relative performance. The company significantly underperformed its index peers with a gain of only 4.84%.
• The next best contributor to performance was Resolute Mining, which was added to the fund in November 2022. Resolute advanced 107.40% during the second quarter, with gains largely coming from a change in the CEO.

Weaknesses

• Being underweight Newcrest Mining, prior to Newmont’s proposed takeover, was the biggest drag on performance, with the stock gaining 31.44% by quarter end. The fund’s gain on being underweight Newmont was partially offset by being underweight Newcrest.
• The second worst contributor to relative performance was overweighting K92 Mining, which gained only 0.25% for the quarter. Gold production in the first quarter was less than expected due to challenging ground conditions in one part of the mine.
• The fund’s third largest loss came from owning Menē, an online designer of investment-grade, 24-karat gold and platinum jewelry. The company has seen weakening quarterly sales.

Outlook for Gold and Precious Metals

Canaccord remains bullish on gold in 2023. The firm’s macro view hasn’t changed since it published its 2023 outlook. The Federal Open Market Committee’s (FOMC) 25 basis point (bp) increase was in line with expectations, and the market continues to price in a terminal rate of 5%. Despite the short-term pullback, Canaccord believes that gold and gold equities have more room to run ahead of a Fed pause with a non-trivial chance of a recession emerging.

World Gold Council (WGC) data shows that gold demand was up 18% (+728 metric tons) in 2022, reaching its highest level since 2011. Central bank demand rose 685 tons, or 150% year-over-year, offsetting outflows from gold-backed ETFs.

Silver strength exiting 2022 continued in early 2023, holding levels over $23 per ounce. Silver has also continued to outperform gold, rising 10% over the last three months and driving the gold/silver ratio down to 80:1, closer to the historical average of 76:1. Precious metals prices have seen a lift from a weaker U.S. dollar, moderating real rates and more dovish indications from central banks, even amidst ongoing macro uncertainty and recession fears.

Most companies under coverage are assuming inflationary pressures that were seen in 2022 will persist into 2023 but slowly taper off thereafter. Newmont’s five-year outlook indicates that long-run cash costs will increase $50 per ounce, or around 7% from the prior guide, and sustaining capex will increase $175 million annually (up around 14%) from the prior guide. Higher gold prices will be needed to offset this. Only 33% of operations were able to execute on mine-site cost guidance in 2022. Producers saw an average all-in-sustaining cost (AISC) of $100 per ounce above original guidance, with only 30% of producers able to achieve guidance, representing a record low versus the prior five-year average of 75%.

The FTSE Gold Mines Index 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. AISC is an abbreviation for “all-in sustaining costs,” a measure, defined by the World Gold Council, of the cost of sustaining current mining operations. It is expressed in terms of US$ per ounce of gold sold.

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 Gold and Precious Metals Fund as a percent of net assets as of 3/30/2023: Agnico Eagle Mines Ltd. 1.55%, Yamana Gold Inc. 0.00%, Newmont Corp. 0.00%, Resolute Mining Ltd. 3.17%.

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 Holdings as of 03-31-2023

Industry Breakdown as of 03-31-2023

Regional Breakdown as of 03-31-2023

Growth of $10,000 Over 10 Years as of 03/31/2023

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 04/30/2023

Quarter End Average Annual Total Returns as of 03/31/2023

The Adviser of the Gold & Precious Metals 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 (0.12%) to not exceed 1.75%. With the voluntary expense waiver amount of (0.00%), Total annual expenses after reimbursement were 1.67%.

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.

For the quarter ended March 31, 2023, the World Precious Minerals Fund rose 4.62%, underperforming its benchmark, the NYSE Arca Gold Miners Index, which gained 13.31% 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 S&P/TSX Venture Composite Index, which better reflects the mix of small-cap junior mining companies the fund typically invests in, returned 11.32%. The high returns generated by the Venture Exchange were largely from Bitcoin mining companies that benefited from the 71% rise in the Bitcoin price during the first quarter.

Strengths

• Nano One Materials was the largest contributor to fund performance with a 30.07% gain in its share price during the first quarter, due in large part to its receiving a $10 million grant. Nano One is not a member of the NYSE Arca Gold Miners Index.
• The second most significant contributor was the underweighting of Agnico Eargle Mines, which had a negative return of 0.97% during the quarter. Agnico was in the process of completing its acquisition of Yamana Gold.
• Being underweight Newmont Mining, the largest member of the NYSE Arca Gold Miners Index, was our third-best call on relative performance as it underperformed its index peers.

Weaknesses

• Barksdale Resources Corp. was the fund’s biggest detractor for the quarter as it was down 23%. Barksdale is in the final permitting phase of a seven-year drilling program for the Sunnyside carbonate replacement deposit on U.S. Forest Service land, with permits expected by May or June.
• K92 Mining was the fund’s second-biggest detractor from performance with its share price rising only 0.25% during the quarter. Ground conditions slowed operations, and following the end of the quarter, the company announced that they missed production guidance.
• Being underweight Newcrest Mining was the third biggest drag on performance with the stock gaining 31.44% by quarter end. The fund’s gain on being underweight Newmont was partially offset by being underweight Newcrest.

Outlook for World Precious Minerals

Gold rose to a nine-month high after comments from the Federal Reserve suggested its aggressive cycle of rate hikes is coming to an end. Fed Chair Jerome Powell said policymakers expect to deliver a “couple” more interest-rate increases before putting their tightening campaign on hold as the central bank raised its key rate by a quarter point in a widely expected move.

Gold prices could surpass the record set at the height of the Covid-19 pandemic if ongoing turmoil in the banking sector persists and global central banks downshift their interest-rate hiking cycle, according to Sprott Inc., a top investor in the bullion industry. The asset briefly rose above $2,000 an ounce during the quarter for the first time in a year as a deal to buy Credit Suisse Group failed to calm fears over the global banking industry. Concerns over contagion among regional lenders have sparked bets that the Fed may slow the pace of monetary tightening, which usually means the price of gold is headed up. “I certainly think we’re on our way to new highs,” Sprott’s Chief Executive Officer Whitney George said in an interview.

The consolidation in the senior gold mining companies over the last couple of years, culminating with a potential mega-merger between giants Newmont and Newcrest, comes at a time when reserves have been steadily declining at the major gold mining companies. This creates opportunities going forward as many of the senior gold mining companies are going to need to replace their depleting ore bodies. Intermediate gold miners could be considered prey for the senior miners, but both the senior and intermediate gold miners will look hard at the exploration sector as this is where the deepest discounted ounces are valued.

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 S&P/TSX Venture Composite Index is a capitalization-weighted index.

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 3/30/2023: Nano One Materials Corp. 11.39%, Agnico Eagle Mines Ltd. 0.00%, Yamana Gold Inc. 0.00%, Newmont Corp. 0.00%, Barksdale Resources Corp. 2.55%, K92 Mining Inc. 8.12%, Newcrest Mining Inc. 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 3-31-2023

Industry Breakdown as of 3-31-2023

Regional Breakdown as of 3-31-2023

Growth of $10,000 Over 10 Years as of 03/31/2023

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 04/30/2023

Quarter End Average Annual Total Returns as of 03/31/2023

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 (0.29%) to not exceed 1.75%. With the voluntary expense waiver amount of (0.16%) Total annual expenses after reimbursement were 1.75%.

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.

For the first quarter, the Global Resources Fund returned 0.93%, outperforming its benchmark, the S&P Global Natural Resources Index (Net Total Return), which rose 0.41%. 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 Global Resources Fund invests in exploration and development companies and the junior mining and energy sector, unlike our benchmark, which is principally invested in large capitalization natural resources companies with established revenue streams; as a result, there can be timing swings where money flows first to the most liquid names before investors go down market.

Strengths

• The three strongest commodities for the quarter were sugar, copper and gold, up 21%, 8% and 6%, respectively. The world is experiencing a four million metric ton-shortfall of crops to produce sugar In Thailand, the world’s fourth largest producer; all but five of 57 millers have stopped crushing due to poor crop conditions. Copper and gold fared better in the first quarter, with the prospect of Federal Reserve rate cuts on the horizon in the remainder of 2023.
• The three best sector calls for the fund were an overweight position in metals/minerals, underweight position in agriculture chemicals and overweight in electrical products. Copper equities rose in price with the gains in the underlying commodity price. For agriculture chemicals, fertilizer stocks fared poorly, but a number of lithium stocks are in this group and the fund’s average gain was about 16% for the quarter, with fertilizer stocks essentially flat for the quarter. Electrical products largely include clean energy applications, which averaged nearly an 18% gain.
• The three best dollar-performing stock decisions were Ivanhoe Mines, Lithium Ionic and Nanoxplore. Ivanhoe Mine, one of larger positions, moved up with copper prices. Lithium Ionic and NanoXplore were both beneficiaries of the electric vehicle (EV) trend.

Weaknesses

• The three weakest commodities for the quarter were natural gas, lithium hydroxide and nickel, down 44%, 26% and 21%, respectively. Domestic natural gas plunged on warmer-than-expected weather and from stranded gas that could not be sold into the international markets due to an earlier fire at Freeport LNG’s export terminal. (Freeport LNG, a liquified natural gas (LNG) exporter based in Freeport, Texas, is a private corporation.) Incentives to purchase an EV in China were withdrawn, leading to a glut in demand for battery materials like lithium and nickel.
• The fund’s worst-performing sectors were its overweight position in precious metals, underweight steel and overweight investment trust linked to oil and gas production. The fund underperformed the precious metals in the benchmark as they just own the six largest market capitalization gold companies. Steel stocks surprised to the upside with better-than-expected performance. Oil and gas producers lost ground with declining oil prices.
• Filo Mining was the largest detractor to performance as it is one of the largest positions in the fund but had flat performance for the quarter. Brixton Metals Corp. reported a number of significant drill intercepts in late 2022 and early 2023 but shared no additional results for the rest of the quarter, and the stock languished. Centaurus Metals pulled back in price as we cut our position size down on weaker nickel prices.

Outlook for Global Resources

Fundamentally, copper supply issues are easing and demand is slowly picking up, driven by China. The impact of China’s property sector stimulus from 2022 began to show up in construction activity data for the first two months of the year, with an 8% increase year-over-year in housing completions and an improvement in housing under construction, which was down only 9.4% year-over-year compared to a 50.8% annual decrease in December 2022.

Iron ore is rising with optimism for improved demand in China, bolstered by the nation’s approaching peak construction season. The steel-making ingredient has been gaining on expectations of increased restocking as the country looks set to ramp up steel production during the second quarter. Some analysts remain confident that an imminent restart to stalled infrastructure projects will lift prices further.

The Department of Energy (DOE) projects green hydrogen production in the U.S. will increase to 10 million metric tons per year by 2030, 20 million metric tons per year by 2040 and 50 million metric tons per year by 2050. The World Bank believes hydrogen will play a key role in a carbon-free world and will account for 12% to 22% of total energy demand in 2050.

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.

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 3/30/2022: Ivanhoe Mines Ltd. 5.68%, Lithium Ionic Corp. 1.91%, NanoXplore Inc. 2.23%, Filo Mining Corp. 6.36%, Brixton Metals Corp. 0.47%, Centaurus Metals Ltd. 0.88%.

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 3-31-2023

Industry Breakdown as of 3-31-2023

Regional Breakdown as of 3-31-2023

Growth of $10,000 Over 10 Years as of 03/31/2023

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 04/30/2023

Quarter End Average Annual Total Returns as of 03/31/2023

The China Region Fund gained 10.291% in the first quarter of 2023, outperforming its benchmark, the Hang Seng Composite Index (HSCI), which appreciated by 2.96%. See complete fund performance here.

The 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 in Taiwan had the most positive effect on the fund’s performance relative to the index. The strategy to hold semiconductors and electronic components in Taiwan worked well in the first months of this year. Shares of Global Unichip surged 70.9%, following ASPEED Technology’s gain of 58% and United Microelectronics’ gain of 31.2%. None of these names were part of the fund’s index.
• The fund’s overweight position in electronic technology and transportation had the most positive effect on the fund’s performance relative to the index. As explained above, Taiwanese semiconductor/technology stocks traded higher, contributing to the fund’s outperformance. In transportation, the fund’s good stock selection helped to beat the index. The fund had an underweight position in Meituan, whose shares declined 18.3%, and the fund had an overweight position in shipping companies, whose shares outpaced gains in the HSCI index. COSCO Shipping gained 10.3% and Orient Overseas increased 5.9%. Both transportation companies had a much smaller weight in the fund’s index.
• The top three positive contributors were as follows:
  • United Microelectronics Corporation, a Taiwanese semiconductor, contributed a positive 1.4% to the fund’s performance. Shares gained 31.2% in the first quarter of this year after losing 70% last year.
  • PetroChina Company, a subsidy of state-owned China National Petroleum Corporation, produced two-thirds of China’s oil and gas and contributed a positive 1.1% to the fund’s performance. Shares gained 29.5% in the first quarter. Petro China and another Chinese company want to invest a combined $14.5 billion or more in renewable energy by 2025, diversifying its business as Beijing pushed to achieve net-zero carbon dioxide emission by 2060.
  • Global Unichip, a Taiwanese chipmaker, contributed a positive 1.1% to the fund’s performance. Shares gained 70.9% in the first quarter. The company reported an earnings beat once again.

Weaknesses

• The fund’s underweight position in the United Kingdom and an overweight position in South Korea had the most negative effect on the fund’s performance relative to the index. The strategy to underweight UK’s HSBC Bank did not work well as the bank’s equity gained 12.9% during the first quarter.  In South Korea, shares of NCsoft declined 13.6%, and LX International lost 17.2%. These holdings were not part of the HSCI Index.
• The fund’s underweight position in technology had the most negative effect on the fund’s performance. The strategy to underweight shares of Tencent, which gained 20.4%, did not work well. In addition, as mentioned above, shares of the NCsoft Corporation, a South Korean technology company lost 13.6%.
• The top three negative contributors were as follows:
  • Great Wall Motor Corporation, a truck and SUV producer, contributed a negative 0.30% to the fund’s performance. Shares declined 5.2% in the first quarter. At the beginning of the year, the company announced weaker car sales with January-February production volume down 28.5% on a year-over-year basis to 130,043 units.
  • NCsoft, a South Korean technology company, contributed a negative 0.28% to the fund’s performance. Shares declined 13.6% in the first quarter despite the company signing a deal with Amazon Games to develop a new game called “Throne and Liberty.”
  • China Coal Energy contributed a negative 1.10% to the fund’s performance. Shares declined 6.84% in the first quarter. In February, China reported a major mining accident in the Inner Mongolia region with four confirmed dead, six injured and 49 missing. China permitted more coal power plants last year than at any time in the last seven years, according to a report released in the first quarter of the year. It’s the equivalent of about two new coal power plants per week. The report by energy data organizations Global Energy Monitor and the Centre for Research on Energy and Clean Air (CREA) finds the country quadrupled the amount of new coal power approvals in 2022 compared to 2021.

Outlook

Chinese equities trading in mainland China and Hong Kong rose year-to-date, supported by the further economic reopening after years of operations under the Covid-related restrictions. The Manufacturing PMI and Service PMI increased, suggesting further improvement in economic activities. China’s Composite PMI, which measures economic activity among large state-owned enterprises, was reported at 57.0 at the end of March, well above the 50-mark that separates growth from contraction. The Caixin Composite PMI, which measures economic activity among smaller, privately owned enterprises, was reported well above the 50-mark as well, at 54.5, confirming the strength of the economy.

However, many investors remain on the sidelines in China, observing the geopolitical developments. The President of China, Xi Jinping, visited President Vladimir Putin of Russia in Moscow, showing signs of cooperation and willingness to increase trade. Bloomberg reported the Chinese yuan has replaced the U.S. dollar as the most traded currency in Russia, with the monthly trading volume in yuan surpassing the dollar in both February and March. In addition, Saudi Crown Prince Mohammed bin Salman Al-Saud discussed cooperation with China’s president, and China supports talks between Saudi Arabia and Iran. Saudi Foreign Minister Faisal bin Farhan Al-Saud met with Iranian Foreign Minister Hossein Amir-Abdollahian in China. The two agreed to end diplomatic rifts and re-open embassies in a major deal facilitated by China. Finally, tensions remain high between China and Taiwan, with China holding on and off military drills around Taiwan. In China, economic data improved, but geopolitical stakes are high, keeping some investors on the sidelines.

The Hang Seng Composite Index is a market capitalization-weighted index that comprises the top two hundred companies listed on the Stock Exchange of Hong Kong, based on the average market cap for the 12 months.

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 3/30/2023: Global Unichip Corp. 1.15%, ASPEED Technology Inc. 2.25%, United Microelectronics Corp. 5.63%, Meituan 0.99%, COSCO Shipping Holdings Co. Ltd. 5.14%, Orient Overseas International Ltd. 0.00%, PetroChina Co. Ltd. 0.00%, HSBC Holdings PLC 1.00%, NCSoft Corp. 0.00%, LX International Corp. 0.62%, Tencent Holdings Ltd. 3.19%, Great Wall Motor Co. Ltd. 3.31%, China Coal Energy Co. Ltd. 3.76%.

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 3-31-2023

Industry Breakdown as of 3-31-2023

Regional Breakdown as of 3-31-2023

Growth of $10,000 Over 10 Years as of 03/31/2023

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 04/30/2023

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 (0.11%) to not exceed 1.75%. With the voluntary expense waiver amount of (2.59%), total annual expenses after reimbursement were 1.75%.

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 Emerging Europe Fund lost 1.08% in the first quarter of 2023, underperforming its benchmark, the Emerging Europe 10/40, which gained 1.51%. 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 stock selection in Poland had the most positive effect on the fund’s performance relative to the index. The fund had purchased shares of Alior Bank, which gained 18.78% in the first three months of the year, and Bank Handlowy, whose shares surged 9.9%. Those two banks were not part of the MSCI EM Europe 10/40 Index.
• The fund’s stock selection in energy and an overweight position in integrated oil had the most positive effect on the fund’s performance relative to the index. In energy, the fund benefited from having smaller exposure to the Polish refiner, Polski Koncern Naftowy, whose shares declined 7.7%. In integrated oils, the fund mostly benefited from owning shares of Romania’s OMV Petrom, whose shares gained 11.6%. OMV Petrom is not part of the fund’s benchmark.
• The top three positive contributors to the fund’s performance were as follows:
  • Jumbo, a Greek retailer, contributed a positive 0.71% to the fund’s performance. Shares gained 31.5%, supported by strong year-over-year sales. Jumbo shareholders approved extraordinary cash distribution after reporting strong profits.
  • Alpha Services & Holdings, a Greek bank, contributed a positive 0.53% to the fund’s performance. It was a volatile quarter for Alpha Bank, whose shares gained more than 40% in the first two months of the year, recording some losses in March due to the global banking crisis. Shares of Alpha Bank gained 14% in the first quarter. Many analysts say that Greek banks are well-capitalized and are set to outperform other European banks this year.
  • Turkiye Petrol Rafinerileri contributed a positive 0.53% to the fund’s performance. Shares gained 5.1%, supported by the company’s strong profit margins.

Weaknesses

• The fund’s underweight position in the Czech Republic had the most negative effect on the fund’s performance relative to the index. Shares in the state-controlled utility Company CEZ rose recently to the highest point since June after the country’s finance minister said that the government may ask for a higher dividend. The company said in March that it could pay out a record CZK44 billion to the state budget from its 2022 profits. EUROX had no exposure to CEZ.
• The fund’s underweight position in utilities had the most negative effect on the fund’s performance relative to the index. As explained above, CEZ, a Czech power producer, gained 43% in the first three months of the year, and the fund had no exposure to it. In addition, shares of the Public Power Corporation gained 24%, and the fund once again had no exposure to this Greek electricity generator and distributor.
• The bottom three negative contributors to the fund’s performance were equities listed on the Istanbul Stock Exchange. Turkish equities moved higher last year and have corrected year-to-date as the country awaits presidential and parliamentary elections in May. The latest polls suggest that, after more than 20 years in power, President Recep Erdogan may lose to his challenger, the Republican Party Leader (CHP) Kemal Kilicdaroglu.
  • Turk Telekomunikasyon, a telecom company, contributed a negative 0.52% to the fund’s performance. Its shares lost 25% in the first quarter.
  • Turk Hava Yollari, a Turkish airline, contributed a negative 0.38% to the fund’s performance. The carrier’s shares lost 18% in the first quarter.
  • KOC Holding, a Turkish holding company, contributed a negative 0.45% to the fund’s performance. Its shares lost 10.9% in the first quarter.

Outlook

Emerging Europe equities continued to grind higher in the first quarter of this year after surging more than 40% (as measured by MSCI EM Europe 10/40 Index) in the fourth quarter of last year. The war in Europe shows no signs of a peaceful resolution, and inflation is receding in the eurozone but remains well above the European Central Bank’s (ECB) target of 2%. The ECB started tightening policy, trying to ease the pricing pressure. The first quarter of 2023 presented us with additional uncertainties. The global banking sector faced turbulence, resulting in the collapse of a few regional banks in the United States. In Europe, Credit Suisse has been taken over with the help of the government of Switzerland by UBS (the largest bank in the country).

We believe that equities in central emerging Europe will continue to recover from last’s year sharp losses due to Russia’s invasion of its neighboring country Ukraine, creating an energy crisis in Europe. The future recovery will very much depend on the developments on the battlefields, but for now, neither side is willing to negotiate the end of the war peacefully. Russia just announced additional penalties for those who evade the military draft, and the country wants to expand its armed forces by nearly 50% to 1.5 million people over several years. On the other side, Ukraine may be running out of ammunition, and Western Europe is not able to produce it fast enough.

On a positive note, we will be carefully watching the upcoming elections in Turkey as they may lead to a change of power in the country. Investors for years have been leaving the country due to President Erdogan’s policies, and the trend may start to reverse if Erdogan loses after more than 20 years in power.

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).

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 3/30/2023: Alior Bank SA 2.05%, Bank Handlowy w Warszawie SA 2.00%, Polski Koncern Naftowy ORLEN SA 4.14%, JUMBO SA 2.28%, Alpha Services and Holdings SA 1.13%, Turkiye Garanti Bankasi SA 2.11%, CEZ Group 0.00%, Public Power Corporation SA 0.00%, Turk Telekomunikasyon A.S. 0.00%, Turk Hava Yollari AO 1.76%, KOC Holdings AS 2.41%.

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 3-31-2023

Industry Breakdown as of 3-31-2023

Regional Breakdown as of 3-31-2023

Growth of $10,000 Over 10 Years as of 03/31/2023

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 04/30/2023

Quarter End Average Annual Total Returns as of 03/31/2023

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 0.29% to not exceed 1.75%. With the voluntary expense waiver amount of (1.88%), total annual expenses after reimbursement were 1.75%.

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.

For the quarter, the Near-Term Tax Free Fund returned 0.95%, underperforming its benchmark, the Bloomberg Barclays 3-Year Municipal Bond Index, which gained 1.35%. 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 fund’s duration is closer to 1.5 years compared to the benchmark at three years. Short interest rates at the one-year to five-year marks declined 30 basis points (bps) and 10 bps, respectively, for the quarter, giving an advantage to the three-year benchmark performance relative to the fund and its peers. That entire shift in the curve reversed in April, with rates higher than at the end of the March quarter.

Strengths

• The fund’s allocation to bonds from Texas, Massachusetts and Washington outperformed, respectively.
• The fund benefited from its allocation to state general obligation, general and school districts, all of which outperformed.
• The fund’s allocation in the one- to three-year maturities was the largest contributor to returns.

Weaknesses

• The fund’s allocation to bonds from Mississippi, South Dakota and Missouri underperformed but still delivered positive returns.
• The fund’s exposure to power, development and multifamily housing underperformed but still delivered positive returns.
• The fund’s allocation in the zero- to one-year maturities lowered the duration of the fund, and we did not benefit from the shift in the AAA municipal yield curve yields by quarter end. However, this shift completely reversed in April, following the end of the first quarter.

Current Outlook

The year is starting to rebound from the steep losses of 2022 associated with the jumbo rate hikes. Economic signals are mixed in that employment is still strong, but diesel fuel demand points to a weakening economy. The Federal Reserve has stepped back from jumbo 75 bp hikes in favor of smaller 25 bps hikes, and there is the view that the Fed may eventually have to cut interest rates in late 2023.

Inflation has tapered off only a bit. The municipal yield curve remains inverted from the prior year’s lift in short-term rates. The Fed’s tone is bearish, keeping rates up high enough to tame inflation, but two bank failures in the first quarter alone must be a red flag.

Florida is risking its creditworthiness with the major bond rating houses if it pushes forward on excluding ESG (environment, social and governance) criteria from any state or municipal debt. Florida accounts for 5% of the fund’s benchmark and 1% of the fund itself. California is the biggest benchmark weighting, which we are underweight in favor of a higher Texas exposure. Texas is not without risks, as the state legislature has recently introduced bills in the latest session that would shift the risks of building new natural gas power generation facilities onto ratepayers while the company would only operate the plant and have no capital invested in the facility. This would fundamentally go against the efficient use of capital for consumers.

Although a slowing U.S. economy may present challenges, many municipalities are buffered by strong balance sheets. Hospital bonds have seen the most stress, and we do not expect a deviation from the lower historical default rate munis have exhibited relative to corporate bonds.

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.

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 bond’s credit quality is determined by private independent rating agencies such as Standard & Poor’s, Moody’s and Fitch. Credit quality designations range from high (AAA to AA) to medium (A to BBB) to low (BB, B, CCC, CC to C).

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% 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 3-31-2023

Industry Breakdown as of 3-31-2023

Top 5 States as of 3-31-2023

Growth of $10,000 Over 10 Years as of 03/31/2023

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 04/30/2023

Quarter End Average Annual Total Returns as of 03/31/2023

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 (0.75%) were 0.45%. The fund’s yield calculation is based on the holdings’ yield to maturity for prior 30 days; distribution may differ.

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.