U.S. Global Investors, Inc. (NASDAQ: GROW) (the “Company”), a
boutique registered investment advisory firm with longstanding
experience in global markets and specialized sectors, is happy to
announce it will continue its payment of a monthly dividend for the
second fiscal quarter of 2021. The Company has paid a monthly
dividend since June 2007.
The Company is also pleased to announce operating margin
expansion for the quarter ending September 30, 2020. As of June 30,
2020, the Company’s assets under management (AUM) were $1.7
billion, a more than threefold increase from a year earlier.
Correspondingly, total operating revenue has risen above the
average revenue from the previous four quarters, reflecting the
momentum in new fund flows. Quarter-over-quarter and year-over-year
results are positive in both top and bottom-line growth. Assets
have continued to grow in July, August and September, and are
currently over $2.2 billion. The increase in AUM is being primarily
driven by the Company’s U.S. Global Jets ETF (JETS).
“We have accomplished several milestones in 2020, including our
smart-beta 2.0 airlines ETF, JETS, breaking above $1 billion and
our smart-beta 2.0 gold mining ETF, the U.S. Global GO Gold and
Precious Metal Miners ETF (GOAU), surpassing $100 million in net
assets for the first time ever. Our ETFs have continued to grow,
and JETS is now over $1.6 billion and GOAU is over $119 million as
of September 21. We spent thousands of hours building and
backtesting the dynamic structure and factors for picking stocks in
both ETFs, and we’re very pleased that they’ve performed exactly as
we designed them to. Operating income margins are now expanding to
about 30 percent as assets have risen and marketing has become a
smaller portion of costs as a percentage of revenue,” says Frank
Holmes, The Company’s CEO and chief investment officer. “Rockets
require massive amounts of fuel to break free of the earth’s
gravity, and likewise, we’ve spent a lot of money in marketing to
get JETS and GOAU to these levels.”
The Company pays all expenses of the ETFs, and an estimation of
revenue based on AUM can be seen in the table below.
ETF ASSETS UNDER MANAGEMENT |
ETF EXPENSE RATIO |
ADVISER ETF REVENUE |
$100 Million |
60 Basis Points |
$600,000 |
$500 Million |
60 Basis Points |
$3 Million |
$2 Billion |
60 Basis Points |
$12 Million |
“As we noted in our fiscal year-end webcast on September 10, due
to accomplishing these milestones, we expect revenues to increase
due to the increase in AUM,” continued Mr. Holmes. “Although
we also expect expenses to increase, we do not expect them to grow
at the same rate as revenue, thus resulting in an expected
expansion of operating income margin. We are pleased with the
continued growth in our funds and are excited about the benefit
that this expected operating margin expansion will have for the
Company.”
Marketing Uses A.I. to Better Target and Brand
ETFs
“The Company has changed its digital marketing and branding
strategy with short educational videos and by using artificial
intelligence (AI) to expand our brand name as one of the go-to
asset management firm for the airline industry,” Mr. Holmes added.
“Marketing has strategically positioned the unique JETS story for
the past five years by consistently hosting over 20 educational
webinars for both retail investors and registered investment
advisors (RIAs). The strategy has been paying off with fund
flows.”
New Data Sets to Track Passengers Flying
The Investment team at U.S. Global Investors closely tracks data
provided by the Transportation Security Administration (TSA) of the
daily number of passengers cleared to fly in the U.S. Based on this
data, the team believes air travel continues to recover following
pandemic-related lockdown measures. The number of travelers during
Labor Day hit 935,308, a post-pandemic high and a sharp increase
from the low of 87,534 on April 14 date. An increase in air travel
could lead to a recovery in airline stocks, boosting the
performance of the JETS ETF.
GROW Continues Monthly Dividends
The Company’s board of directors approved payment of the $0.0025
per share per month dividend beginning in October 2020 and
continuing through December 2020. The record dates are October 12,
November 16 and December 14, and the payment dates will be October
26, November 30 and December 28.
At the September 21, 2020, closing price of $2.61, the $0.0025
monthly dividend equals a 1.15 percent yield on an annualized
basis.
The continuation of future cash dividends will be determined by
the Company’s board of directors, at its sole discretion, after
review of the Company's financial performance and other factors,
and is dependent on earnings, operations, capital requirements,
general financial condition of the Company and general business
conditions.
The Company has paid a monthly dividend since June 2007 and
management continues to buy back stock. We invite you to stay tuned
for the announcement of the date in November for the next earnings
webcast for the quarter ended September 30.
####
About U.S. Global Investors, Inc.
The story of U.S. Global Investors goes back more than 50 years
when it began as an investment club. Today, U.S. Global Investors,
Inc. (www.usfunds.com) is a registered investment adviser that
focuses on niche markets around the world. Headquartered in San
Antonio, Texas, the Company provides money management and other
services to U.S. Global Investors Funds and U.S. Global ETFs.
Forward-Looking Statements and Disclosure
This news release and other statements by U.S. Global Investors
may include certain “forward-looking statements,” including
statements relating to revenues, expenses and expectations
regarding market conditions. You can identify these forward-looking
statements by the use of words such as “outlook,” “believes,”
“expects,” “potential,” “opportunity,” “seeks,” “anticipates” or
other comparable words. Such statements involve certain risks and
uncertainties and should be read with corporate filings and other
important information on the Company’s website, www.usfunds.com, or
the Securities and Exchange Commission’s website at
www.sec.gov.
These filings, such as the Company’s annual report and Form
10-Q, should be read in conjunction with the other cautionary
statements that are included in this release. Future events could
differ materially from those anticipated in such statements and
there can be no assurance that such statements will prove accurate
and actual results may vary. The Company undertakes no obligation
to publicly update or review any forward-looking statements,
whether as a result of new information, future developments or
otherwise.
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.usglobaletfs.com. Read it
carefully before investing.
Investing involves risk, including the possible loss of
principal. Shares of any ETF are bought and sold at market price
(not NAV), may trade at a discount or premium to NAV and are not
individually redeemed from the funds. Brokerage commissions will
reduce returns. Because the funds concentrate their investments in
specific industries, the funds may be subject to greater risks and
fluctuations than a portfolio representing a broader range of
industries. The funds are non-diversified, meaning they may
concentrate more of their assets in a smaller number of issuers
than diversified funds. The funds invest in foreign securities
which involve greater volatility and political, economic and
currency risks and differences in accounting methods. These risks
are greater for investments in emerging markets. The funds may
invest in the securities of smaller-capitalization companies, which
may be more volatile than funds that invest in larger, more
established companies. The performance of the funds may diverge
from that of the index. Because the funds may employ a
representative sampling strategy and may also invest in securities
that are not included in the index, the funds may experience
tracking error to a greater extent than funds that seek to
replicate an index. The funds are not actively managed and may be
affected by a general decline in market segments related to the
index. Airline Companies may be adversely affected by a downturn in
economic conditions that can result in decreased demand for air
travel and may also be significantly affected by changes in fuel
prices, labor relations and insurance costs. 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.
Smart beta refers to investment strategies that emphasize the
use of alternative weighting schemes to traditional market
capitalization based indices.
JETS and GOAU are distributed by Quasar Distributors, LLC. U.S.
Global Investors is the investment adviser to JETS and GOAU.
Holly Schoenfeldt
U.S. Global Investors, Inc.
210.308.1268
hschoenfeldt@usfunds.com
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