In a release on
Average assets under management were
"A big external pressure affecting assets under management has been the fact that global gold equities declined three years in a row," says
In this challenging environment, the company has been focused on reducing costs and streamlining its products and services in the second fiscal quarter of 2014. Changes included converting a money market fund to an ultra-short government bond fund, closing the
"Accomplishing these strategic changes was expensive and time- consuming. Time is money and the length of time associated with the legal and regulatory processes increased one-time costs," says Holmes. "Moving forward from our period of transitioning, general and administrative expenses have been decreasing significantly in
During 2013, commodities experienced a turbulent year, with gold posting its first annual decline since 2000 and gold equities declining for a third year in a row.
"In the last three decades, a losing streak of three years has only happened three times for the Philadelphia Gold & Silver Index," says Holmes. "This most recent three-year decline has negatively affected GROW's revenues."
In addition, in the continued low interest rate environment, mutual fund companies have been hurt by voluntary money market fund fee waivers. According to Ignites, in 2013, fee waivers for the industry rose to a record high of
"By converting the
"We're pleased shareholders approved the conversion. Investors are thirsty for higher yields but do not want the risk of a long- term bond fund," says Holmes. "
"I'm pleased with the partnership that's developed between U.S. Global and Galileo and I'm looking forward to Galileo's continued growth," says Holmes. "Its flagship fund continues to be highly rated by Morningstar and pays dividends, both of which are very attractive to Canadian investors."
Share Repurchase Program, Continued Strong Balance Sheet, and Monthly Dividends
The company continued repurchasing outstanding stock in the second fiscal quarter totaling 28,227 class A shares using cash of
The change in cash and cash equivalents compared to last quarter was due to the company's investment in the
In addition, the company has had no long-term debt since 2004 and owns its headquarters building.
The global synchronized easing cycle continues, particularly in
"Throughout my travels, I often tell investors to follow where the money is going. Too often people get caught up in their political allegiance or parties, focus on the negative and lose confidence in stocks," says Holmes. "One example from 2013 is all the pessimism surrounding Obamacare, yet S&P 500 health care companies benefited, as the sector was the second-best performer.
"One opportunity we are seeing for 2014 is in gold stocks. Following three years of straight losses in the gold mining industry, miners are approaching the historical limits of multi- year declines," says Holmes.
"Investors have seen significant gains in domestic markets, and while there may be short-term corrections, we continue to see opportunities in U.S. stocks," says Holmes. "For the remainder of 2014, we believe the market will continue to favor high-quality, growth-at-a-reasonable price stocks. This trend bodes well for U.S. Global's domestic equity funds."
In 2013, the
In the last calendar year, the
"We believe the
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In a release on