AUS
NZ
UK
CA
USA
IND
U.S. Global Investors, Inc. (NASDAQ:GROW), a leading registered investment advisory firm known for its expertise in global markets and specialized sectors such as gold mining and airlines, has announced its financial results for the fiscal year ended June 30, 2024. The Company reported operating revenues of approximately $11 million, with net income of $1.3 million. This represents a decrease from $3.1 million in the previous year, primarily due to a reduction in advisory fees linked to a decline in assets under management (AUM).
For the fiscal year 2024, average AUM was $1.9 billion, and total AUM stood at nearly $1.6 billion as of June 30, 2024. This marks a decrease from $2.4 billion the previous year. Despite this dip, U.S. Global Investors experienced a significant boost in net investment income, which surged to $2.1 million—a remarkable increase of 578% compared to the prior year.
The challenging macroeconomic environment, characterized by a prolonged inversion of the yield curve, played a role in the Company’s performance. The inversion, where the yield on two-year Treasury notes exceeded that of ten-year notes, lasted a record 783 days before normalizing. Historically, such inversions are considered a recession indicator and contributed to weakened investor sentiment towards sectors sensitive to economic downturns, such as airlines.
Despite the broader economic concerns, the fundamentals of the airline industry remained strong, with robust growth in passenger numbers, revenue, and cash flow. However, many investors chose to reduce their exposure to this sector during the period of inversion, impacting related investments like the U.S. Global Jets ETF (NYSE:JETS).
With the yield curve now normalized, U.S. Global Investors anticipates a potential shift in market sentiment that could signal renewed confidence in economic stability. Frank Holmes, CEO of U.S. Global Investors, commented on the situation: “While we cannot control external factors such as geopolitics, interest rates, taxes, or regulations, we can manage our internal processes effectively. Our focus remains on robust governance, compliance, and our smart beta 2.0 approach to developing thematic ETF products, which blends quantitative and fundamental analysis.”
Holmes expressed optimism about future market conditions, particularly following the yield curve's reversal in September. He highlighted the significant correlation between the yield curve inversion and redemptions in the U.S. Global Jets ETF, underscoring the potential for improved investor sentiment moving forward.
