Susan Filyk - IR Frank Holmes - CEO and Chief Investment Officer Lisa Callicotte - CFO Susan McGee - President and General Counsel

Welcome to the U.S. Global Investors Webcast, U.S. Global Investors' Results Announcement for the Third Quarter of Fiscal 2015. If you have any questions during the web cast, simply enter your question in dialogue box at the bottom of the screen and click submit. Also, you may download a PDF of today's slides by clicking on the Resources tab in the top center area of your screen. To switch back to the presentation, just click the Slide tab. We would like to begin by introducing Susan Filyk, Investor Relations at U.S. Global Investors. Ms. Filyk?

Thank you. Welcome everyone to our web cast announcing results for the quarter ended March 31st, 2015. The presenters for today's program are Frank Holmes, U.S. Global Investors' CEO and Chief Investment Officer; Susan McGee, President and General Counsel; and Lisa Callicotte, Chief Financial Officer. During this web cast, we may make forward-looking statements about our relative business outlook. Any forward-looking statements and all other statements made during this web cast, that don't pertain to historical facts, are subject to risk and uncertainties that may materially affect actual results. Please refer to our press release and corresponding Form 10-Q filing for more detail on factors that could cause actual results to differ materially from any described today in forward-looking statements. Any such statements are made as of today and U.S. Global Investors accepts no obligation to update them in the future. If you have a question for us, you can submit it at any time during the web cast. Simply type your question in the dialogue box at the bottom of the screen and click Submit. If we aren't able to answer your question during the live presentation, we will follow-up with you individually. Now let's go to Frank Holmes, CEO and CIO for an overview of the quarter. Frank?

Thank you, Susan. U.S. Global Investors' innovative investment management with vast experience in the global markets, and we specialize in very specialized sectors. The company was found as an investment club. And the company became a registered investment advisor in 1968, and was predominantly in the military. It was a group of military officers that started investing to create this company, and [indiscernible] grown, and is well known for his expertise in gold and precious metals, natural resources in emerging markets. Our strengths at GROW, as a go-to exposure for emerging markets and resources. I will then sort of highlight in the presentation, some of the challenges we have experienced in this sector, which always show up in trends, born [ph] themselves into where our source of revenue or in cash flow, that the emerging markets and resources have had some big challenges, since 2011. But importantly, we have been debt free and with a strong balance sheet, with a reflexive cost structure. Always costs are a little lagged when prices of assets decline, but we do have a very reflexive cost structure. We have been available to maintain a multi-dividend and a return on equity discipline. Lisa Callicotte will be able to highlight and describe that in more greater detail. The top institutional investors, I wish to thank them all for the support, and our vision as a resource entity and to emerging markets also, a strong relationship between the success of emerging markets, and which are the drivers of resources. Our investors, as you can see, are broad and diversified, in addition to a large following retail investors, in particular, through newsletter writers. We have been able to maintain those dividends for seven years, and currently have a penny per share, the current yield is 1.88%. Also during this period, the company has had a very strong thought process, a philosophy that during buying on dips, where there is great value, intellectual value in capital and these things always will revert to mean. We believe long term, that emerging markets resources will revert and change, but at the same time, we recognize that we have to change in our product lineup on what's important for investors, and we are going to comment a little further in the program, but during this process, the Board has approved to repurchase up to $2.75 million of its outstanding common stock in the open markets for calendar 2015, and during the third fiscal quarter 2015, the company repurchased 19,245 class A shares, using cash of approximately $60,000. We use an algorithm, which is used to buyback shares in down days, and in accordance with all applicable rules and regulations, that restricts amounts and times of repurchase in any one day. This program maybe suspended or discontinued at any time, but so far, we have a philosophy that's important, to be buying in these down days. The current product line up, as you can see, our Gold and Product metals, our Natural Resources, our China region, and our short term muni, in particular, highlighting [indiscernible] on that throughout the presentation. Domestic Equities and Emerging Europe. Then I would try and comment about Emerging Europe, and our position from a year ago, when we left Russia, 50% of that index is focused on Russia, and then we came back in to be able to capture the opportunity, and try to minimize the risk that was taking place. But most important is, getting the structure in place and launching our first ETF, which I will comment on and Susan McGee will also comment on further throughout the presentation. The vision for future growth are ETFs and we launched our first smart beta ETF on the global airline industry. U.S. Global Investors is an investment advisor to the U.S. Global Jet ETF. We formed a strategic relationship with U.S. Bancorp, Fund Services ETF Series solutions for offering, and this allowed to fast track the process of getting this product out. We invested a considerable amount of time, over time, weekends, effort resources for launching this product, and there are so many new challenges for us and factors to be able to consider, it is very different than the distribution of a mutual fund. But building for future growth, continuing developing innovative and dynamic ETF products to expand our product line-up and revenue streams, 65% ownership of Galileo Global Equity Advisors, a Canadian asset management company, and earnings valuable exposure of our brand in over 170 countries, through the publishing of our financial commentary, and award winning original content. So the key themes on the next visual, choosing [ph] for simplicity, is our approach to building performance as simple and continuous. I'd always comment that its never fast enough for me, and that's as important is trying to get a culture that embraces the new world; the new world being the world of ETFs and the flows of ETFs, and how that's structurally changing an antiquated expensive mutual fund program. Just the cost for board meetings for mutual funds, the cost for a distribution, everything is so different when it comes to ETFs, and one of the key factors, is that ETFs can't be much less expensive to function and operate on, and allow your intellectual capital to be cut up and looking for fantastic products for investors. So the most recent product is, to us, is exciting for many reasons, and it fits right into our theory of buying stocks which are growing at a reasonable price, GARP stocks. Second of all, if you don't like the sector, you can go short, and do that with mutual funds; and if you like the sector, you can go along. And if you prefer only three stocks of that sector, and you will lower your beta, which many hedge funds do. You go along with the stocks you like, and you can short that ETF in that industry category. Vice-versa, you could turn around and short three stocks, but you want to lower your risk and you can go along with that ETF. So this product has many dimensions to a broader, more diverse group of investors, that have different theories of both extracting capital to market and building wealth. So with that, we are very caught up with streamlining for stability, our cost structure with the mutual funds, building our capability in ETFs, looking for acquisitions, and also, being very conscientious of how do we drive down our cost structure to be competitive, and it is something that, clearly as you saw that we have lost money, and its very psychologically difficult, emotionally challenging, and its how fast we reposition the assets for growth in another product line. Fortunately, when we are in a good cash position, we don't do that. On page 13, you can see that we have been streamlining in many different categories, and we are always taking look at how do we streamline more. We are looking at partnering with people that have the unique special intellectual capital, as consultants to our entity, that are important for us, that intellectual robustness that's necessary in ETF category. So that we can minimalize any mistakes and be able to move more quickly with confidence in capturing opportunity, because I really feel we have been slow at getting our product out, but I am very thrilled about the product, because a product doesn't have any competition in this category at this time, and say trade to the multiple half of the S&P 500 and have the transport index. And it is growing. So, this is the positive part. So when you look at our visuals, we see here, quarterly asset average to the management. They have been declining. Galileo has a big exposure in Canada, and that's where its based, and it has a -- well I think over 30% was in energy, and energy stocks took it on the chin last year, particularly in the second half, in the fourth quarter. But I think that, it stabilized in Canada. And the also factor is that, Canada's currency, the largest source of foreign currency for Canada is exporting oil. So when oil falls, the Canadian dollar declined. So that asset has declined relative to just on the currency plank, and that has planked many-many S&P 500 companies. This decline in other countries' currencies, in our analysis we noticed that Australian currencies fell down more than Canadian dollar, that's because their largest source of foreign currency comes from exporting iron ore to China. So China is no longer with their mega infrastructure projects. What happens there is the exporting of iron, that has a great impact, just like Canada's oil. So these challenges are affecting Proctor and Gamble, they are affecting many-many major corporations in America. Tiffany's, which is in a space of jewelry, has lamented the strong dollar's impact to them. So we are experiencing that, not only the acquisitions, but its also it is in the product lineup that we have. And it’s a matter of repositioning and staying strong through this, because they do come back, and I'd also reiterate that the management at Galileo is doing a great job in what they are doing in the challenging times of having exposed to resources. Fortunately this quarter, we have had a rebound, and that's positive for the psychology of markets, and for investors in Canada, as well as [indiscernible] resource fund. But going to a big picture on slide number 15, and I think its so important to take a look at emerging market outflows. They have eclipsed the financial crunch levels. They are much greater, and we are experiencing that. Not only do we see hot money moving from one emerging market ETF to the other, but its just also the mutual fund industry as a whole, seeing the decline taking place. But the smartest and fastest growing emerging market ETFs are the ones that are hedging, and even buying very developed G7 countries. Its hedging with an ETF for Japan, and the fastest growing this year has been Europe, who has been devaluing the country's currency, so if you bought Europe, you would have lost money. However, you would hedge the euro, you've actually done it exceptionally well, and the European market has been rising. So I think that its important to recognize this idea of being able to hedge a position embedded into the product. ETFs are much better for that structure. The next visual showing you -- coming back to the divergence between domestic stocks, gold and mining companies in emerging markets. You could see the S&P, since the crash of 2008, in particular of 2011, has been in a steady climb, versus ETFs or the gold mining industries are classic examples, which relate to our funds, have been on a decline. And then, we have also seen, where emerging markets have basically gone sideways, risen, fall, risen, fall. The next visual, is a key factor that recognized the correlation. We have printed on this, we published on this many-many times the importance of understanding that PMI, the purchasing manufacturers index is a forecaster of what's expected over the next six months. Its updated every month, its highly correlated demand for commodities, in particular for iron ore, and oil and copper. So what we have seen here, is the biggest -- characterize China as the biggest commodity hedge book in the world. Whenever China needs, you get along, and whenever they have extra, get out of the way, and they have cut back on their huge infrastructure projects, to the degree that they had in pre or post 2008 was only for a couple of years, but pre-2008, from 2001 to 2008, they were the largest demands, I guess guerilla [ph] for commodities, because of their major projects. Now they are streamlining those for railways and for subway systems, but they have deregulated their whole financial sector, and they have been deregulating the ability to get patents on technology, and we have witnessed a huge technological boom in China. We have witnessed these stocks have been on a tear. So its interesting to watch, versus commodities versus non-commodities, and this technology boom was experienced in Americas, also showing in a place like China. But for us, this China's PMI and the global PMI is highly correlated to commodities, which we have in many funds, and which have negatively impacted our overall asset level, which is [indiscernible] effect and ramifications, is affecting our revenues and earnings. But skipping forward, you can see the composition hasn't changed much, but most important is the balance sheet. The balance sheet still remains healthy and robust. Cash levels are just really a factor of repositioning the cash, so that it has a higher income. There are still very liquid investments overall, and we are looking at making sure that this quarter, that we are repositioned to cut their cost structure even further, which Lisa can try to comment on what -- that sort of likes to takes place, between falling asset prices and the commodities. Fortunately, we have seen -- it appears to be a bottom in the redemptions in our resource sector of funds. In the next visuals 20 -- just highlighting the decline in our earnings, and you can see that it is not as severe as 2013, but it is still quite painful. Its painful, because we just don't like to lose, and we are in a performance culture and we hate losing and we just love winning. And just a key factor, so that's why we are repositioning, like the Spurs had to reposition their lineup on their players for a season next year, we have to reposition our product line-up and some of the key people we need to build on this ETF space. The next visual is showing you the GROW peer comparisons. We have growth investors, value investors, and income investors, and we like to highlight with that; growth is not pretty, particularly because our peers are dominating with bond funds, or domestic equity funds. And we are dominated with emerging markets and resources. The three year returns on our capital have declined, and this is something I have always been very-very sensitive and cognizant of, is what we do to turnaround that we get higher returns of equity for U.S. Global. Historically, prior to 2011, even through these ups and downs, we always generated on a three year return, superior returns on equity, and that's an important number that we are gaining for. The next visual is showing you what's happened in the long term to GROW, and its 2.9 long term annualized rate of return, is just a reflection of the resource in commodity market. And as you can see, this whole peak took place net income 2007, and there was a rebound coming out of 2008, as you can see, in 2009, but for emerging markets resources, it has been nothing but in a very slow decline. Hopefully, we get this turn taking place shortly. In the event we don't, we will have a product line that assures us, that we are not just subject to the growth and opportunities of emerging markets and resources, we will build up the other categories, the other asset classes. But interesting for us on visual number 23, is that the great following and I want to thank all the shareholders, as we weather this storm, that our stock at a relative basis, compared to other stocks that are in Canada, that are in this category of resources, etcetera, we have outperformed them, and a lot of that has to do with the loyalty and the confidence of our shareholders in our company; and the management, the team inside. There is a corps of people that have been so key to launching this ETF; Susan McGee, Susan Filyk, have been really key executives in repositioning and pushing and pushing to get this product and making sure that we understand the landscape and why its different, and what we have to do to be effective. The next visual is Lisa Callicotte, CFO, that is basically blocking and tackling and dealing with these negative numbers in a most positive way, and trying to find ways to streamline and refocus what we are doing as a company. So now I am going to turn the ball over to Lisa.

Thank you, Frank. Good morning. I'd like to summarize our results of operations for the quarter ended March 31, 2015. And as I discuss our financial results, a significant change compared to the same quarter last year, is due to obtaining controlling interest in Galileo in June 2014, and consolidating Galileo's balance sheet and income statement into our financial statement. Therefore these statements increase by the amount we consolidated for Galileo. Beginning on page 26, we recorded total operating revenues of $1.8 million for the quarter. This is a 33% decrease from the $2.7 million we reported from the same quarter last year. And as discussed, this decrease is primarily due to decrease in our mutual funds assets under management, that was offset by the Galileo revenue. Moving on to page 27, operating expenses for the quarter were $3 million, a decrease of $108,000 or 3%, primarily due to employee compensation and benefits decreasing $135,000 or 9%, as a result of fewer employees and lower performance based bonuses, again, offset due to the addition of the Galileo expenses. And on page 28, we see that our operating loss for the quarter for March 31, 2015 is $1.2 million, and our other income, which is income related to our investments, is $249,000 for the quarter. Our net loss attributable to USGI after taxes for the quarter is $1 million, and as you can see on page 29, it’s a loss of $0.07 per share. Moving on to page 30, we see our strong balance sheet that has already been discussed. We own our own building. We have cash and marketable securities of $2.4 million, that combines to make up 74% of our total assets. And as you can see on page 31, we still have no long term debt. The company has a net working capital of $21.1 million, and a current ratio of 14.3 to 1. With that, I'd like to turn it over to Susan McGee.

Thank you, Lisa. Performance and being results oriented are two of our core value to U.S. Global Investors and one of the ways that these values are demonstrated, is through our leadership in investment performance. During the past quarter, our sales and marketing efforts have focused on one of our top ranked funds, the Near Term Tax Free Fund, which has delivered consistent positive performance. In fact, if you look back for the last 20 years, out of 25,000 equity mutual and bond funds, only 30 of the 25,000 have had consecutive positive annual returns, and we are very proud that our Near Term Tax Free Fund is one of the few. As investors and financial advisors contemplate, the eventual interest rate increases or the stock market corrections, they tell us that they do value the history of no-drama performance that this fund has provided during the up and down market. So if you do compare the S&P 500 to near term, since the year 2000, you will see that it took the S&P 13 years past the stated growth of the Near Term Funds. We had two of our funds on the Morningstar four star rating for overall performance. Again, Near Term and the Municipal National Short Term funds category and also our Gold and Precious Metals fund, and the Equity Precious Metals fund category. We are pleased that two of our funds, also hold the top Lipper leader rating. This rating is based on investor centered criteria, and on a scale of one to five, Lipper Leader funds, that rate of five, we are in the top 20% of their category. So the near term tax free fund again and our U.S. government securities ultra short-bond fund, both rate are five for preservation. As Frank mentioned earlier, the company rang in [ph] last month, with the launch of our First Exchange Traded fund. We have seen ETFs just growing tremendously in the past few years, and we recognize that it was important for our company to evolve with this trend. We see ETF increasingly the preferred investment vehicle for retail investors, financial advisors, and even in the institutional marketplace. We started our strategic process of expanding our product line two years ago, and we decided the time was right to offer an ETF focused on the airlines industry. We recognized that this industry's significant restructuring in recent years have contributed to the industry's financial success and also prospects for future growth. Yes, there was no ETF currently available to meet investor demand for the sector. We are using a smart beta index strategy, for the U.S. Global Jet ETF. Smart beta strategies are designed to add value to the traditional market cap factor, by looking at and selecting waitings and rebalancings based on other fundamental factors. As Frank also mentioned, launching the ETF was a prolonged process, as Exchange Traded Funds have a very different landscape than mutual funds. From operations to marketing and distribution, we invested quite a bit of time in [indiscernible] and building our intellectual capital, we thought that service providers, product partners, we tested our investment models and we developed some extensive marketing plans. The Jets ETF launched on April 30th, it was listed on the New York Stock Exchange and we had substantial media coverage. We had Bloomberg, Barron's, The Financial Times, FOX and Forbes, all covering the ETF. In just two weeks, sets have [ph] grown to 16 million and our trading volume is very healthy. In addition to the publicity that I just mentioned for Jets, the company and our funds continue to receive an invaluable amount of earned media, which is free barrel publicity gains when we share our content with third party sources, and this helps us to leverage our brand by reaching millions of readers, viewers and potential investors. We are also interacting frequently, with followers to our email, Facebook, Twitter and LinkedIn. Our investment team continue to be sought out by the financial media to discuss natural resources in domestic and emerging markets. Based in energy [ph] the past quarter by the Wall Street Journal, Bloomberg, Reuters and many more. Kitco News, which we have mentioned previously, its one of the biggest gold web sites in the world, with an audience of 10 million monthly visitors features our Gold Game Film show with Frank Holmes weekly gold market analysis and so far to-date, we have aired 62 episodes of the Gold Game Films. In addition, we also had many influential financial newsletter writers recommend our funds to their subscribers. U.S. Global is known for our timely and balanced market insights and thought leadership. We have earned quite a bit of recognition as an industry leader and investor education. We have received a total of 64 awards since 2007, and investors can sign up for award winning Investor Alert and Advisor Alert, these are our weekly E-Newsletters, or you can subscribe to our CEO Blog, Frank Talk, at our web site, usfunds.com, and we encourage you to do so, if you have not. And now I would like to turn it back over to Frank, who will discuss what we have been watching in the markets recently.

Thank you, Susan. I'd like to go back to the slide on 44, the airline stocks defied high fuel costs. One of the things in launching a products, its so important that you grasp all the difference of distribution and also creating a product that relates to you as a money manager. We know that there is lots of people that create products, that are just product developers, and they don't come from a money management perspective. But one of the things that I noticed is, I fly 100 times a year, I got 8 million miles, and I was complaining to all the airlines of what the cost of these were? And said, how do we go ahead to make money, and I found that there was this new direct non-stop flight from Alaska Airlines from San Antonio to Seattle, was that they are at the cost of American and better service. So we did the fundamental analysis, we bought it, and the stock has done spectacularly well for our portfolios. And it means more interested in the space and the idea of coming out with the ETF, we said, where is the space where no one is, and we found that this is the space. There was an ETF, and it is shutdown, but it was just unfortunate timing for them, because it was the best time to actually launch an airlines ETF, because industry, there was so much pain and restructure 70% being bankrupt, and now they came up with 25% less flights. There are many key factors in this in. Some fees were going to rise, and we have all experienced, they charge you for baggage, they charge you -- doesn't matter if you are a platinum or diamond level, they charge you $200 fee to change your ticket. So they were making money, even as you can see in this visual, when oil was $100 a barrel. And this industry, in which many of these airlines stock in our portfolios, starts to truly have those extra run-up with the price of oil falling, but what's important for investors is, they were hedged, they were starting to make money and these stocks were doubling already in 2014. The best performing stock last year in the S&P 500 was Southwest Airlines. And why was that? What were the factors behind that? So we think that this is a category, that is really interesting, and in our further analysis, is that it trades at nine times PE ratio and trains and trucks trade at 19 times. So as GARP investors, there is an investment philosophy at U.S. Global, this category is attractive for us for our active portfolios, and we think that not only that's an important part for going forward for our product lineup, is where do we position? Because in the ETF space, its difficult to carve out a sheer percentage of your assets of that industry, if you're the fifth mover there -- or you're the fourth mover there, you have to be one, two and three, otherwise forget it, is what happens in that category. What has been changing in some of these categories is smart beta, and that has been important for investors, and that has been dominating most of the flows in this whole category. So we are happy that A, we have got a product, that has very attractive fundamentals in growth. We are witnessing, and we have written about this, that CEOs of American Airlines have come out to buy back their stock, take compensation in owning a stock. So there is a very positive side for this category. What's interesting, should bode well, because I just saw this week that Singapore Airlines, that their results were up 60 some odd percent. So there is some real positive news that's taking place, and for those who want to play oil falling, this is a great asset class, is the opposite to that. So with that, I am going to try to talk a bit, both our Investor Alert, and what we have been publishing in the past year, to try to help investors to understand the market on a more timely basis on page 57, I'd like to jump back to Lisa, who can take me there. And U.S. oil rig count falls for the 15th week, but oil production continues to climb. What we wrote about last fall, was it takes about six months. That is when the rig starts to decline, that area, that the production -- that all of a sudden you start to see declining, and why is that? Because fracking has been the key technological breakthrough, that has allowed America to produce oil inexpensively. It’s a very disruptive process and new technology and sands etcetera. We have written for many years now, about this certain new technology in this space. But what happens in fracking, is that it takes about six months and the decline rates starts to go rapidly, and if you're not continuing to drill and explore, then your production starts to fall off. In simple terms, if you hit a well in South Texas 1,000 barrels a day, and you don't drill anymore. A year later, you will have 200 barrels a day, maybe 100 barrels a day from that well. So if you're not continuously redeploying your capital back into drilling, then that supply starts to decline. And it is now forecasting, that the supply is peaking in the U.S., and will start to decline. In anticipation of that, oil prices have come up off the bottom, and that oil stocks seem to have come up off their bottom. The next visual, is trying to put this in context, which we wrote about in May, is that the crude stockpiles at Cushing, Oklahoma for the first time in 22 weeks, were basically -- starting to see a plateau in that oil supply coming around the U.S. What's also interesting, is like déjà vu. Remember when it experiences some déjà vu, and stocks are important to take a look at patterns, and we wrote about this, in fact, while we have another visual that's similar to this last year. But the WTI crude is closely tracking the averages of previous bottoms. The last time we had such a big decline like this, was back in 1985, and you saw a big decline and then coming to the markets sort of a climb back [ph]. And its amazing how similar, what's taking place in this pattern. So we think that there will be a rebalancing, because there is such a huge amount of printing of money in Europe and Japan, that is just going to show up their economic activity and confidence now is picking up in Europe, its going to start to pick up in stronger oil demand. And we have also wrote about, that usually, at the bottom of these cycles, is that there are mega mergers, mega, like multi, multi billion dollar companies, all of a sudden, pulling together, just streamline their costs, they cut half of their engineers, they cut half of their geologists, which is the resource sector, and they go with the strongest muscle of brainpower they have in these corporations and reposition. And that's what we witnessed, only a couple of months ago. That was a pivot point. Sure, we saw last month, that Chinese were paying higher rates for Saudi oil, was basically to assure for refilling of their stockpiles. China also has strategic stockpiles like America, and they're refilling them. And with that, they had to pay higher than with the lower rates were at the bottom. These are all positive patterns for oil. Doesn't mean oil is going back to $100 a barrel in a quick three months, six months or a couple of years. But it does mean, that the odds favor for oil to slowly make a clawback to trade between $60 and $75 a barrel. This is good. This is very good for taxes. This is good for many of the states in America, because its not just the oil business, it’s the railway business. We have the ship sands, special sands at different levels, when they are drilling for fracking and conservation [ph], these are great paying jobs. This is a great way to invigorate economic prosperity across America. We also find that this sort of oils business, is that the activity when oil is around $60, $70 a barrel, that there is more flights and activity that for businesses, which is important with the airline industry. So there is this happy medium level and America seems to have adjusted to this range between $60 and $75 us good for continuous exploration development. Its good for overall job creation and industries that supply the -- the industry drillers, etcetera. So I think these are important factors to consider. Now on page number 60, was a pivot point. When the CEO bets his paycheck on the company stock, and that's what the CEO of American Airlines did. And what's interesting about American Airlines, is that you can see an airlines that does not hedge. Southwest Hedges; Alaska Air hedges. Delta has its own refinery. Many of these other airline companies hedge their business. So the CEO has to be very confident on the industry and in his own company, in his positioning to say, give me my compensation in stock, not cash, and we have seen other industry titans and leaders, such as the CEO of Oracle, Steve Jobs did it, and where they fell so comfortable with the growth of their company. So I think its very positive for companies like American Airlines. The next visual, as much as important that we are seeing, that out of 1.4 billion people in China, there is 140 million people estimated to be making close to $100,000 a year. Now that gets lost in a sea of 1.4 billion, where there is another same number of very poor people in China, coming at the sort of emerging market cycle. Now of that 140 million people, they want to travel. And what was noted, was if you go to Europe, you had to go through a country's embassy to get a Visa for Chinese people to go to Europe. So what do they go, they quickly Tweet to each other with WeChat, and they find out that the best country to go through, the best embassy which streamlined that process, was Spain. The French, no; Spain, yes. Guess what happens? Luxury goods spending jumps 25% in Spain, minus 4% in France. So the Chinese are going over, and you can see them all through Europe. They are very important for tourism. They are very important not just for the airline industry, but overall hotels, and we are seeing this in America. In America, I just love how competitive is the stealth. But if the U.S. comes over the 10-year tourist visa, and we are seeing now real estate being bought in New York, in LA, in San Francisco. People coming over back and forth to enjoy the greatness of America. The Chinese love America. They love the products of America, and this sort of new aspiring growth that's taking place from their wealth, it will be translating itself into visiting all of our malls, visiting the Grand Canyon, Las Vegas, Chicago, etcetera. So this is very important for global travel. The next visual, in my trips over to Asia, I commented. I thought it was interesting that some of the points were very quite negative. When I was in Hong Kong, that Lee Kuan Yew had passed away, and I immediately tried to comment to these reporters that you must take a look at what took place. We are so close to America's Cuba. This is a blog that we put together and say no, we are certainly over the world, and it is a great blog to go visit our web site on. Its two worlds. I showed photographs of what Havana looked like 50 years ago, compared to Singapore, they look the same. And if you go back 50 years ago, the GDP per capita of Kenya, was less than Singapore. And today, neither Kenya nor Cuba even come close to economic development, and basically, Cuba is still run like a massive plantation controlled by one corporation, controlled by the Castro family. Whereas Lee Kuan Yew had created economic prosperity, he created the basic for sovereign fund. He created a program that was so robust compared to 401(k) that people could turn around and create a forced savings plan, where their salaries -- 20% of your salary had to go put into a fund, and that fund, that the employees were able to go forward and buy their condos in Singapore. He reclaimed land for Singapore. Its really quite amazing when you take a look at how poor it was on those photographs, and where it is as a leader of GDP per capita, and intellectual capital of educated people. So these type of articles go round the world, and it helps us with the following that we have in 80 countries, and I also think that for ETFs, foreign people are not able to buy our mutual funds with all the rules and regulations, in particular, FATCA, but they are able to buy a New York listed ETF. So we think that this is very positive, not only for global travelers I mentioned earlier, but the fact that we have a global footprint. We are followed in our thoughts around the world, and now we are going to come up with products which will not only be for America, but will be for the world. So this makes our future look very exciting. Now we need to come back to where we are well known for, it's gold. We previously commented on China and India growth, has spurred gold demand. The fear trade, I have written about this so often, is key to look at negative interest rates. In 2011, when gold hit 1,900, the 10-year U.S. government bond was minus 3% yield, minus 300 basis points, to lose money over 10 years, and that's when the dollar was the weakest. And then it swings to plus 2%. That swing of 500 basis points in the 10-year bond, is significant in the price of gold declining. That's the fear trade. The luck trade, on the other hand, is the rise of GDP in emerging countries, particularly India and China. India, the stronger their GDP is per capita, the stronger the consumption of gold. And we are seeing that the gold trade that India has picked up from a year ago, we are also seeing the same thing with China. But we think something else is more significant with China. There is some geopolitics important for investors, is realize that China wants to be at the table of global events. They want to be at the table with America and they want to have a currency that is globally appreciated, respected, and traded and recognized. And the only way to do that, is to back it with some gold; and we have seen nothing but continuous consumption by gold in China. We are seeing it witnessing BRICS leaving America, we wrote about this a year ago. They are going to Switzerland. They are being melted down to smaller coins. They are going over to China. First, they were going to Hong Kong, we could track that. Then go to Shanghai. And now the Chinese made Shanghai a tax free zone. For financials, they are now making it worse, is the price maker for determining the price of gold everyday. It is the largest physical delivery of gold, and we believe that we are going to see the Chinese going to come out and show that they have a huge exposure to gold, which will back the renminbi, so that later this year, when they go to the IMF, that they want special drawing rights, so their renminbi becomes a global currency. That will be like the U.S. dollar, which has dominated global trade. So these factors, all bode well for gold. I have always said that, it amazes me that the Treasury Department of U.S. keeps gold. They have the highest position of gold in the world, as a backup currency. However, so many investors in New York don't believe gold. However, the Federal Reserve does not trust all the government's currencies, it trusts gold. So we have always articulated that we think its just rational logic to have a 10% waiting in gold, 5% in bullion or gold coins or jewelry. 5% in gold stocks, and rebounce each year. The world is not coming to an end. There will always be imbalances between monitoring fiscal policies, between any country, and gold is a great protector. So I am trying to really articulate and its just part of overall portfolio, its not something buy that the world's coming to an end. You just buy it because its just prudent, like it is buying insurance for driving your car. Now the next visual, is the Shanghai Composite, is that we recommended this in September 22nd, that there was a breakout. No one believed it. We had nothing, but some negative -- [indiscernible] about China. We mentioned actually last spring, is that China was starting to deregulate. They were doing something that we have not experienced yet in the U.S., where fiscal policy becomes key. Tax free zones is a fiscal policy. Infrastructure spending is a fiscal policy. And what you saw in China, was fiscal policy, is to deregulate and streamline regulations for getting patents. For technology, and for innovation, and then we start to see a take-off in this whole category and we have seen a boom in technology stocks; and we have seen that, even though the infrastructure spendings decline, we have seen this huge boom in the stock market, and it was trading at the lowest PE ratios of all emerging markets in the world. And now, its just reversing to the mean. Its up 120% since we wrote about it last September. Now a lot of that took place in shares, which investors in America aren't able to buy. But what you're able to buy are eight shares in China. Some of the ETFs have been able to buy, with a small allotment, some of these shares but ourselves. What we found is that the eight shares give you that liquidity, and there are ADRs in America that allow you to do that, and we are able to participate, and that has helped our China region opportunity fund enjoy this rebound that's taking place. Definitely, not 100% investment in Shanghai, but having exposure through the eight shares -- which are Shanghai companies listed in Hong Kong, is to allow us to enjoy a nice substantial rebound in this category. The next visual showing you, coming back to gold, is that there is a very strong inverse relationship. I explained to you that the fear trade is driven by negative real interest rates, but we can take a look in simplistic terms about the inverse relationship. It looks like, if you like math, co-sine and sine waves, that when a dollar is strong, gold is down, and when the gold is strong, the dollar is down. It is showing you, that the dollar is actually overbought in March, and gold is oversold. Now, gold is not extremely oversold as it was earlier this year, and it has made a bit of a rebound, but gold is oversold relative to the dollar, and the dollar appears that it is starting to come off from this peak, which we highlighted on March 20th. So if you have not yet subscribed to the investor alert, I highly urge you to be a subscriber, and give ideas and comments you want to send to us. We are always curious to learn and improve at U.S. Global. The next visual will show you that gold is flirting with five year lows, as the U.S. dollar remains strong. We believe its important to look at different time periods. What is the three month, what is the five year, what is a 10-year, what is the 20-year, to put things in relative context. The other part that's interesting, the euro has been weak and gold and euro turns has had its wonderful run. So being diversified in gold, is important for Europeans as well. We have printed this visual and shown it on our web site in Japan. We show this in many presentations I gave last year, throughout North America, in Asia, in Europe, that this inverse relationship has been important for Japanese investors, for American investors and for European investors. The next visual showing that global investors see best opportunities in Europe. This is important showing up in many data points, and its because they reclaim their economy. But what happens is, they devalue their country's currency, they make money cheap, and that helps exports and helps people get loans to refinance the company and businesses. The stocks start to take off. But also the governments in Europe. This is very important. Its very-very important. Governments in Europe have been repaying their economy. They have been buying back their own bonds, and redeploying that money in their own stock market. We commented about this -- Japan has been doing. That almost 2% of the Japanese stock market is owned by their Central Bank. And the same thing in Switzerland. So why not? If the Swiss are offering zero interest rates for five years and some of their great corporations, such as their fabulous chocolate exporter, they are offering a 3% dividend. So you are seeing, in Switzerland, that they are basically -- their central bank is buying their own stock market, and the Swiss stocks have been on the tear. So this is reporting to recognize, this has been taking place through the world. Except for America, the Federal Reserve is not able to go and buy shares directly at companies, but I believe that they can come through in stabilizing markets, the futures market in some form or fashion and using that. But other countries have a stronger mandate by the Federal Reserve, that they can buy shares in their own country. The next one showing you that there is reflating of their economy. Like we did in QE 1, 2, and 3, that was a significant boom for the stock market in America. That is now starting to take place the eurozone. So if you're reading the U.S. Global Investors Alert, that's great. If not, sign up. And as I said earlier, we also have the frame talk for sort of specials -- a report I'd like to put out when I am traveling around the world, to be commenting, I'd be off to Asia next week. I am going over to speak in Singapore, and try to highlight what I think and see, what I feel, and because I believe -- I believe that its important to get that rope, that sort of local feel, read the local newspapers, talk to local CEOs, talk to the media, get a flavor for what's happening locally, that you just don't get -- really get a feel for in reading U.S. papers. And as a combination, when they are over in Singapore, they don't really understand America to that great degree unless they are over here, talking to people, and that's our arbitrage, the tacit and explicit knowledge that is reading material, reading and then talking to the people. So I am excited to report about that in my travels. So now I'd like to open it up, rein on time for Q&A A - Susan Filyk: Thank you, Frank. Now we will take some questions. Frank, some have been calling for us to bottom in commodities. Do you see that inflexion point?

It’s a great question. I hope so, but hope is not going to help with this process; because reality is, is that Macquarie had a great piece of research when I was speaking in Doha. And the analysts there said that $1 trillion was spent on mining alone. $1 trillion over a 15 year period. Other than that $1 trillion, $300 billion were spent on iron ore, and $300 billion were spent on coal, and we have 20 years of excess supply of iron ore and coal. $150 billion are spent on goal. $150 billion was estimated to be spent on copper. This is where supply is much tighter, and the other number is, platinum-palladium, is even substantially less. Platinum-palladium you need for cars and trains and -- sorry, for cars and trucks; and so it bodes well to any supply disruption that comes out of South Africa or Russia, can have a very swift impact on rising prices for platinum-palladium. Copper, we are seeing that there has been geopolitics in countries like Chile, who elected a socialist president, who gave all the power to the unions and is sad, because 40% of their foreign currency comes from copper. The unions have done everything to stifle any economic development, and their economy is contracting rapidly. They are taxing all their middle class. They are looking to run for dollars. We have seen the same thing in Colombia. So the supply coming out of commodities of Colombia have been falling, with the supply of copper coming out of Chile, has been falling, and I think that the idea that copper, which has rebounded here, probably trades higher, and we have seen the same thing for many emerging countries, very excessive tax regimes. Where you're seeing money is not going to the development of copper or gold deposits. So I think it will be more bullish on that sentiment. When it comes to oil and gas, as I mentioned earlier, I think it will probably get a resting place. Oil will trade between $60 and $75. I see that Mexico has opened up their economy for the first time, but more important last week -- sorry this week, there were policy changes to Mexico, to allow new companies, new venture capitals to go way of small capital companies, out of the U.S. and Canada that can form capital and go in there. That was very-very difficult on their original policies only six months ago, and that's changing. So we will probably see, it will be a boom time for Mexico. So I think from that end, commodities are going to be selective. One has to be just cognizant of that selectivity. What would change that, would be fiscal policy changes in America. America could come with infrastructure. We brought about this back in 2006 and 2007. They came with a federal policy on rebuilding the country. When we see, when we drilled down, where tax dollars in various states don't go back to the road, its 100%. In the state of Texas, we have spectacular roads. When you pay at the gas pump, a 100% of that money goes back into the construction of roads, which creates jobs, which makes also better roads. That doesn't happen in the Northeast. Allow that money to be diverted towards other spending, welfare spending. So you have to get something, that's something on a tax -- there's transparency, and all the money goes back into rebuilding our railway system, which clearly and tragically needs it and we have seen this. My heart goes out to all of those people in the Northeast, that have the related families and relatives on that tragedy, but its really key that America has a policy that is federal, that is about rebuilding its infrastructure. This will create a lot of jobs, and also make buildings and the roads will be more efficient. So with that, and until that happens, we are going to be have to be very selective of what commodities will be taking off. And that's why we believe we need active money management.

Thank you, Frank. We are just about of time, but we will take one more question. Susan, you mentioned that the landscape is different for ETFs than mutual funds. Can you talk more about that in terms of marketing and distribution strategy? Yes, what we have focused on previously with our mutual funds is more direct, one-on-one type of interaction with investors. And what we are going to transition to, with the ETF, is more of a global branding strategy, and efforts there more on a PR, and more newsworthy globally efforts, as you've mentioned.

Any other financial questions?

Not at this time. I think we are out of time.

Sorry, Lisa.

This will conclude U.S. Global Investors' web cast for the third quarter of fiscal 2015. The presentation will be made available for replay on our web site at usfunds.com. Thank you all for your participation today.