U S GLOBAL INVESTORS INC Q4 FY2024 earnings call

• U.S. Global Investors uses a quantum mental strategy, a fusion of quant math and fundamental analysis, to create smart beta 2.0 products, capturing thematic trends.
• The company buys back stock using an algorithm on flat or down trading days as it believes the stock is undervalued.
• There was a merger of Europe-Domiciled Airlines ETF into Travel UCITS ETF (TRIP) on the London Stock Exchange.
• Compensation structure is performance-oriented: Employee base salaries are modest, and bonuses are tied to individual and team results. The CEO's bonus is linked to operating earnings, net realized gains on investments, and fund performance.
• Actively managed domestic equity ETFs have seen growth since 2022, contrasting with continued redemptions in actively managed domestic equity mutual funds.

U.S. Global Investors manages 6 mutual funds and 3 exchange-traded funds. Key product segments:

• JETS ETF: Saw close to a 100-fold increase in assets during COVID, but later experienced redemptions. Despite the airlines industry performing well, there was apathy towards the asset class.
• GOAU ETF: Saw a positive climb, up 14%, but assets under management hovered around $100 million.
• Financials: For the fiscal year, average assets under management were $1.9 billion, operating revenues were $11 million, and net income was $1.3 million or $0.09 per share. Operating revenues decreased by $4.1 million (37%) from the prior year, primarily due to decreases in assets under management, especially in the JETS ETF.

No explicit new forward-looking guidance provided. The company will continue strategies such as strategically buying back stock using an algorithm on flat/down days, managing cash for future growth opportunities and market corrections, and being vigilant for M&A activity to acquire other funds.

• Inverted yield curve has impacted sentiment towards certain asset classes, like airlines, leading to redemptions.
• Apathy towards certain asset classes, such as gold equities despite strong fundamentals.
• High costs associated with shutting down mutual funds, merging funds, and the proxy process, which impact operating cash flow.