US Global Investors Inc (GROW) 2014 Q3 法說會逐字稿

Welcome to the U.S. Global Investors webcast, U.S. Global Investors earnings announcement for third quarter of 2014. (Operator Instructions). Also, you may download a PDF of today's slides by clicking the resource tab in the top center of your screen. You can also download some of the U.S. Global Investors latest research on the resources tab. To switch back to the presentation click the slide tab.

We would like to begin by introducing Susan Filyk, Investor Relations at U.S. Global Investors. Ms. Filyk, please go ahead.

Thank you. Welcome, everyone, to our webcast announcing the results for the third quarter ended March 31, 2014. The presenters for today's program are Frank Holmes, U.S. Global Investors CEO and Chief Investment Officer, and Lisa Callicotte, Chief Financial Officer.

During this webcast we may make forward-looking statements about our relative business outlook. Any forward-looking statements and all other statements made during this webcast that don't pertain to historical facts are subject to risks 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 US 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 webcast. Simply type your question in the dialog box at the bottom of 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. As you can -- hop to slide number 4, we are a boutique publicly listed investment advisor specializing in gold, natural resources, emerging markets, domestic equities and muni bonds. But the real factor is that natural resources and emerging markets are a significant factor.

And one of the things that we have been able to try to highlight to investors is that the real growth on a global scale has peaked in 2011 at 5.4% real growth and last year ended at 3%. It's hopeful that next year -- the second half of this year, 2014 that there will be a rebound back to 3.5%. And we have seen, as you will walk through this presentation with us, a decline in assets and just the whole perception of this real growth, particularly for emerging markets. And it seems to hop on and hop off what they call risk on, risked off.

But throughout this process, we continue to make sure that we are positioned as a go-to stock for exposure in emerging markets resources. This is where the world's population continues to grow at a very healthy, robust rate. And many of the presentations around the world have commented on the significance of Facebook, and other countries that have in China their own form of a Facebook, in Russia, and people are connected and they all want that American dream. So that's just basically long-term bodes well for both resources and emerging markets, which are growing to represent a greater portion of global GDP.

U.S. Global is debt free. It has a strong balance sheet, as we show on our visuals -- with a reflective cost structure which we will try to highlight, and Lisa Callicotte, our CFO, will walk through in some more details. And we still maintain, even through these challenges of this, we believe we are going through this valley, monthly dividends and a return equity discipline. We had very loyal top institutional holders and we thank them all for going through this process with us.

And then on page number 7, we have six years. The current monthly dividend is a half a penny per share and current yield is 1.65%, which is greater than a five-year government bond.

On visual number 8, as you can see, that the Board has approved the repurchase of up to 2.75 million of its outstanding common stock in the open market through calendar year 2014. And during the third fiscal quarter of 2014, the Company repurchased 35,065 Class A shares using cash of $120,000. And during the fiscal year to date the Company has repurchased 476,511 shares using approximately $230,000.

We have an algorithm that is used to buy back shares on down days in accordance with all applicable rules and regulations that restrict announcing times of repurchases. And we may suspend or discontinue at any time this program, but right now it remains intact.

What's important is the next visual. It's a transition year. Streamline operations and product lineup, shifted out of costly money market funds, provide shareholders ultra short government bond fund alternative and make money on the process of switching over from losing money. And then next is closed, merged and reorganized small funds for a far more focused product lineup, and successfully transitioned client accounts to new transfer agency while retaining service relationships with our key VIP client accounts.

And streamline the Company with staff less than 50 people. Basically fewer distractions that allow the Company to focus on basically its core competencies and reposition for a new product lineup.

On the next visual on 10, it's why did we shift out of money market business? And I wanted to share with you in this simple visual. It's just look at the US Fed Funds rate. Even though rates in the five-year and the 10-year mortgage has rebounded in the past 12 months, not so for Fed Funds rate, not so for money funds.

And fee waivers for the industry last year rose to a record $5.8 billion. And this is a key factor that we believe that the whole world is going to have to be dealing with these extremely low rates. If you take a look, Japan has been doing it now in the country for 24 years. And that's a real key concern of using monetary policy, which we believe at U.S. Global that government policies are a precursor to change.

It appears that in America, if interest rates were to rebound to 6%, that the servicing of that debt alone would cripple the economy. And thus when you take a look at the Japan models as a case study, that Europe and America is stuck in this sort of low interest rate environment to try to stimulate jobs. And being in money funds is just not going to remain an attractive investment alternative for investors and for a company trying to provide them.

So, we've hopped over into the next visual, and you can see that US government securities ultra-short bond fund seeks a higher yield than money funds, yet not as volatile as long-term bonds. What makes it all so quite interesting is that it has a $2.00 NAV, so the penny volatility over a monthly basis is minimal, which is a great place for investors to park their cash and earn a higher yield, but not be subject to as volatile a market if you have a higher-priced bond fund.

The new items of the funds -- that's visual 12 -- precious metals, natural resources, China, emerging Europe, domestic equity, and bond funds. Building for the future growth, increased ownership of Canadian asset management company, developing innovative and dynamic ETF products to expand the product lineup, monetizing our brand in over 170 countries through publishing of our financial commentary and other content.

The next visual is showing that the growth in ETF products -- it continues. There will be -- there are several factors for that, but what we'll try to highlight that later.

And then the strategic partnership in the next visual is Galileo. We had plans to purchase an additional 15% of the company, and after purchase, U.S. Global owns 65% of the outstanding shares of Galileo, a Toronto-based company with approximately CAD260 million under assets, accretive to GROW, five-star fund manager. In 2013 that book won an award for best small mid-cap over five years.

And the next visual is showing you that the quarterly average assets under management, as you can see, there has been a decline. And I mentioned to you at the beginning of this presentation is that it peaked in March [on 11], and what you do see when you look back is a real global growth. GDP growth peaked at this period and these asset classes as a whole have become removed with the growth of global GDP.

The asset breakdown remains pretty well the same. We are fortunate -- we do have a very strong direct relationship of shareholders with us rather than going through the other platforms like TD Waterhouse or Fidelity, National Securities, or the biggest is Schwab. It's having this intimate direct relationship with the investors which we believe is key for us.

The next visual I will show you is our balance sheet. It remains strong and robust in light of the decline in the markets that we are known for and have our expertise. And there is -- I guess most significant shift we highlighted last quarter is taking our money funds and rolling them over into the ultra short government bond fund. We do get a higher yield and it's very liquid investments. And Lisa can comment and answer on any question regarding the impact of this.

And then we have -- you can see, earnings per quarter -- it did decline at year-end December as we had struggled with the process of delays and disappointments. Streamlining our products -- it's just a mountain of regulatory meetings and issues, etc. that at times appear so excessive. But it is what it is and it's just as costly.

So with that, we believe that we're turning the corner in this transition, as you try to characterize it in our press release, this transition to the new U.S. Global, the GROW.

When we take a look at the next visuals, the comparisons -- you can see growth it's been down. The value -- the average share -- return equity has been 3.3%. Our peers, which predominantly have domestic equity funds, have been substantially higher and our yields approximately -- dividend yields are approximately the same.

But what we have to look forward for is these higher returns on equity, something we've enjoyed for over 10 years as being the strong leader in highest return on equity amongst our peers. And as we define our product line, our cost structure, this is what we have been doing. This is the long-term visual showing you what the returns of U.S. Global have been.

And then we could take a look at short-term. It's still so responsive to gold. We have a bounce in gold. Our Company, as a whole, bounces much more rapidly. The gold assets are down, as I try to show in this visual, over 12 months. And you can see that we have outperformed the overall buying of gold stock. And then short-term there was a big surge in gold stocks until March 21, and we ourselves as a Company, rebounded dramatically.

And then gold stocks that rolled over, and then same thing. We sort of corrected with it. But we have a higher leverage to rising gold prices than your average gold stock.

The next visual is showing you that GROW is above the 200-day moving average, which a lot of investors look at long-term as a proxy.

Now I want to turn it over to hard-working Lisa Callicotte, our CFO, to give an overview of the income statement financial analysis.

Thank you, Frank. Good morning. I'd like to summarize our results of operations for the quarter ended March 31, 2014. Beginning on page 26, we recorded operating revenues of $2.7 million for the quarter. This was a decrease from the $4.5 million we reported last year as a result of the lower assets under management during the quarter.

But as you can see on page 27, operating expenses also decreased approximately $1 million or 26% to $3.2 million for the quarter. This decrease is due to decreases in several expenses, including the following. Employee compensation and benefits decreased $487,000 or 24%, as a result of fewer employees and lower performance-based bonuses.

General and administrative expenses decreased $332,000 or 25%, mostly due to the strategic cost-cutting incentives including those related to our streamlining of products and services. Platform fees also decreased $238,000 or 36% as result of lower assets held through broker dealer platforms.

Page 28 shows other income for the three months ended March 31, 2014 of approximately $400,000. This is mainly due to sales of securities, but also includes dividends and interest received from securities held and earnings from our equity method investment in Galileo. As Frank discussed earlier, this is a strategic investment we have with the Canadian-based equity advisor. We currently own 50% and we are in the process of purchasing an additional 15%.

We had a slight net loss for the quarter of approximately $28,000 or zero cents per share. This is compared to a net income of $41,000 or zero cents per share the same quarter of last year.

Moving on to the balance sheet on page 30, you can see we had $36 million in total assets. We did have a change of our cash and cash equivalents compared to June 30, but this was due to a reclassification of cash and cash equivalents to trading securities, as a money market we were invested in converted to an ultra short bond fund. Therefore the amount we had invested in the fun in December 2013, approximately $14 million, was transferred from cash and cash equivalents to trading securities. So cash and marketable securities combined to make up 80% of our total assets.

And as you can see on page 31, we still have long no long-term debt. The company has a net working capital of $24.3 million and a current ratio of 16.4 to 1. With that I will turn it back over to Susan.

Thank you, Lisa, and thank you to everyone who is listening in this morning. You just heard a few of the noteworthy events going on at U.S. Global Investors. In the marketing and sales area, we continue to build the U.S. Global brand through our interactions with investors. Our institutional sales team engages daily with financial advisors who are current and prospective asset holders.

As many of our long-term stockholders are aware several of our funds have been recognized for their leadership and investment performance. Since 2000, the funds have received 21 Lipper performance awards, certificates, and top rankings. The Global Resources Fund continues to be highly ranked by Lipper. As of March 31, 2014 the fund is in the top 12% out of the entire universe of mutual funds for the 10 year period.

We are pleased that three of our funds hold the top Lipper Leader rating. This rating is based on investor-centered criteria and on a scale from 1 to 5. Lipper Leader funds that rate a 5 are in the top 20% of their category.

The All-American Equity Fund rates a 5 for preservation. The near-term Tax Free Fund rates a 5 for preservation and tax efficiency. And the US government security ultra short bond fund rates a 5 for preservation and expense. Investors these days seek preservation and tax efficiency, and we are pleased to offer funds that are highly ranked in these categories.

Three funds also continue to be highly ranked by Morningstar. As of the end of March 2014 the All-American Equity Funds and the Gold & Precious Metals Fund's have overall ratings of three stars among their respective peers. The Near-Term Tax Free Fund had an overall rating of four stars in its respective category. We are pleased the Near-Term Tax Free Fund has generated consistent positive annual total returns for investors for 13 years in a row.

We are also pleased that the Holmes Macro Trends Fund outperformed its benchmark, the S&P 1500 index, by 659 basis points during a stellar stock market year last year, and has continued to beat its benchmark in the first calendar quarter. The goal of the fund is to focus on domestic companies offering growth at a reasonable price, combined with stocks in quickly growing industries and sectors experiencing positive momentum.

Along with investment leadership, we also continue to be leaders in the financial industry based on our award-winning marketing and communication efforts. The Mutual Fund Education Alliance has recognized the marketing and investment teams with 54 awards for marketing and communication excellence since 2007.

Two of the repeat award winners are the Investor Alert and the Advisor Alert, both named best electronic shareholder and advisor newsletters for five years. These publications engage thousands of investors on a weekly basis with our original and insightful content.

We believe a key to building assets is through engaging educational content that helps investors learn about investing in global markets. Special reports are another format in which we share our expertise and build our brands. Our latest research is always available for download at USfunds.com.

At the website investors will also find a wealth of material including slideshows, quizzes, media interviews, and podcasts. Our communication efforts receive an invaluable amount of earned media, which is publicity gains through sharing of content by third-party sources rather than paid advertising. This helps us leverage our brand by reaching millions of readers, viewers and potential investors.

In addition to interact with loyal and digitally engaged followers through email, Twitter, LinkedIn and Facebook. As you can see, Frank continues to be sought out for his opinions on the gold and natural resource market from the financial news media.

Kitco News, with an audience of 10 million monthly visitors, launched a new weekly show, Gold Game Film, featuring Frank's gold market analysis. Other interviews during the first quarter included appearing on CNBC, Bloomberg radio, Stansberry Radio, GoldSeek, Palisades Radio, and Resource Investing News. Other members of our investment team are also sought for their opinions from media, including Business News Network, Think Advisor, Financial Focus, and Voice America: Emerging and Frontier Markets Investing.

Now I'd like to turn it back over to Frank, who will discuss what we have been watching in markets this year. Frank?

Thank you, Susan. And thank you, Lisa. Recent insights from the investor alert: I think what's important here is that Golden Cross is bullish for the Junior Miners, and this has always been a core value-added where we create alpha by being in the first to vanish in the creation of the Junior companies.

But those capital markets have changed. And we recognize that that formation of capital has changed, but the most important for us is starting to see this energy of emotions and sentiment starting to show back up in the gold, as the Golden Cross reflects the 50-day above the 200-day. And we are starting to see in the mid-cap space lots of takeover activity. The landscape has enjoyed this M&A drama.

When we take a look at the next visual, and we love using data and probability and statistical analysis to try to help us manage these emotions of capital markets, when we look back over the past 30 years -- only three clients in three decades has gold stock declining for three consecutive years. So, last year was one of those periods and the odds favor for a rebound this year.

In New York at the Gold Investment Conference, which used to have thousands of people and now it's just a small handful of cherry pickers, loyal investors and some institutional accounts that are looking for undervalued situations, so the concept -- the thought of being contrary where no one shows up and the industry as a whole is shrinking, I can share with you that is taking place from what I'm just seeing in New York, which I have not been to for a couple of years.

Now with that, the next visual is the idea of being a contrary investor, which we rolled back in Investor Alert in February, is that gold stocks appear to be poised for a bounce. And we did start getting that bounce until approximately until approximately March 21. But what's interesting is that still the Golden Cross seems to be remaining intact.

As you can see in the next visual is that gold sees the Golden Cross, which is sort of an important factor. Now I get asked so often what drove gold up and down? Gold last year, it was $1600; it fell to $1100 then a rebound to $1300. And in North America the biggest understanding of gold as an asset class is the Fear Trade, whereas 60% of the demand for gold is the Love Trade, which is predominantly Asia to the Middle East. It is the Fear Trade that captures the imagination of most North Americans.

What drives that Fear Trade predominantly is real interest rates. What will the government pay you for simplicity on a five-year government bond? You've got whatever CPI it is that month and you get a positive or negative rate of return.

So when we go to March of last year, if you were buying a government bond you were losing money. You were losing approximately 50 basis points on that money, and then by December TPI had fallen and the five-year government bond yield had risen. It had gone up -- doubled. And what did that do? It basically gave you a decline in gold prices because interest rates went from negative to positive.

So there's a very compelling inverse relationship to real interest rates. And then in January and February and going into March of this year, we had a reversal where interest rates went from being positive to back again being negative. And this drove the gold prices up. So that's what we're seeing as this wrestling between positive 10 basis points, negative 10 basis points and gold is up and down and up and down during this transition as we get into the summer. And I think we're going to get the seasonal pattern up through the holidays, from in particular Asia that drives the Love Trade and uses higher gold prices.

Another factor we commented on the next visual on our Investor Alert in February was this is the first time we saw a real spike in mining supply, which means there's been a lot of lending taking place. The money supply has all of a sudden started to run at an 8% clip. That has historically been a bullish monetary factor for gold prices.

So, having negative real interest rates again and having money supply start to build up, which is usually a precursor to inflation, gold is starting to make a rebound from its lows. There appears to be a nature of divergence in the next visual of gold and the amount of printing that was taking place. Let me try to comment on that for investors to try to educate and walk them through.

But at all times with investors, when we strongly recommend that they have a 10% weighting and they rebalance each year, and in fact we've taken that 10% and suggested 5% in gold stocks and 5% into bullion, gold coins or beautiful gold jewelry and maintaining that asset.

But during that whole process of always recommending this 10% and rebalancing, I wanted to point out to investors that there appears to be a great shift in gold ownership. I call it the great tectonic shift of physical gold, which you can see on the next visual of gold -- big bricks -- mainly in the US going to Switzerland where it's refined into smaller bricks and sold into China.

Last year was a record amount of consumption. In fact China consumed the total gold supply from all mines in the world last year, this year in the first couple of months. Also it's a record consumption of gold. There was concern at this conference that it maybe short-term here, that people are waiting on this consumption. But nevertheless it appears that you are getting new faults being built in Singapore. Shanghai has just announced creating a tax-free area for gold trading to make it easier for gold to come into Shanghai.

And I think these are all significant factors, because we've seen whenever a city or country has some form of a tax basis for trade over -- like in San Antonio for Toyota truck plant, through a tax concession you attract construction, infrastructure spending. Or what Ireland did, is you create a financial hub because you create tax benefits. And this is what Shanghai is doing. So I think that that's very positive.

Next visual showing you what I just commented -- China's demand for gold remains robust, that they've consumed more than the total amount of gold in the marketplace that was produced last year.

The next visual is showing gold jewelry, bar and coin demand remain resilient in 2013. Most of the gold decline to place over the GLB, which took place because of many funds -- hedge funds and liquidated.

But there's always opportunities in this resource space. And especially when it comes to precious metals and PGMs -- platinum group metals are often thrown in and characterized as being a precious metal, and you can see that palladium is breaking out.

It's interesting -- at this conference I'm attending in New York, people didn't think that palladium was doing well. And when I look at this visual and point out it's doing so well, when you take a look at gold for the past several years, and why is platinum and palladium breaking out relative to where gold is, it's because of two factors.

One is supply -- supply restrictions and concerns from Russia and from South Africa; disruptive, where the world continues to grow and use platinum and palladium for cars, for catalytic converters for clean air. And China has come up with new policies to basically emulate the American policies for clean air and clean water to battle back their pollution. And this just means more significant consumption of platinum and palladium.

Putin, in the next visual, is making palladium supply politically unstable. And so therefore what's negative about Putin, there is a positive on the other side-- to think this way as an active manager. Something where in emerging Europe we find -- prior to going and invading into the Crimea and to the Ukraine, we had sold anything we had local in Russia and then we sell the Russian stocks, taking it on the chin and decline -- especially the domestic ones. But platinum and palladium on the other hand, which we own in our funds, have had a nice counterbalance rising scenario.

The next visual sort of supports that Russia is the world's largest palladium supplier, one compared to other countries to put this thought process in context. But what happened? We had a rebound coming in gold and then all of a sudden everyone loses their confidence.

And the next visual is trying to help investors appreciate this, because we have written about the significance of the JPMorgan's global PMI, which is the Purchasing Manufacturers Index, and why is this important? This is an arbitrage for global macro investors.

When you look at the Purchasing Manufacturers Index, the PMI, it's a forecast. It's what could be anticipated in the next six to nine months. In industrial production, it is what has taken place -- one is the past, one is the future. Then there's just arbitrage of something happening in between.

And when the Global PMIs turned positive in midyear 2013, we started to see many energy names picked up and the base metals. And we published a piece of showing, what is the probability that when the PMI -- the one month to the three months, what does happen to various resource asset classes? And we can go back and visit that later.

But what derailed is most important to investors recently is Japan. Japan's PMI has pulled down the global economy with a consumption tax. How long will this last? We don't think it will last very long. It will be several months at the most. But it's enough to turn around and make investors go, risk off.

And we saw this with that -- a huge rotation, even in the US sectors, sectors that were leading in their overall performance, all of a sudden industrials went from the top to the bottom. Materials rotated around this uncertainty. And that provides a great investment opportunity for strategic long-term investors.

On the other hand, the next one shows you the price plus for commodities. The FTSE All-World Index is approaching new highs and global industrial production -- what I mentioned is behind us -- has turned up. And this is a classic visual which I mentioned earlier, regarding global real growth.

As you see, it peaked in 2011 and has been declining all the way to basically this year and we are starting to see this increase. This is very important for the sort of health of the emerging economies and resources.

The next one is just showing you the African population forecast to grow four times the size in the next hundred years. Demographics is very important. And also even the crash of 2008 -- Africa was not impacted, because most of Africa is a cash business. There is no leverage. You can't buy a house with a mortgage. You can't buy a car -- everyone has cash if they have a car. It's very much a cash economy and many of these economies grew at 6% and 7% -- even in 2008.

So with the strong growth in population demographics, it's very important to compare this to what we see in countries like Japan. Japan, where populations are shrinking; Italy, where populations are shrinking -- where government policies are trying to deal with this.

The next visual is showing you technologies of the best performing sector in Asia and this rotation of consumer disruption in healthcare. And was interesting is that last year we had very similar strong performing sectors in the US, with consumer discretion up until January, was doing exceptionally well. And the same with healthcare.

So what we find in our global footprint is that when we have a strong sector that is taking place in America, quite often it shows up in emerging Europe; it shows up in Asia. The idea of the synchronized global activity in relationships (technical difficulty) is very important in our thesis of looking at investments.

The next visual is showing that information technology and industrials benefited most with the capital expenditure growth last year and those sectors did well. So it's important in the global thesis of understanding these intermarket relationships. And that's what we do with our Investor Alert. And that's why we have a strong following around the world.

The next visual is this income tax share of the top 1% has been rising. And you hear this is always perceived and spun by many of the media and socialist economists that the rich are getting richer and the media love a good tax. But in fact, the math is really compelling.

When you have [55] people that what's up, all of a sudden get purchased for [$19 billion], where you have less than five people being bought out by its to Instagram for $1 billion, and now we have our first rapper on Friday being bought out for over $3 billion for his headsets, very few people are participating in these billion-dollar takeouts.

But the skew is the top 1%, that all of a sudden in the past five years, it looks like their growth and their economics is improving dramatically. But really it's like the top one basis point held up as driven by technology, not because of selling overpriced products and services to the rest of the masses.

So it's important and it's somebody trying to do their investment work to educate people on the facts and the trends, and we get a strong response from this. A great shift in the fair tax -- we try to -- once I mentioned this earlier -- to start to help people to understand then and now the top percent theme more than the bottom 90% in taxes.

And a lot of [tax] -- they are takeovers. Intellectual -- using innovation to compete in the workplace to make the world a better place, from products, from healthcare or whatever -- are going to contribute to the global economic activity. And America is a leader. It's a leader, but not because of its legal system, common-law versus the civil law.

Again, it's a lot to do with the idea of the spirit of competition that starts at a very young age and it goes into adults; whether it's a spelling bee competition. I met a young man that's going into Trivial Pursuit, works at a station for national competition and he had to go through basically three types of tests -- a GMAT and LSAT level knowledge gathering to go compete on a national scale.

This is America. It's about competing and about the use of innovation to compete.

So the next visual I'm showing you -- the sectors that lagged in January will outperform the rest of 2014 and we like to go and show this type of interesting analysis -- price reversals in sectors -- and make sure that we've got good stocks.

The next visual I would just show you is reasons for active management, the angle of rotation of leadership. As you can see here by countries -- China -- usually one that gets in the top half; it can stay up for several years and the bottom half stays down. But we are looking at another active China fund manager who has spectacular performance in the past five years -- over 20% compounded, outperformed 90% of US active domestic fund managers in the US. But his fund is still down -- over 90% assets just because of negative psychology towards China.

And then we think this is flawed because we tell people, and share with them, all of the money. All the money. All of the attacks on Obamacare -- rightly so, for many different reasons -- people are in going to miss of one of the most spectacular runs of the past three years of healthcare. We like to show that from the growth of the health care sector. Now we are seeing substantial M&A work.

The next visual is showing you reasons for active management is gold. Gold rotates to the top, then it sinks to the bottom -- it's understanding those drivers. And we also like to advocate the 10% discipline. Having 10% in gold and rebalancing each year -- it does have its benefits. It does lower the volatility of the overall fund performance. And in the years when gold is just rocketing, it does help overall.

Here we have had a three-year decline in gold equities, a three-year decline, and last year down two standard deviations. And still that discipline has not hurt the overall diversified thesis as a money manager. So this, we will continue to advocate having to gold equities. And arguably, reading U.S. Global Investor Alert, if you are not, please sign up. Connect with us.

And now I'd like to turn it over to Susan.

Thank you, Frank. We don't have any questions at this time, so thank you for participating this morning. This concludes the U.S. Global Investors earnings webcast for the third quarter 2014. This presentation will be available for replay on our website at USfunds.com. Thank you, everyone.

Ladies and gentlemen on the line, thank you for participating in today's conference. This does conclude today's program. You may all disconnect. Had a great day, everyone.