U.S. Global Investors (NASDAQ:GROW) saw a significant surge in net income for the quarter ended December 31, 2023, driven by increased investment gains and strategic moves to fortify its ETF offerings.
The company reported a net income of $1.2 million, or $0.09 per share, a 45% increase compared to the same period last year.
The surge in net income was primarily fueled by a substantial rise in net investment income, which reached $1.4 million for the quarter, compared to $116,000 in the corresponding period of the previous year.
Notably, the increase included net unrealized gains on equity securities amounting to $279,000, a significant turnaround from the net unrealized losses of $937,000 reported in the prior year's quarter.
US Global Investors has been strategically fortifying its offerings to maintain a competitive edge in the market, strengthening the economic moat around its two ETF offerings: the US Global Jets ETF and the US Global GO GOLD and Precious Metal Miners ETF.
Frank Holmes, CEO and Chief Investment Officer of US Global Investors, expressed optimism despite challenges in the market. He cited that although total assets under management (AUM) at quarter-end were $2.1 billion, down from $2.4 billion a year ago, this decline was predominantly attributed to net outflows from the US Global Jets ETF. Holmes attributed this trend to foreign investors reducing their exposure to ETFs amid fears of a global recession.
In December, GOAU began trading on Peru's Bolsa de Valores de Lima, marking its third international listing after New York City and Mexico City.
Additionally, JETS, which was listed in Lima in December 2020, is now available for purchase in Europe, London, and Mexico City, further expanding its global footprint.
“This move gives even more investors access to GOAU, a dynamic, rules-based ETF that has a distinctive quantitative and fundamental approach to stock-picking that we describe as quantamental,” Holmes said in a statement.
“Like JETS and our US Global Sea to Sky Cargo ETF, GOAU has a smart beta 2.0 construction, meaning it combines the ease of passive investing with the rigor of active investing. The stock selections and weightings in our three ETFs are based on more than simple market caps; a number of key financial factors are also taken into consideration. Each quarter, the ETFs are rebalanced and reconstituted.”
US Global Investors ended the quarter with net working capital standing at approximately $38.3 million, an increase of $840,000 from June 30, 2023, and almost $27.5 million in cash and cash equivalents.