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U.S. Global Investors, Inc.
GROW), a boutique registered investment advisory firm specializing in natural resources and emerging markets, recorded net income of $487,138, or 3 cents per share, on revenues of $5.54 million for the third quarter of the 2012 fiscal year. The company’s net income increased a modest 19 percent on a quarter-over-quarter basis.
During the third quarter of fiscal year 2011, net income was $2.69 million, or 17 cents per share, on revenues of $11.41 million, based on average assets under management of $3.10 billion.
Average assets under management were $1.97 billion for the quarter ended March 31, 2012, a decrease of 36 percent from the previous year. U.S. Global’s assets under management stood at $1.89 billion on March 31, 2012.
“Despite a spectacular first-quarter rally, the investment industry experienced apathy as investors continued to redeem equity mutual funds,” says Frank Holmes, U.S. Global Investors CEO.
Across the industry, equity mutual funds saw nearly $10 billion redeemed during the first three months of 2012. In 2011, more than $134 billion was redeemed from U.S. equity funds, according to the Investment Company Institute.
“While growing the company’s assets under management remains challenging in the short term, our reflexive cost structure allows for profitability at a lower asset level. Compared to the same quarter last year, advertising expenses were down 99 percent, employment compensation and benefits decreased nearly 24 percent, and general and administrative costs declined by about 20 percent. In addition, the company owns its headquarters building and carries no debt on its balance sheet,” says Holmes.
“As U.S. investors were exiting equities, the S&P 500 Index was experiencing its largest first-quarter gain since 1998,” says Holmes. “This rise follows government policy changes that allowed money center ‘TARP’ banks to declare or raise dividend payouts. In fact, at March 31, about 400 companies in the S&P 500 pay dividends now, the largest figure since January 2000.”