U.S. Global Investors, Inc. (NASDAQ:GROW) posted earnings of $1.27 million, on operating revenue of $1.5 million for the three months closed September 30, 2017. This was a notable 383% jump over the preceding quarter the previous year, which recorded net income of $263,000, on operating revenues of $1.98 million.
U.S. Global Investors reported that the improvement in income was following an investment accounted for under the equity process in a fund seen by Galileo Global Equity Advisors. The firm and the Galileo fund closed strategic investments in HIVE Blockchain Technologies, the initial publicly-traded entity involved in the operations of mining new digital currencies, also termed as cryptocurrencies. Moreover, the firm witnessed inflows into the U.S. Global Jets ETF, Precious Metal Miners ETF and U.S. Global GO GOLD, which collectively held total assets of $125 million as of the close of September 30.
Frank Holmes, the Chief Investment Officer and CEO of U.S. Global Investors, expressed that gold equity markets have yet to fully recover from the remarkable rebalance trade the company witnessed in June concerning the VanEck Vectors Junior Gold Miners ETF. Because it had developed so large and was getting close to owning over 20% of numerous underlying equities, which would breach IRS diversification requirements and probably trigger takeover regulations in Canada, GDXJ had to dump over 50% of its shares in smaller gold companies, a value of $3 billion.
This led in valuation compression and increased volatility in the gold market, resulting in outflows from numerous gold-related mutual funds, the company included. What’s more, the gold price lost over 5% in the third quarter as the bullish equity market, continued to head higher.
Holmes added that due to some thrilling new advancements, U.S. Global Investors are well-positioned for the future. GOAU introduced at the close of June, has demonstrated extremely competitive performance and continues to draw assets.