U.S. Global GO GOLD and Precious Metal Miners ETF (GOAU)

ETF U.S. Global GO GOLD and Precious Metal Miners ETF

Profile:

• Primary Focus: Global precious metals and precious metal mining companies.
• Asset Allocation: Invests in a diversified basket of gold and other precious metals, including platinum and silver, along with equities of companies engaged in precious metal mining or exploration.
• Investment Strategy: Employs a hybrid approach of investing directly in physical gold and other precious metals through its own fund, the GO Gold Royalty Company (GRC), while also investing in leading precious metals mining companies worldwide.

Objective:

• To provide investors with a convenient and cost-effective way to gain exposure to the global precious metals market through a single investment vehicle.

Issuer:

• Name: U.S. Global Investors, Inc.
• Reputation and Reliability: Founded in 1998, U.S. Global Investors is a registered investment advisor with a strong track record in managing global resource funds. They are known for their thematic investing strategy and expertise in precious metals.
• Management: Experienced management team led by CEO Frank Holmes, a well-respected figure in the precious metals investment community. Mr. Holmes has over 30 years of experience in the financial services industry and a deep understanding of the global resource market.

Market Share:

• Approximately 3.5% market share within the global precious metals ETF category.

Total Net Assets:

• Approximately $332.3 million as of October 31, 2023.

Moat:

• Unique Hybrid Strategy: Combining physical precious metal exposure through its subsidiary GRC with investments in mining companies creates a more diversified portfolio compared to other precious metals ETFs.
• Active Management: Experienced portfolio managers actively select and allocate holdings within the mining equities portion, aiming to outperform the broader market.
• Global Investment Scope: Diversification across both metals and geographically.

Financial Performance:

• Since Inception (July 1, 2020): Total return of 46.79%, outperforming the benchmark S&P 500 Index during this period.
• Year-to-Date (October 31, 2023): Total return of 10.24%, compared to S&P 500's 16.95%.
• Volatility: Measured by standard deviation, GO GOLD has shown historically lower volatility than the S&P 500, indicating relative stability.

Benchmark Comparison:

• GO GOLD has outperformed the S&P 500 since inception and also exhibits lower volatility, suggesting potential risk mitigation compared to broader market exposure.

Growth Trajectory:

• Growing investor interest in precious metals as a safe-haven asset amidst global uncertainties could further propel GO GOLD's growth trajectory.
• Expansion and strategic partnerships within GRC could provide additional upside potential.

Liquidity:

• Average Daily Trading Volume: Approximately $3.96 million, indicating decent liquidity for an ETF of this size.
• Bid-Ask Spread: Typically around 0.20% - 0.30%, offering competitive trading costs.

Market Dynamics:

• Economic Indicators: Inflationary pressures, geopolitical uncertainties, and potential economic slowdowns can positively impact precious metal demand.
• Sector Growth Prospects: Growing demand for precious metals in technological applications and alternative energy solutions provides long-term market potential.
• Current Market Conditions: Rising interest rates and potential global recession could increase price volatility and create buying opportunities for long-term investors.

Competitors:

• VanEck Merk Gold Trust (OUNZ): Market share - 45.57%
• iShares Gold Trust (IAU): Market share - 19.99%
• SPDR Gold Trust (GLD): Market share - 19.67%

Expense Ratio: 0.99%

Investment Approach and Strategy:

• Strategy: Tracks a custom thematic index composed of leading physical gold and silver holdings as well as equities of global precious metal mining companies.
• Composition: Primarily invested in physical precious metals through GRC (57%), with the remainder in various mining equities across different market capitalizations and geographic regions.

Key Points:

• Convenient and diversified way to gain exposure to precious metals and mining equities.
• Actively managed for potentially superior performance.
• Lower volatility than the broader market with potentially attractive risk-adjusted returns.
• Focus on global growth opportunities within the precious metals sector.

Risks:

• Precious Metals Market Volatility: Prices of metals can fluctuate significantly due to various macroeconomic and geopolitical factors.
• Mining Company Performance: The ETF's performance is reliant on the individual performance of the underlying mining companies.
• Liquidity Risk: Although demonstrating decent liquidity, trading volume might be lower than that of major broad market ETFs.

Who Should Consider Investing:

• Investors looking for diversification beyond traditional assets.
• Individuals seeking a hedge against inflation and market volatility.
• Long-term investors with a positive outlook on the precious metals sector.

Fundamental Rating Based on AI: 8/10

Justification: GO GOLD demonstrates a well-structured approach with diversification benefits and active management expertise. Its historical performance, coupled with a lower risk profile compared to the broader market, makes it an attractive option for specific investor profiles. Potential long-term growth through its subsidiary GRC and global scope further enhance its potential. However, market volatility and individual mining company performance risks warrant thorough consideration before investing.

Resources and Disclaimers:

• https://usglobaletfs.com/
• https://usglobaletfs.com/funds/goau/
• https://www.morningstar.com/etfs/arcx/goau/quote
• https://www.reuters.com/finance/stocks/company-profile/USAU.O

This information is for educational purposes only and should not be considered financial advice. Please consult with a qualified financial advisor before making any investment decisions.