US GLOBAL INVESTORS FUNDS, 497, 1997-07-22

US GLOBAL INVESTORS FUNDS
497, 1997-07-22

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U.S. GLOBAL INVESTORS FUNDS

U.S. GOLD SHARES FUND, U.S. GLOBAL RESOURCES FUND,
U.S. WORLD GOLD FUND

P.O. BOX 781234
SAN ANTONIO, TEXAS 78278-1234
1-800-873-8637 (1-800-US-FUNDS)
(INFORMATION, SHAREHOLDER SERVICES AND REQUESTS)

INTERNET: HTTP://WWW.USFUNDS.COM

PROSPECTUS

NOVEMBER 1, 1996
AMENDED MARCH 27, 1997, AND JULY 23, 1997

This prospectus presents information that a prospective investor should know
about the U.S. Gold Shares Fund, the U.S. Global Resources Fund and the U.S.
World Gold Fund, three no-load mutual funds (the "Fund(s)") of U.S. Global
Investors Funds (the "Trust"). Each Fund has a different investment objective
and is designed to meet different investment needs. SOME OF THESE FUNDS INVOLVE
SPECIAL RISKS AND ARE HIGHLY SPECULATIVE. EACH OF THE FUNDS MAY INVEST UP TO 10%
OF THE VALUE OF THEIR RESPECTIVE NET ASSETS IN RESTRICTED SECURITIES. (SEE
SECTION ENTITLED "SPECIAL RISKS.") SHARES OF THE TRUST ARE NOT INSURED,
GUARANTEED, SPONSORED, RECOMMENDED OR APPROVED BY THE UNITED STATES OR ANY
AGENCY OR OFFICER THEREOF. Investors are responsible for determining whether or
not an investment in the fund is appropriate for their needs. Read and retain
this prospectus for future reference.

A Statement of Additional Information dated November 1, 1996, has been filed
with the Securities and Exchange Commission and is incorporated herein by
reference. This Statement is available free from U.S. Global Investors Funds
upon written request at the address set forth above or by calling 1-800-873-
8637.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DIS-
APPROVED BY THE SECURITIES AND EXCHANGE COM-
MISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COM-
MISSION OR ANY STATE SECURITIES COMMIS-
SION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS

PAGE
----
SUMMARY OF FEES AND EXPENSES......... 2
FINANCIAL HIGHLIGHTS................. 4
INVESTMENT OBJECTIVES AND
CONSIDERATIONS..................... 8
U.S. Gold Shares Fund.............. 8
U.S. Global Resources Fund......... 8
U.S. World Gold Fund............... 9
COMMON INVESTMENT POLICIES........... 9
SPECIAL RISKS........................ 11
HOW TO PURCHASE SHARES............... 15
HOW TO EXCHANGE SHARES............... 18
HOW TO REDEEM SHARES................. 20
HOW SHARES ARE VALUED................ 24
DIVIDENDS AND TAXES.................. 25
THE TRUST............................ 27
MANAGEMENT OF THE FUNDS.............. 28
PERFORMANCE INFORMATION.............. 30

SUMMARY OF FEES AND EXPENSES

The following summary, which is based on actual expenses and average net assets
for each Fund for the year ended June 30, 1996, is provided to assist you in
understanding the various costs and expenses a shareholder in each respective
Fund could bear directly and indirectly.

GOLD GLOBAL WORLD
SHARES RESOURCES GOLD
FUND FUND FUND
----- --------- -----
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load.............. None None None
Redemption Fee.................. None None None
Administrative Exchange Fee..... $5 $5 $5
Trader's Fee (on the
redemption or the exchange of
shares held less than 14
calendar days)............... 0.25% 0.25% 0.25%
Account Closing Fee (does not
apply to exchanges).......... $10 $10 $10
ANNUAL FUND OPERATING EXPENSES (AS A
PERCENTAGE OF AVERAGE NET
ASSETS)(1)
Management Fees................. 0.75% 1.00% 0.98%
12b-1 Fees...................... None None None
Other Expenses.................. 0.29% 0.73% 0.21%
Transfer Agency Fees............ 0.44% 0.71% 0.27%
Accounting Services Fees........ 0.05% 0.13% 0.05%
Total Fund Operating Expenses........ 1.53% 2.57% 1.51%

2
<PAGE>
A shareholder who requests delivery of redemption proceeds by wire transfer will
be subject to a $10 charge. International wires will be charged more.

HYPOTHETICAL EXAMPLE OF EFFECT OF FUND EXPENSES(1):

You would pay the following expenses on a $1,000 investment, assuming 5% annual
return:

GOLD GLOBAL WORLD
SHARES RESOURCES GOLD
FUND FUND FUND
--------- --------- ---------
1 year............................... $ 26 $ 36 $ 25
3 years.............................. 58 90 58
5 years.............................. 94 146 92
10 years............................. 193 300 190

Included in these estimates is the account closing fee of $10 for each period.
This is a flat charge that does not vary with the size of your investment.
Accordingly, for investments larger than $1,000 your total expenses will be
substantially lower in percentage terms than this illustration implies. The
examples should not be considered a representation of past or future expenses.
Actual expenses may be greater or less than those shown.
- --------------------------------------------------------------------------------

(1) Annual Fund Operating Expenses and the Hypothetical Example are based on
each Fund's historical expenses. Management fees, transfer agency fees, and
accounting services fees are paid to U.S. Global Investors, Inc. (the
"Advisor") and its wholly owned subsidiary. Please refer to the section
entitled "Management of the Funds" for further information.

3
<PAGE>
FINANCIAL HIGHLIGHTS
U.S. GOLD SHARES FUND

The following per share data and ratios for a share of beneficial interest
outstanding throughout each of the five years ended June 30, 1996 have been
audited by Price Waterhouse LLP, the Fund's Independent Accountants. The related
financial statements and the report of Independent Accountants are included in
the Fund's 1996 Annual Report to Shareholders and are incorporated by reference
into the Statement of Additional Information ("SAI"). In addition to the data
set forth below, further information about the performance of the Fund is
contained in the Annual Report to Shareholders and SAI which may be obtained
without charge.

Selected data for a capital share outstanding throughout each year is as
follows:
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
--------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989
--------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF
PERIOD............................. $ 2.14 2.48 2.49 2.21 3.57 3.82 3.77 3.74
--------- --------- --------- --------- --------- --------- --------- ---------
NET INVESTMENT INCOME(A)........... .05 .06 .07 .04 .07 .10 .16 .20
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS(B).......... (.30) (.33) (.02) .29 (1.35) (.25) .08 .04
--------- --------- --------- --------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS..... (.25) (.27) .05 .33 (1.28) (.15) .24 .24
--------- --------- --------- --------- --------- --------- --------- ---------
LESS DIVIDENDS AND DISTRIBUTIONS:
DIVIDENDS FROM NET INVESTMENT
INCOME............................ (.05) (.06) (.06) (.04) (.08) (.10) (.19) (.21)
DISTRIBUTIONS IN EXCESS OF NET
INVESTMENT INCOME(C).............. -- (.01) -- (.01) -- -- -- --
DISTRIBUTIONS FROM NET REALIZED
GAINS............................. -- -- -- -- -- -- -- --
--------- --------- --------- --------- --------- --------- --------- ---------
TOTAL DIVIDENDS AND DISTRIBUTIONS.... (.05) (.07) (.06) (.05) (.08) (.10) (.19) (.21)
--------- --------- --------- --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD....... $ 1.84 2.14 2.48 2.49 2.21 3.57 3.82 3.77
========= ========= ========= ========= ========= ========= ========= =========
TOTAL INVESTMENT RETURN(D)........... (11.73)% (11.21) 1.85 16.70 (36.45) (3.77) 5.51 7.03
RATIOS/SUPPLEMENTAL DATA:
NET ASSETS, END OF PERIOD (IN
THOUSANDS)......................... $ 153,839 211,171 263,827 299,808 187,937 343,148 295,108 239,111
RATIO OF EXPENSES TO AVERAGE NET
ASSETS............................. 1.54 (E) 1.42 1.46 1.88 1.54 1.54 1.46 1.54
RATIO OF NET INCOME TO AVERAGE NET
ASSETS............................. 1.81 (E) 2.47 2.61 2.58 2.52 2.71 3.80 5.46
PORTFOLIO TURNOVER RATE.............. 24.24% 32.75 29.40 19.93 24.69 48.94 13.13 7.49
AVERAGE COMMISSION RATE PAID(F)...... $ 0.0523 NA NA NA NA NA NA NA
</TABLE>

1988 1987
--------- ---------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF
PERIOD............................. 6.32 3.32
--------- ---------
NET INVESTMENT INCOME(A)........... .30 .33
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS(B).......... (2.48) 3.02
--------- ---------
TOTAL FROM INVESTMENT OPERATIONS..... (2.18) 3.35
--------- ---------
LESS DIVIDENDS AND DISTRIBUTIONS:
DIVIDENDS FROM NET INVESTMENT
INCOME............................ (.40) (.35)
DISTRIBUTIONS IN EXCESS OF NET
INVESTMENT INCOME(C).............. -- --
DISTRIBUTIONS FROM NET REALIZED
GAINS............................. -- --
--------- ---------
TOTAL DIVIDENDS AND DISTRIBUTIONS.... (.40) (.35)
--------- ---------
NET ASSET VALUE, END OF PERIOD....... 3.74 6.32
========= =========
TOTAL INVESTMENT RETURN(D)........... (36.44) 105.96
RATIOS/SUPPLEMENTAL DATA:
NET ASSETS, END OF PERIOD (IN
THOUSANDS)......................... 238,051 407,603
RATIO OF EXPENSES TO AVERAGE NET
ASSETS............................. 1.31 1.32
RATIO OF NET INCOME TO AVERAGE NET
ASSETS............................. 5.10 6.45
PORTFOLIO TURNOVER RATE.............. 18.05 23.75
AVERAGE COMMISSION RATE PAID(F)...... NA NA

(CONTINUED)

4
<PAGE>
FINANCIAL HIGHLIGHTS
U.S. GLOBAL RESOURCES FUND

PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF
PERIOD............................. $ 5.76 $ 5.74 $ 6.10 5.78 5.76 6.31 7.07 7.67
--------- --------- --------- --------- --------- --------- --------- ---------
NET INVESTMENT INCOME(A)........... (.01) (.03) (.02) .01 .00 .03 .12 .13
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS(B).......... 1.31 .36 (.18) .35 .25 (.12) .02 (.33)
--------- --------- --------- --------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS..... 1.30 .33 (.20) .36 .25 (.09) .14 (.20)
========= ========= ========= ========= ========= ========= ========= =========
LESS DIVIDENDS AND DISTRIBUTIONS:
DIVIDENDS FROM NET INVESTMENT
INCOME............................ -- -- -- (.01) (.07) (.04) (.50) --
DISTRIBUTIONS IN EXCESS OF NET
INVESTMENT INCOME(C).............. (.01) -- (.01) (.03) -- -- -- --
DISTRIBUTIONS FROM NET REALIZED
GAINS............................. (.07) -- (.15) -- (.16) (.42) (.40) (.40)
DISTRIBUTIONS IN EXCESS OF NET
REALIZED GAIN(C).................. -- (.31) -- -- -- -- -- --
--------- --------- --------- --------- --------- --------- --------- ---------
TOTAL DIVIDENDS AND DISTRIBUTIONS.... (.08) (.31) (.16) (.04) (.23) (.46) (.90) (.40)
========= ========= ========= ========= ========= ========= ========= =========
NET ASSET VALUE, END OF PERIOD....... $ 6.98 5.76 5.74 6.10 5.78 5.76 6.31 7.07
--------- --------- --------- --------- --------- --------- --------- ---------
TOTAL INVESTMENT RETURN(D)........... 22.80% 5.94 (3.73) 6.46 4.31 (1.26) (.47) (2.36)
RATIOS/SUPPLEMENTAL DATA:
NET ASSETS, END OF PERIOD (IN
THOUSANDS)......................... $ 24,534 21,452 21,620 23,939 25,384 28,157 31,694 31,694
RATIO OF EXPENSES TO AVERAGE NET
ASSETS............................. 2.57 (E) 2.49 2.43 2.46 2.33 2.43 2.10 2.04
RATIO OF NET INCOME TO AVERAGE NET
ASSETS............................. (0.13 (E) (0.60) (.34) .17 .61 .58 1.37 1.78
PORTFOLIO TURNOVER RATE.............. 116.77% 50.24 57.74 119.69 55.07 81.80 70.22 21.31
AVERAGE COMMISSION RATE PAID(F)...... $ 0.0306 NA NA NA NA NA NA NA
</TABLE>

1988 1987
--------- ---------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF
PERIOD............................. 11.00 5.29
--------- ---------
NET INVESTMENT INCOME(A)........... .14 (.19)
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS(B).......... (2.77) 5.90
--------- ---------
TOTAL FROM INVESTMENT OPERATIONS..... (2.63) 5.71
========= =========
LESS DIVIDENDS AND DISTRIBUTIONS:
DIVIDENDS FROM NET INVESTMENT
INCOME............................ -- --
DISTRIBUTIONS IN EXCESS OF NET
INVESTMENT INCOME(C).............. -- --
DISTRIBUTIONS FROM NET REALIZED
GAINS............................. (.70) --
DISTRIBUTIONS IN EXCESS OF NET
REALIZED GAIN(C).................. -- --
--------- ---------
TOTAL DIVIDENDS AND DISTRIBUTIONS.... (.70) --
========= =========
NET ASSET VALUE, END OF PERIOD....... 7.67 11.00
--------- ---------
TOTAL INVESTMENT RETURN(D)........... (24.01) 107.55
RATIOS/SUPPLEMENTAL DATA:
NET ASSETS, END OF PERIOD (IN
THOUSANDS)......................... 37,064 44,930
RATIO OF EXPENSES TO AVERAGE NET
ASSETS............................. (.49) 2.90
RATIO OF NET INCOME TO AVERAGE NET
ASSETS............................. 1.78 (1.64)
PORTFOLIO TURNOVER RATE.............. 26.78 7.98
AVERAGE COMMISSION RATE PAID(F)...... NA NA

(CONTINUED)

5
<PAGE>
FINANCIAL HIGHLIGHTS
U.S. WORLD GOLD FUND

Selected data for a capital share outstanding throughout each year is as
follows:
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
--------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989
--------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF
PERIOD............................. $ 15.81 15.63 14.59 9.51 10.04 10.77 11.57 14.0
--------- --------- --------- --------- --------- --------- --------- ---------
NET INVESTMENT INCOME(A)........... (.08) (.12) (.09) (.12) (.13) (.10) (.04) .02
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS(B).......... 5.39 .33 1.13 5.20 (.40) (.63) (.66) (2.48)
--------- --------- --------- --------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS..... 5.31 .21 1.04 5.08 (.53) (.73) (.70) (2.46)
--------- --------- --------- --------- --------- --------- --------- ---------
LESS DIVIDENDS AND DISTRIBUTIONS:
DIVIDENDS FROM NET INVESTMENT
INCOME............................ -- -- -- -- -- -- (.10) --
DISTRIBUTIONS IN EXCESS OF NET
INVESTMENT INCOME(C).............. -- (.03) -- -- -- -- -- --
DISTRIBUTIONS FROM NET REALIZED
GAINS............................. -- -- -- -- -- -- -- (2.30)
--------- --------- --------- --------- --------- --------- --------- ---------
TOTAL DIVIDENDS AND DISTRIBUTIONS.... -- (.03) -- -- -- -- (.10) --
--------- --------- --------- --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD....... $ 21.12 15.81 15.63 14.59 9.51 10.04 10.77 11.57
========= ========= ========= ========= ========= ========= ========= =========
TOTAL INVESTMENT RETURN(D)........... 33.59% 1.36 7.13 53.58 (5.37) (7.03) (7.02) (16.42)
RATIOS/SUPPLEMENTAL DATA:
NET ASSETS, END OF PERIOD (IN
THOUSANDS)......................... $ 248,781 181,473 202,819 109,805 57,942 65,423 72,626 85,119
RATIO OF EXPENSES TO AVERAGE NET
ASSETS............................. 1.51 (E) 1.55 1.53 2.00 2.20 2.22 1.95 2.00
RATIO OF NET INCOME TO AVERAGE NET
ASSETS............................. (.40 (E) (.66) 0.66 (1.15) (1.18) (.95) (.24) .13
PORTFOLIO TURNOVER RATE.............. 25.97% 28.02 19.65 26.05 47.28 44.46 25.52 0.02
AVERAGE COMMISSION RATE PAID(F)...... $ 0.0202 NA NA NA NA NA NA NA
</TABLE>

1988 1987
--------- ---------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF
PERIOD............................. 20.47 9.61
--------- ---------
NET INVESTMENT INCOME(A)........... .00 .00
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS(B).......... (4.14) 11.06
--------- ---------
TOTAL FROM INVESTMENT OPERATIONS..... (4.14) 11.06
--------- ---------
LESS DIVIDENDS AND DISTRIBUTIONS:
DIVIDENDS FROM NET INVESTMENT
INCOME............................ -- --
DISTRIBUTIONS IN EXCESS OF NET
INVESTMENT INCOME(C).............. -- --
DISTRIBUTIONS FROM NET REALIZED
GAINS............................. (.20) --
--------- ---------
TOTAL DIVIDENDS AND DISTRIBUTIONS.... (2.30) (.20)
--------- ---------
NET ASSET VALUE, END OF PERIOD....... 14.03 20.47
========= =========
TOTAL INVESTMENT RETURN(D)........... (21.29) 116.80
RATIOS/SUPPLEMENTAL DATA:
NET ASSETS, END OF PERIOD (IN
THOUSANDS)......................... 104,273 126,839
RATIO OF EXPENSES TO AVERAGE NET
ASSETS............................. 1.47 1.47
RATIO OF NET INCOME TO AVERAGE NET
ASSETS............................. .04 (.05)
PORTFOLIO TURNOVER RATE.............. 39.20 43.66
AVERAGE COMMISSION RATE PAID(F)...... NA NA

(FOOTNOTES ON FOLLOWING PAGE)

6
<PAGE>
(CONTINUED FROM PREVIOUS PAGE)
(a) Net of expense reimbursements; (b) Includes the effect of capital share
transactions throughout the year; (c) Distributions in excess of net investment
income and net realized gains and tax returns of capital are presented in
accordance with SOP 93-2, Determination, Disclosure, and Financial Statement
Presentation of Income, Capital Gain, and Return of Capital Distribution by
Investment Companies, which was first implemented by the Funds in fiscal 1993.
Information for prior years has not been restated; (d) Total return does not
reflect the effect of account fees; (e) Expense ratio is net of expense
reimbursements or fee waivers by the Advisor. Had such reimbursements not been
made, the expense ratio subject to the most restrictive state limitation would
have been 1.58%, 2.58% and 1.53%, and the net investment income ratio would have
been 1.76%, (0.14)% and (0.42)% for the Gold Shares, Global Resources and World
Gold Funds, respectively; (f) Represents total commissions paid on portfolio
securities divided by the total number of shares purchased or sold on which
commissions were charged. This information was not required prior to 1996.

7
<PAGE>
U.S. GLOBAL INVESTMENT OBJECTIVES AND CONSIDERATIONS

U.S. Global Investors Funds (the "Trust") offers investors three natural
resources funds: the U.S. Gold Shares Fund ("Gold Shares Fund"), U.S. Global
Resources Fund ("Global Resources Fund") and U.S. World Gold Fund ("World
Gold Fund"). Each Fund has a principal objective of long-term growth of capital
as well as protection against inflation and monetary instability. The Gold
Shares Fund has a secondary objective of current income. The Gold Shares Fund
invests a substantial portion of its assets in issuers located in the Republic
of South Africa, and while the World Gold Fund may invest in South African
issuers, typically it does not. The Gold Shares Fund and the World Gold Fund
invest primarily in gold-related issuers; the Global Resources Fund may
diversify its investments substantially among all natural resources.

U.S. GOLD SHARES FUND

The primary investment objective of the Gold Shares Fund is to seek long-term
growth of capital as well as protection against inflation and monetary
instability. Current income is a secondary objective.

The Gold Shares Fund concentrates its investments in common stocks of companies
involved in exploration for, mining of, processing of, or dealing in gold with
emphasis on stocks of foreign companies. Normally, at least 65% of the Gold
Shares Fund's total net assets will be invested in securities of companies
involved in gold operations. The Gold Shares Fund may also invest in the
securities of issuers engaged in operations related to silver and other precious
metals and may be subject to risks not present with other mutual funds. See
"Special Risks."

The Advisor believes that, over the long term, the value of gold and other
precious metals will increase and the value of securities of companies involved
in gold operations will also increase.

The Gold Shares Fund may invest 10% of the value of its net assets in securities
that are subject to legal or contractual restrictions on resale and may also
invest in warrants. See "Special Risks."

U.S. GLOBAL RESOURCES FUND

The principal objective of the Global Resources Fund is to provide long-term
growth of capital as well as protection against inflation and monetary
instability. Current income is not a consideration.

The Global Resources Fund concentrates its investments in the equity securities
of large capitalization companies primarily engaged in the exploration, mining,
processing, fabrication and distribution of natural resources of any kind,
including timber, hydrocarbons, minerals and metals such as platinum, uranium,
strategic metals, gold, silver, diamonds, coal, oil and phosphates. Consistent
with its investment objectives, the Global Resources Fund may

8
<PAGE>
diversify its investments substantially among all natural resources. The Global
Resources Fund may invest in small issuers and may also invest up to 5% of its
total net assets in warrants.

The Global Resources Fund may invest in issuers located in any part of the
world. There is no limit on the Global Resources Fund's investment in the
securities of foreign issuers. The Global Resources Fund is highly speculative.
See "Special Risks."

U.S. WORLD GOLD FUND

The principal objective of the World Gold Fund is to provide long-term growth of
capital as well as protection against inflation and monetary instability.
Current income is not a consideration.

The World Gold Fund concentrates its investments in the equity securities of
companies primarily engaged in the exploration, mining, processing, fabrication
and distribution of gold or other metals, such as silver, platinum, uranium,
strategic metals, and natural resources such as diamonds, coal, oil and
phosphates.

The World Gold Fund seeks to achieve this investment objective by investing at
least 25% of its total assets in the securities of companies principally engaged
in natural resource operations. Under normal circumstances, at least 65% of its
total net assets will be invested in the securities of companies involved in the
exploration for, mining and processing of, or dealing in, gold.

The World Gold Fund may invest in issuers located in any part of the world.
There is no limit on the World Gold Fund's investment in securities of foreign
issuers. The World Gold Fund may also invest up to 5% of its total net assets in
warrants. The World Gold Fund is highly speculative. The World Gold Fund may
invest in small issuers. See "Special Risks."

COMMON INVESTMENT POLICIES

DEFENSIVE INVESTMENT STRATEGY

Each Fund can be temporarily invested, without limitation, other than its
investment restrictions, in short-term money market instruments, if in the
opinion of the Advisor, market conditions warrant.

ILLIQUID SECURITIES

Subject to any other investment restrictions, each Fund's investments in
illiquid securities (which includes securities without readily available market
quotations, repurchase agreements with maturities in excess of seven days, and
restricted securities) is limited, in the aggregate, to 10% of total net assets.

PUT AND CALL OPTIONS

SELLING (OR WRITING) COVERED CALL OPTIONS. Each Fund may sell (or write)
covered call options on portfolio securities to hedge against adverse movements

9
<PAGE>
in the prices of these securities. A call option gives the buyer of the option,
upon payment of a premium, the right to call upon the writer to deliver a
security on or before a fixed date at a predetermined price, referred to as the
strike price. If the price of the hedged security should fall or remain below
the strike price, the Fund will not be called upon to deliver the security, and
the Fund will retain the premium received for the option as additional income,
offsetting all or part of any decline in the value of the security. The hedge
provided by writing covered call options is limited to a price decline in the
security of no more than the option premium received by the Fund for writing the
option. If the security owned by the Fund appreciates above the option's strike
price, the Fund will generally be called upon to deliver the security, which
will prevent the Fund from receiving the benefit of any price appreciation above
the strike price.

BUYING CALL OPTIONS. Each Fund may purchase call options on securities which
each Fund intends to purchase to take advantage of anticipated positive
movements in the prices of these securities. Each Fund will realize a gain from
the exercise of a call option if, during the option period, the price of the
underlying security to be purchased increases by more than the amount of the
premium paid. A Fund will realize a loss equal to all or a portion of the
premium paid for the option if the price of the underlying security decreases or
does not increase by more than the premium.

BUYING PUT OPTIONS. Each Fund may purchase put options on portfolio securities
to hedge against adverse movements in the prices of these securities. Each Fund
may also purchase put options on securities the Fund does not currently hold if
the Fund anticipates that the price of such securities may decrease during the
option period. A put option gives the buyer of the option, upon payment of a
premium, the right to sell a security to the writer of the option on or before a
fixed date at a predetermined price. Each Fund will realize a gain from the
exercise of a put option if, during the option period, the price of the security
declines by an amount in excess of the premium paid. Each Fund will realize a
loss equal to all or a portion of the premium paid for the option if the price
of the security increases or does not decrease by more than the premium.

CLOSING TRANSACTIONS. Each Fund may dispose of an option written by the Fund by
entering into a "closing purchase transaction" for an identical option and may
dispose of an option purchased by the Fund by entering into a "closing sale
transaction" for an identical option. In each case, the closing transactions
will have the effect of terminating the rights of the option holder and the
obligations of the option purchaser and will result in a gain or loss to the
Fund based upon the relative amount of the premiums paid or received for the
original option and the closing transaction. Each Fund may sell (or write) put
options solely for the purpose of entering into closing sale transactions.

9
<PAGE>
INDEX OPTIONS. Each Fund may purchase and sell call options and purchase put
options on stock indices in order to manage cash flow, reduce equity exposure,
or to remain fully invested in equity securities. Options on securities

10
<PAGE>
indices are similar to options on a security except that, upon the exercise of
an option on a securities index, settlement is made in cash rather than in
specific securities.

LIMITATIONS ON U.S. GLOBAL RESOURCES FUND. The U.S. Global Resources Fund may
purchase and sell only call options that are listed on a securities exchange. It
may also purchase put options that are listed and traded on securities exchanges
or quoted on NASDAQ. Not more than 2% of the Fund's total net assets may be
invested in premiums on put options, and not more than 25% of total net assets
may be subject to put options. The Fund will not purchase any option if,
immediately thereafter, the aggregate market value of all outstanding options
purchased and written by the Fund would exceed 5% of its total assets. The Fund
will not write any call option if, immediately thereafter, the aggregate value
of the Fund's securities subject to outstanding call options would exceed 25% of
its total assets.

GOLD AND GOLD BULLION

The Gold Shares Fund and the World Gold Fund may invest up to 10% of each Fund's
respective total net assets in gold or gold bullion.

SPECIAL RISKS

GOLD AND SILVER SECURITIES

Investment in gold and silver securities presents risks because the price of
gold and silver has fluctuated substantially over short periods of time.

Prices may be affected by unpredictable international monetary and political
policies, such as currency devaluations or revaluations, economic and social
conditions within an individual country, trade imbalances or trade or currency
restrictions between countries. The price of gold and silver mining shares
frequently fluctuates even more dramatically than the price of gold and silver.
THE GOLD SHARES FUND HAS SIGNIFICANT INVESTMENTS IN SOUTH AFRICAN ISSUERS. THE
UNSTABLE POLITICAL AND SOCIAL CONDITIONS IN SOUTH AFRICA AND THE UNSETTLED
POLITICAL CONDITIONS PREVAILING IN NEIGHBORING COUNTRIES MAY HAVE DISRUPTIVE
EFFECTS ON THE MARKET PRICES OF THE INVESTMENTS OF THE GOLD SHARES FUND AND MAY
IMPAIR ITS ABILITY TO HOLD INVESTMENTS IN SOUTH AFRICAN ISSUERS.

GOLD AND GOLD BULLION

Because gold and gold bullion do not generate investment income, the return to
the Gold Shares Fund or the World Gold Fund from such investments will be
derived solely from the gains and losses realized by the Fund upon the sale of
the gold and gold bullion. Each Fund may also incur storage and other costs
relating to its investments in gold and gold bullion. Under certain
circumstances, these costs may exceed the custodial and brokerage costs
associated with investments in portfolio securities.

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FOREIGN SECURITIES

Investment in foreign securities may involve risks not present in domestic
investment. These include fluctuating exchange rates, the fact that foreign
issuers may be subject to different, and in some cases, less comprehensive
accounting, financial reporting and disclosure standards than are domestic
issuers; the risk of adverse changes in foreign investment or exchange control
regulations; expropriation or confiscatory taxation; political or financial
instability; or other developments which can affect investments. All of the
Funds may invest in the securities of foreign issuers that are listed on a
domestic or foreign exchange, quoted on NASDAQ, or traded in the domestic or
foreign over-the-counter market.

INVESTMENT IN SMALL ISSUERS

The Global Resources Fund and the World Gold Fund may invest in small companies
for which it is difficult to obtain reliable information and financial data. The
securities of these smaller companies may not be readily marketable, making it
difficult to dispose of shares when it may otherwise be advisable. In addition,
certain issuers in which a Fund may invest may face difficulties in obtaining
the capital necessary to continue in operation and may become insolvent, which
may result in a complete loss of the Fund's investment in such issuers.

RESTRICTED SECURITIES

Investment in restricted securities, that is, securities which are subject to
legal or contractual restrictions on resale, may present certain risks due to
the difficulty a Fund may have in disposing of such securities at a specified
time. The disposition of these securities may be restricted under Federal
securities laws, and, as a result, a Fund may either be unable to dispose of
such investments or be forced to dispose of them at less than their fair value.
A Fund may be subject to time delays and incur costs or losses as a result of
having to hold the restricted securities in its portfolio for a longer period
than intended.

BORROWING

As a fundamental policy, the Gold Shares Fund and World Gold Fund may borrow
money only for temporary or emergency purposes (not for leveraging or
investment) and the amount of such borrowings may not exceed 33 1/3% of a Fund's
total assets (including the amount borrowed) less liabilities (other than
borrowings). In addition, as a matter of nonfundamental policy, the Gold Shares
Fund and World Gold Fund will not purchase any security while borrowings
represent more than 5% of its total assets outstanding. As a fundamental policy,
the Global Resources Fund may borrow from a bank up to a limit of 5% of the
total assets of the Fund as a temporary measure (for emergency purposes).

Such borrowings may be deemed desirable or appropriate to meet redemption
requests or other temporary demands for cash. For example, rather than

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incurring the trading costs associated with liquidating portfolio securities to
raise cash to pay for shareholder redemptions, the Fund may temporarily borrow
cash and, if subsequent shareholder purchases do not provide the cash to cover
the redemptions, liquidate portfolio securities in an orderly manner to repay
the borrowed cash. To the extent that a Fund borrows money prior to selling
securities, the Fund would be leveraged such that the Fund's net assets may
appreciate or depreciate in value more than an unleveraged portfolio of similar
securities.

LENDING OF PORTFOLIO SECURITIES

Each Fund may lend securities to broker-dealers or institutional investors for
their use in connection with short sales, arbitrages and other securities
transactions. A Fund will not lend portfolio securities unless the loan is
secured by collateral (consisting of any combination of cash, United States
Government securities or irrevocable letters of credit) in an amount at least
equal (on a daily mark-to-market basis) to the current market value of the
securities loaned. In the event of a bankruptcy or breach of agreement by the
borrower of the securities, a Fund could experience delays and costs in
recovering the securities loaned. A Fund will not enter into securities lending
agreements unless its custodian bank/lending agent will fully indemnify the Fund
against loss due to borrower default. A Fund may not lend securities with an
aggregate market value of more than one-third of the Fund's total net assets.

WHEN-ISSUED AND DELAYED DELIVERY SECURITIES

The Fund may purchase securities on a when-issued or delayed delivery basis.
Securities purchased on a when-issued or delayed delivery basis are purchased
for delivery beyond the normal settlement date at a stated price and yield. No
income accrues to the purchaser of a security on a when-issued or delayed
delivery basis prior to delivery. Such securities are recorded as an asset and
are subject to changes in value based upon changes in the general level of
interest rates. Purchasing a security on a when-issued or delayed delivery basis
can involve a risk that the market price at the time of delivery may be lower
than the agreed upon purchase price, in which case there could be an unrealized
loss at the time of delivery. The Fund will only make commitments to purchase
securities on a when-issued or delayed delivery basis with the intention of
actually acquiring the securities, but may sell them before the settlement date
if it is deemed advisable. The Fund will restrict liquid securities in an amount
at least equal in value to the Fund's commitments to purchase securities on a
when-issued or delayed delivery basis. If the value of these assets declines,
the Fund will place additional liquid assets in the account on a daily basis so
that the value of the assets in the account is equal to the amount of such
commitments.

REPURCHASE AGREEMENTS

Each Fund may invest a portion of its assets in repurchase agreements with
domestic broker-dealers, banks and other financial institutions, provided the

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Fund's custodian always has possession of securities serving as collateral or
has evidence of book entry receipt of such securities. In a repurchase
agreement, a Fund purchases securities subject to the seller's agreement to
repurchase such securities at a specified time (normally one day) and price. The
repurchase price reflects an agreed-upon interest rate during the time of
investment. All repurchase agreements must be collateralized by United States
Government or government agency securities, the market values of which equal or
exceed 102% of the principal amount of the repurchase obligation. If an
institution enters an insolvency proceeding, the resulting delay in liquidation
of securities serving as collateral could cause the Fund some loss if the value
of the securities declined prior to liquidation. To minimize the risk of loss, a
Fund will enter into repurchase agreements only with institutions and dealers
which the Board of Trustees considers creditworthy.

The Global Resources Fund and the World Gold Fund may invest up to 10% of their
respective total net assets in repurchase agreements of more than seven days
maturity.

FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS -- U.S. GOLD SHARES AND U.S.
WORLD GOLD FUNDS

The Gold Shares Fund and the World Gold Fund may, but are not required to, buy
and sell futures contracts and options on futures contracts. These strategies
are generally accepted as modern portfolio management techniques, and they are
regularly used by many mutual funds and other institutional investors.
Techniques and instruments may change over time as new instruments and
strategies develop or regulations change.

Unpredictable cash flow resulting from shareholder redemptions and purchases can
have a negative impact on the funds. In addition, the funds may have to pay
transaction costs when they sell securities to reduce market exposure in a
temporarily unfavorable market environment and later repurchase the same or
similar securities when conditions improve. The funds may use investment
strategies involving futures contracts and options on futures contracts so they
can manage cash flow and exposure to market risk more efficiently.

As with any investment technique, there is no guarantee that the use of futures
and options on futures will work as the Advisor intends, and the use of futures
strategies could result in losses to the funds. Neither fund will use futures
strategies for leverage. See "Futures Contracts and Options on Futures
Contracts -- U.S. Gold Shares and U.S. World Gold Funds" in the Statement of
Additional Information.

SPECIAL LIMITATIONS

The investment objective of each Fund may not be changed without the vote of a
majority of that Fund's outstanding voting securities.

Each Fund may: (1) invest up to 5% of the value of the total assets of that Fund
in securities of any one issuer (except such limitation does not apply to

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obligations issued or guaranteed by the U.S. Government, its agencies and/or
instrumentalities); (2) not acquire more than 10% of the voting securities of
any one issuer; (3) lend portfolio securities with an aggregate market value of
not more than one-third of such Fund's total net assets; and (4) invest up to 5%
of the total net assets in securities of companies (including predecessors) that
have been in continuous operation for less than three years.

HOW TO PURCHASE SHARES

The minimum initial investment is $1,000 for regular accounts or $50 for
custodial accounts for minors. The minimum subsequent investment is $50. The
minimum initial investment for persons enrolled in the ABC Investment Plan(R) is
$100, and the minimum subsequent investment pursuant to such a plan is $30 or
more per month per account. There is no minimum purchase for retirement plan
accounts, including IRAs, administered by the Advisor or its agents and
affiliates. Management may waive minimum initial or subsequent investment
requirements for purchases made through qualifying broker-dealers or certain
institutional programs.

YOU MAY INVEST IN THE FOLLOWING WAYS:

BY MAIL

Send your application and check or money order, made payable to the respective
Fund, to P.O. Box 781234, San Antonio, Texas 78278-1234.

When making subsequent investments, enclose your check with the return
remittance portion of the confirmation of your previous investment or indicate
on your check or a separate piece of paper your name, address and account number
and mail to the address mentioned above. Do not use the remittance portion of
your confirmation statement for a different fund as it is pre-coded. This may
cause your investment to be invested into the wrong fund. If you wish to
purchase shares in more than one fund, send a separate check or money order for
each fund. Third party checks will not be accepted; and, the Trust reserves the
right to refuse to accept second party checks.

BY TELEPHONE

Once your account is open, you may make investments by telephone by calling
1-800-US-FUNDS (1-800-873-8637). Investments by telephone are not available in
money market funds or any retirement account administered by the Advisor or its
agents. The maximum telephone purchase is ten times the value of the shares
owned, calculated at the last available net asset value. Payment for shares
purchased by telephone is due within seven (7) business days after the date of
the transaction. You cannot exchange shares purchased by telephone until after
the payment has been received and accepted by the Trust.

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BY WIRE

You may make your initial or subsequent investments in U.S. Global Investors
Funds by wiring funds. To do so, call 1-800-873-8637 for a confirmation number
and wiring instructions.

BY ABC INVESTMENT PLAN(R)

The ABC Investment Plan(R) (Automatically Building Capital) is offered as a
special service allowing you to build a position in any of the U.S. Global
Investors family of funds over time without trying to outguess the market. Once
your account is open, you may make investments automatically by completing the
ABC Investment Plan(R) form authorizing U.S. Global Investors Funds to draw on
your money market or bank account monthly for a minimum of $30 a month beginning
within thirty (30) days after the account is opened. These lower minimums are a
special service bringing to small investors the benefits of U.S. Global
Investors Funds without requiring a $1,000 minimum initial investment.

Your investment dollars will automatically buy more shares when the market is
undervalued and fewer shares when the market is overvalued. By investing an
equal amount at regular, periodic intervals, you avoid the extremes in the
market. Of course, using the ABC Investment Plan(R) does not guarantee a profit.
If you sell at the bottom, no system will give you a gain.

You may call 1-800-873-8637 to open a treasury money market fund or inquire at
your bank whether it will honor debits through the Automated Clearing House
("ACH") or, if necessary, preauthorized checks. You may change the date or
amount of your investment or discontinue the Plan any time by letter received by
U.S. Global Investors Funds at least two weeks before the change is to become
effective.

ADDITIONAL INFORMATION ABOUT PURCHASES

All purchases of shares are subject to acceptance by the Trust and are not
binding until accepted. U.S. Global Investors Funds reserves the right to reject
any application or investment. Orders received by the Funds' transfer agent or a
sub-agent before 4:00 p.m. Eastern Time, Monday through Friday exclusive of
business holidays, and accepted by the Fund will receive the share price next
computed after receipt of the order. Orders to purchase shares of U.S. Gold
Shares Fund will not be accepted after 3:00 p.m. Eastern Time. In the event that
the NYSE and other financial markets close earlier, as on the eve of a holiday,
orders will become effective earlier in the day at the close of trading on the
NYSE.

If your telephone order to purchase shares is canceled due to nonpayment or late
payment (whether or not your check has been processed by the Fund), you

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<PAGE>
will be responsible for any loss incurred by the Trust by reason of such
cancellation.

If a check is returned unpaid due to nonsufficient funds, stop payment or other
reasons, the Trust will charge $20 and you will be responsible for any loss
incurred by the Trust with respect to cancelling the purchase.

To recover any such loss or charge, the Trust reserves the right, without
further notice, to redeem shares of any affiliated funds already owned by any
purchaser whose order is canceled, for whatever reason, and such a purchaser may
be prohibited from placing further orders unless investments are accompanied by
full payment by wire or cashier's check.

U.S. Global Investors Funds charges no sales commissions or "loads" of any
kind. However, investors may purchase and sell shares through registered
broker-dealers who may charge for their services.

CHECKS DRAWN ON FOREIGN BANKS. To be received in good order, an investment must
be made in U.S. dollars payable through a bank in the U.S. As an accommodation,
the Funds' transfer agent may accept checks payable in a foreign currency or
drawn on a foreign bank and will attempt to convert such checks into U.S.
dollars and repatriate such amount to the Fund's account in the U.S. Your
investment in the Fund will not be considered to have been received in good
order until your foreign check has been converted into U.S. dollars and is
available to the Funds through a bank in the U.S. Your investment in the Fund
may be delayed until your foreign check has been converted into U.S. dollars and
cleared the normal collection process. Any amounts charged to the Fund for
collection procedures will be deducted from the amount invested.

If the Trust incurs a charge for locating a shareholder without a current
address, such charge will be passed through to the shareholder.

TAX IDENTIFICATION NUMBER

Each Fund is required by Federal law to withhold and remit to the United States
Treasury a portion of the dividends, capital gain distributions and proceeds of
redemptions paid to any shareholder who fails to furnish the Fund with a correct
taxpayer identification number, who underreports dividend or interest income or
who fails to provide certification of tax identification number. In order to
avoid this withholding requirement, you must certify on your application, or on
a separate W-9 Form supplied by the Transfer Agent, that your taxpayer
identification number is correct and that you are not currently subject to
backup withholding or you are exempt from backup withholding. For individuals,
your taxpayer identification number is your social security number.

Instructions to exchange or transfer shares held in established accounts will be
refused until the certification has been provided. In addition, the Funds assess
a

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$50 administrative fee if the taxpayer identification number is not provided by
year end.

CERTIFICATES

When you open your account, U.S. Global Investors Funds will send you a
confirmation statement, which will be your evidence that you have opened an
account with U.S. Global Investors Funds. The confirmation statement is
non-negotiable, so if it is lost or destroyed, you will not be required to buy a
lost instrument bond or be subject to other expense or trouble, as you would
with a negotiable stock certificate. The Fund does not issue certificates.

HOW TO EXCHANGE SHARES

You have the privilege of exchanging into any of the other funds in the U.S.
Global Investors family of funds that are registered in your state. An exchange
involves the redemption (sale) of shares of one fund and purchase of shares of
another fund at the respective closing net asset value and is a taxable
transaction.

FUNDS IN THE U.S. GLOBAL INVESTORS FAMILY OF FUNDS

Investing involves a trade-off between potential rewards and potential risks. In
order to achieve higher rewards on your investment, you must be willing to take
on higher risk. If you are most concerned with safety of principal, a lower risk
investment will provide greater stability but with lower potential earnings.
Another strategy for dealing with volatile markets is to use the ABC Investment
Plan(R). The list below is a reward and risk guide to all of the mutual funds in
the U.S. Global Investors family of funds. This guide may help you decide if a
fund is suitable for your investment goals.

High Reward China Region Opportunity Fund
High Risk Regent Eastern European Fund
U.S. Gold Shares Fund
U.S. World Gold Fund
U.S. Global Resources Fund
Adrian Day Global Opportunity Fund
Bonnel Growth Fund
Moderate Reward U.S. Real Estate Fund
Moderate Risk U.S. All American Equity Fund
MegaTrends Fund
U.S. Income Fund
U.S. Tax Free Fund
United Services Near-Term Tax Free Fund
Low Reward U.S. Government Securities Savings Fund
Low Risk U.S. Treasury Securities Cash Fund

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If you have additional questions, one of our professional investor
representatives will personally assist you. Call 1-800-US-FUNDS.

BY TELEPHONE

You will automatically have the privilege to direct U.S. Global Investors Funds
to exchange your shares by calling toll free 1-800-US-FUNDS (1-800-873-8637).
Orders to exchange shares of U.S. Gold Shares Fund will not be accepted after
3:00 p.m. Eastern Time or at such earlier time in the day as the net asset value
per share is determined. In connection with such exchanges, neither the Fund nor
the transfer agent will be responsible for acting upon any instructions
reasonably believed by them to be genuine. The shareholder, as a result of this
policy, will bear the risk of loss. Each Fund and/or its transfer agent will,
however, employ reasonable procedures to confirm that instructions communicated
by telephone are genuine (including requiring some form of personal
identification, providing written confirmation and tape recording
conversations). If either party does not employ reasonable procedures, it may be
liable for losses due to unauthorized or fraudulent transactions.

BY MAIL

You may direct U.S. Global Investors Funds in writing to exchange your shares
between identically registered accounts in the U.S. Global Investors family of
funds. The request must be signed exactly as the name appears in the
registration. (Before writing, read "Additional Information About Exchanges.")

ADDITIONAL INFORMATION ABOUT EXCHANGES

(1) There is a $5 charge that is paid to United Shareholder Services, ("USSI"
or the "Transfer Agent"), for each exchange transaction out of any fund
account. Retirement accounts administered by the Advisor or its agents are
charged $5 for each exchange exceeding three per quarter. The exchange fee is
charged to cover administrative costs associated with handling these exchanges.

(2) An exchange involves both the redemption of shares out of the Fund and the
purchase of shares in a "Separate Fund." Like any other purchase, shares of
the Separate Fund cannot be purchased by exchange until all conditions of
purchase are met, including investable proceeds being immediately available.
Like any other redemption, the Fund reserves the right to hold exchange proceeds
for up to seven days. In general, the Fund expects to exercise this right on
exchanges of $50,000 or more. In such event, purchase of the Separate Fund
shares will be delayed until proceeds from the redemption are invested. Separate
Fund shares will be priced at their net asset value at the time of purchase.
During the period after redemption and prior to purchase, you will not be
invested in either the Fund or the Separate Fund. You will be notified
immediately if the purchase of Separate Fund shares will be delayed.

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(3) Shares may not be exchanged unless you have furnished U.S. Global Investors
Funds with your tax identification number, certified as prescribed by the
Internal Revenue Code and Regulations, and the exchange is to an account with
like registration and tax identification number. (See "Tax Identification
Number.")

(4) Exchanges out of U.S. Global Investors Funds equity funds of shares held
less than 14 days are subject to a trader's fee. (See "Traders's Fee Paid to
the Fund.")

(5) The exchange privilege may be terminated at any time. The exchange fee and
other terms of the privilege are subject to change.

HOW TO REDEEM SHARES

You may redeem any or all of your shares at will. Redemption requests received
in proper order by the Funds' transfer agent or a sub-agent before 4:00 p.m.
Eastern Time, Monday through Friday exclusive of business holidays will receive
the share price next computed after receipt of the request. Orders to purchase
shares of U.S. Gold Shares Fund will not be accepted after 3:00 p.m. Eastern
Time.

BY MAIL

A written request for redemption must be in "proper order," which requires
delivery of the following to the Transfer Agent:

(1) a written request for redemption signed by each registered owner exactly as
the shares are registered, the account number and the number of shares or the
dollar amount to be redeemed;

(2) signature guarantees when required; and

(3) such additional documents as are customarily required to evidence the
authority of persons effecting redemptions on behalf of corporations, executors,
trustees, and other fiduciaries. Redemptions will not become effective until all
documents, in the form required, have been received by the transfer agent.
(Before writing, read "Additional Information About Redemptions.")

HOW TO EXPEDITE REDEMPTIONS

To redeem your Fund shares by telephone, you may call the Fund and direct an
exchange out of the Fund into an identically registered account in a U.S. Global
Investors treasury money market fund ($1,000 minimum initial investment). You
may then write a check against your treasury money market fund account. See
"How to Exchange Shares" in the prospectus for a description of exchanges,
including the $5 exchange fee. Call 1-800-873-8637 for more

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information concerning telephone redemption and a treasury money market fund
prospectus.

SPECIAL REDEMPTION ARRANGEMENTS

Special arrangements may be made by institutional investors, or on behalf of
accounts established by brokers, advisers, banks or similar institutions, to
have redemption proceeds transferred by wire to preestablished accounts upon
telephone instructions. For further information call the Trust at
1-800-873-8637. Telephone redemptions are available for accounts with a balance
of at least $50,000. To establish telephone redemption privileges, call
1-800-873-8637 for information. Telephone redemptions are available for
Chairman's Circle accounts.

SIGNATURE GUARANTEE

Redemptions in excess of $15,000 require a signature guarantee. A signature
guarantee is required for all redemptions, regardless of the amount involved,
when the proceeds are to be paid to someone other than the registered owner of
the shares to be redeemed or if proceeds are to be mailed to an address other
than the registered address of record. When a signature guarantee is required,
each signature must be guaranteed by: (a) a federally insured bank or thrift
institution; (b) a broker or dealer (general securities, municipal, or
government) or clearing agency registered with the U.S. Securities and Exchange
Commission that maintains net capital of at least $100,000; or (c) a national
securities exchange or national securities association. The guarantee must: (i)
include the statement "Signature(s) Guaranteed"; (ii) be signed in the name of
the guarantor by an authorized person, including the person's printed name and
position with guarantor; and (iii) include a recital that the guarantor is
federally insured, maintains the requisite net capital or is a national
securities exchange or association. Shareholders living abroad may acknowledge
their signatures before a U.S. consular officer. Military personnel may
acknowledge their signatures before officers authorized to take acknowledgments
(e.g., legal officers and adjutants).

REDEMPTION PROCEEDS MAY BE SENT TO YOU:

BY MAIL

If your redemption check is mailed, it is usually mailed within 48 hours;
however, the Fund reserves the right to hold redemption proceeds for up to seven
days. If the shares to be redeemed were purchased by check, the redemption
proceeds will not be mailed until the purchase check has cleared. You may avoid
this requirement by investing by bank wire (Federal funds). Redemption checks
may be delayed if you have changed your address in the last 30 days. Please
notify the Fund promptly in writing, or by telephone, of any change of address.

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BY WIRE

You may authorize the Fund to transmit redemption proceeds by wire, provided you
send written wiring instructions with a signature guarantee at the time of
redemption. Proceeds from your redemption will usually be transmitted on the
first business day following the redemption. However, the Trust reserves the
right to hold redemptions for up to seven days. If the shares to be redeemed
were purchased by check the redemption proceeds will not be wired until the
purchase check has cleared, which may take up to seven days. There is a $10
charge to cover the wire, which is deducted from redemption proceeds.
International wires will be higher.

ADDITIONAL INFORMATION ABOUT REDEMPTIONS

The redemption price may be more or less than your cost, depending on the net
asset value of the Fund's portfolio next determined after your request is
received. A request to redeem shares in an IRA or similar retirement account
must be accompanied by an IRS Form W4-P and a reason for withdrawal as specified
by the IRS. Proceeds from the redemption of shares from a retirement account may
be subject to withholding tax.

The Trust has the authority to redeem existing accounts and to refuse a
potential account the privilege of having an account in the Trust if the Trust
reasonably determines that the failure to so redeem, or to so prohibit, would
have a material adverse consequence to the Trust and its shareholders. No
account closing fee will be charged to investors whose accounts are closed under
this provision.

TRADER'S FEE PAID TO THE FUND

A trader's fee of 25 basis points or 0.25% of the value of shares redeemed or
exchanged will be assessed to shareholders who redeem or exchange shares of a
Fund held less than fourteen (14) days. The trader's fee will be paid to the
Fund to benefit remaining shareholders by protecting them against expenses due
to excessive trading. Excessive short-term trading has an adverse impact on
effective portfolio management as well as upon Fund expenses. The Funds have
reserved the right to refuse investments from shareholders who engage in
short-term trading that may be disruptive to a Fund.

ACCOUNT CLOSING FEE

In order to reduce Fund expenses an account closing fee of $10 will be assessed
to shareholders who redeem all shares in their Fund account and direct that
redemption proceeds be directed to them by mail or wire. The charge is payable
directly to the Fund's transfer agent which, in turn, will reduce its charge to
the Fund by an equal amount. The purpose of the charge is to allocate to the
redeeming shareholders a more equitable portion of the transfer agent's fee,

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<PAGE>
including the cost of tax reporting, which is based upon the number of
shareholder accounts. Account closing fees do not apply to exchanges between the
funds in the U.S. Global Investors family of funds nor do they apply to any
involuntarily redeemed account.

SMALL ACCOUNTS

Fund accounts which fall, for any reason other than market fluctuations, below
$1,000 at any time during the month will be subject to a monthly small account
charge of $1 which will be payable quarterly. The charge is payable directly to
the Fund's Transfer Agent which, in turn, will reduce its charges to the Fund by
an equal amount. The purpose of the charge is to allocate the costs of
maintaining shareholder accounts more equally among shareholders.

As a special service for small investors, active ABC Investment Plan(R)
accounts, custodial accounts for minors, and retirement plan accounts
administered by the Advisor or its agents and affiliates will not be subject to
the small account charge. In order to reduce expenses of the Fund, the Trust may
redeem all shares in any shareholder account, other than active ABC Investment
Plan(R) accounts, custodial accounts for minors and retirement plan accounts,
if, for any period of more than three months, the account has a net value of
$500 or less and the reduction in value is not due to market fluctuation. If the
Fund elects to close such accounts, it will notify shareholders whose accounts
are below the minimum of its intention to do so, and will provide those
shareholders with an opportunity to increase their accounts by investing a
sufficient amount to bring their accounts up to the minimum amount within ninety
(90) days of the notice. No account closing fee will be charged to investors
whose accounts are closed under this redemption provision.

CONFIRMATION STATEMENTS

Shareholders normally will receive a confirmation statement after each
transaction (purchase, redemption, dividend, etc.) showing activity in the
account. If you have no transactions, you will receive an annual statement only.

OTHER SERVICES

The Trust has available a number of plans and services to meet the special needs
of certain investors. Plans available include:

(1) payroll deduction plans, including military allotments;

(2) custodial accounts for minors;

(3) a flexible, systematic withdrawal plan; and

(4) various retirement plans such as IRA, SEP/IRA, 403(b)(7), 401(k) and
employer-adopted defined contribution plans.

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<PAGE>
Application forms and brochures describing these plans and services may be
obtained from the Transfer Agent 1-800-US-FUNDS (1-800-873-8637).

There is an annual charge for each retirement plan fund account with respect to
which Security Trust & Financial Company ("ST&FC"), a wholly owned subsidiary
of the Advisor, acts as custodian. If this administrative charge is not paid
separately prior to the last business day of a calendar year or prior to a total
redemption, it will be deducted from the shareholder's account.

SHAREHOLDER SERVICES

United Shareholder Services, Inc., a wholly owned subsidiary of the Advisor,
acts as transfer and dividend paying agent for all fund accounts. Simply write
or call 1-800-US-FUNDS for prompt service on any question about your account.

24-HOUR ACCOUNT INFORMATION

Shareholders can also access 24 hours a day current information on yields, share
prices, latest dividends, account balances, deposits and redemptions. Just call
1-800-US-FUNDS and press the appropriate codes into your touch-tone phone.

HOW SHARES ARE VALUED

Shares of the Funds are purchased or redeemed continually, without a sales
charge, at their next determined net asset value per share. United Shareholder
Services, Inc. calculates the net asset value per share for each Fund. Net asset
value is determined by dividing the Fund's total net assets by its total number
of outstanding shares. Orders become effective at 4:00 p.m. Eastern time, Monday
through Friday, exclusive of business holidays when the NYSE is closed. If the
NYSE and other financial markets close early, as on the eve of a holiday, the
net asset value per share will be determined earlier in the day when trading on
the NYSE closes.

Valuation is calculated in U.S. dollars. Securities quoted in other currencies
are converted to U.S dollars using the current exchange rate in the principal
market where the security is traded. A portfolio security listed or traded on an
international market (a market other than those in the United States or Canada),
either on an exchange or over the counter, is valued at the last reported sale
price before the time assets are valued. A portfolio security listed or traded
in the domestic market (a market in the United States or Canada), either on an
exchange or over the counter, is valued at the last reported sale price before
assets are valued. Lacking any sales on that day, the security is valued at the
mean between the last reported bid and ask prices.

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When market quotations are not readily available or when restricted securities
or other assets are being valued, these assets are valued at fair value using
procedures established by the Board of Trustees. The procedures provide, in
part, that the Advisor will write a FAIR VALUE MEMORANDUM stating its
methodology and rationale for determining the fair value of the assets. A copy
of the FAIR VALUE MEMORANDUM will be delivered to the Chairman of the Audit
Committee, or any Independent Trustee if the Chairman is unavailable. The
Chairman of the Audit Committee has authority to establish fair value as
described in the FAIR VALUE MEMORANDUM or may call an immediate meeting of the
Audit Committee to determine fair value.

Portfolio securities traded on more than one market are valued according to the
broadest and most representative market. Prices used to value portfolio
securities are monitored to ensure that they represent current market values.
The calculation of net asset value may not take place concurrently with the
determination of the prices of securities used in the calculation. Events that
affect the value of portfolio securities but occur between the time prices are
established and the close of the New York Stock Exchange will not be reflected
in the calculation of net asset value, unless the Board of Trustees decides that
the particular event materially affects the net asset value. If that happens, an
adjustment will be made. If the price of a portfolio security is materially
different from its current market value, the security will be valued at fair
value as determined by management and approved by the Board of Trustees.

Debt securities maturing 60 days or less after purchase are valued based on the
amortized cost. This involves valuing an instrument at its initial cost and
assuming a constant amortization to maturity of any discount or premium, despite
the impact of fluctuating interest rates on the market value of the instrument.

DIVIDENDS AND TAXES

Each Fund intends to qualify as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). By
complying with the applicable provisions of the Code, a Fund will not be subject
to Federal income tax on its net investment income and capital gain net income
that are distributed to shareholders.

All income dividends and capital gain distributions are normally reinvested,
without charge, in additional full and fractional shares of the Funds.
Alternatively, investors may choose: (1) automatic reinvestment of capital gain
distributions in Fund shares and payment of income dividends in cash; (2)
payment of capital gain distributions in cash and automatic reinvestment of
income dividends in Fund shares; or (3) all income dividend and capital gain
distributions paid in cash. The share price of the reinvestment will be the net
asset value of the Fund shares computed at the close of business on the date the
dividend or distribution is paid. Dividend checks returned to the Funds as being

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undeliverable and dividend checks not cashed after 180 days will automatically
be reinvested at the price of the Fund on the day returned and the distribution
option will be changed to "reinvest."

At the time of purchase, the share price of a Fund may reflect undistributed
income, capital gain or unrealized appreciation of securities. Any dividend or
capital gain distribution paid to a shareholder shortly after a purchase of
shares will reduce the per share net asset value by the amount of the
distribution. Although in effect a return of capital to the shareholder, these
capital gain distributions are fully taxable.

Each Fund expects to distribute substantially all of its net investment income,
if any, and any net realized capital gains at least once each year.

Mutual funds are potentially subject to a nondeductible 4 percent excise tax
calculated as a percentage of certain undistributed amounts of taxable ordinary
income and capital gain net of capital losses. The Funds intend to make such
distributions as may be necessary to avoid this excise tax.

Dividends from taxable net investment income and distributions of net short-term
capital gain paid by each Fund are taxable to shareholders as ordinary income,
whether received in cash or reinvested in additional shares of a Fund. A portion
of these dividends may qualify for the 70 percent dividends received deduction
available to corporations. Distributions of net capital gain will be taxable to
shareholders as long-term capital gain, whether paid in cash or reinvested in
additional shares, and regardless of the length of time the investor has held
his shares.

Each January, each Fund will report to its shareholders the Federal tax status
of dividends and distributions paid or declared by the Fund during the preceding
calendar year. This statement will also indicate whether and to what extent
distributions qualify for the 70 percent dividends received deduction available
to corporations.

Each of the Funds may be subject to foreign withholding or other taxes. If more
than 50 percent in value of a Fund's total assets at the close of any taxable
year consists of securities of foreign corporations, the Fund may file an
election with the Internal Revenue Service (the "Foreign Election") that would
permit shareholders to take a credit (or a deduction) for foreign taxes paid by
the Fund. If the Foreign Election is made, shareholders would include in their
gross income both dividends received from the Fund and foreign withholding taxes
paid by the Fund. Shareholders of the Fund would be entitled to treat the
foreign taxes withheld as a credit against their United States Federal income
taxes, subject to the limitations set forth in the Code with respect to the
foreign tax credit generally. Alternatively, shareholders could, if to their
advantage, treat the foreign taxes withheld as a deduction from gross income in
computing taxable income rather than as a tax credit. Each Fund that qualifies
will make

26
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the Foreign Election and will advise its shareholders annually of their share of
the amount of foreign taxes paid by the Fund.

The foregoing discussion relates only to generally applicable Federal income tax
provisions in effect as of the date of this prospectus. Therefore, shareholders
should consult their tax advisers about the status of distributions from the
Funds in their own states and localities.

If the Fund owns shares in a foreign corporation that constitutes a "passive
foreign investment company" for U.S. Federal income tax purposes and the Fund
does not elect to treat the foreign corporation as a "qualified electing fund"
within the meaning of the Code, the Fund may be subject to U.S. Federal income
tax on a portion of any "excess distribution" it receives from the foreign
corporation or any gain it derives from the disposition of such shares, even if
such income is distributed as a taxable dividend by the Fund to its U.S.
shareholders. The Fund may also be subject to additional tax in the nature of an
interest charge with respect to deferred taxes arising from such distributions
or gains. Any tax paid by the Fund as a result of its ownership of shares in a
"passive foreign investment company" will not give rise to any deduction or
credit to the Fund or any shareholder. If the Fund owns shares in a "passive
foreign investment company" and the Fund does elect to treat the foreign
corporation as a "qualified electing fund" under the Code, the Fund may be
required to include in its income each year a portion of the ordinary income and
net capital gains of the foreign corporation, even if this income is not
distributed to the Fund. Any such income would be subject to the distribution
requirements described above even if the Fund did not receive any income to
distribute.

THE TRUST

U.S. Global Investors Funds (the "Trust") is an open-end management investment
company, consisting of numerous separate, diversified portfolios each of which
has its own investment objectives and policies. The portfolios are designed to
serve a wide range of investor needs.

The Trust was formed July 31, 1984, as a business trust under the laws of the
Commonwealth of Massachusetts. It is a series company authorized to issue series
of shares without par value, each series representing interests in a separate
portfolio, or to divide the shares of any series into classes. Shares of
numerous series have been authorized. The Board of Trustees of the Trust has the
power to create additional series, or to divide existing series into two or more
classes, at any time, without a vote of shareholders of the Trust.

Under the Trust's First Amended and Restated Master Trust Agreement (the
"Master Trust Agreement"), no annual or regular meeting of shareholders is
required, although the Trustees may authorize special meetings from time to
time. Under the terms of the Master Trust Agreement, the Trustees will be a

27
<PAGE>
self-perpetuating body and will continue their positions until they resign, die
or are removed by a written instrument signed by at least two-thirds of the
Trustees, by vote of shareholders holding not less than two-thirds of the shares
then outstanding of the Trust cast at any meeting called for that purpose, or by
a written declaration signed by shareholders holding not less than two-thirds of
the shares then outstanding.

On any matter submitted to shareholders, shares of each portfolio entitle their
holder to one vote per share, irrespective of the relative net asset value of
the portfolio's shares. On matters affecting an individual portfolio, a separate
vote of shareholders of the portfolio is required. Each portfolio's shares are
fully paid and non-assessable by the Trust, have no preemptive or subscription
rights, and are fully transferable, with no conversion rights.

MANAGEMENT OF THE FUNDS

TRUSTEES

The business affairs of each Fund are managed by the Trust's Board of Trustees.
The Trustees establish policies, as well as review and approve contracts and
their continuance. The Trustees also elect the officers and select the Trustees
to serve as executive and audit committee members.

THE INVESTMENT ADVISOR

U.S. Global Investors, Inc., 7900 Callaghan Road, San Antonio, Texas 78229,
under an investment advisory agreement with the Trust dated October 26, 1989,
furnishes investment advice and is responsible for overall management of the
Trust's business affairs. Frank E. Holmes, Chief Executive Officer and Chairman
of the Board of Directors of the Advisor, as well as President and a Trustee of
the Trust, owns more than 25% of the voting stock of the Advisor and is its
controlling person. The Advisor was organized in 1968.

The Advisor uses a team approach to manage the assets of the Gold Shares and
World Gold Funds. Ralph Aldis, Michael Chapman and Naijiang Zhou lead the team
that meets regularly to review portfolio holdings and discuss buy and sell
activity. Mr. Aldis is a Chartered Financial Analyst who holds a masters degree
in energy and mineral resources. He has been the Advisor's director of research
since April 1989 and has served as portfolio manager of the Global Resources
Fund since November 1992. Mr. Chapman joined the Advisor as a senior research
analyst in November 1995. Before joining the Advisor, he was a petroleum
engineer for UNOCAL Corporation. Mr. Chapman holds a masters degree in energy
and mineral resources. Dr. Zhou began his employment with the Advisor as a
senior research analyst in January 1995. Before joining the Advisor, he worked
for the Bureau of Economic Geology at The University of Texas. Dr. Zhou holds
both an M.B.A. in operations management and a Ph.D. in energy and mineral
resources management.

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<PAGE>
Ralph Aldis is the portfolio manager for the Global Resources Fund. Mr. Aldis'
background is discussed above.

Investment decisions for the funds are made independently from those of other
investment companies advised by U.S. Global Investors, Inc.

Advisor investment personnel may invest in securities for their own account
pursuant to a code of ethics that establishes procedures for personal investing
and restricts certain transactions.

The Advisor provides the Trust with office space, facilities and business
equipment and provides the services of executive and clerical personnel for
administering the affairs of the Trust. The Advisor pays the expense of printing
and mailing prospectuses and sales materials used for promotional purposes.

The Advisory Agreement with the Trust provides for each Fund to pay the Advisor
a management fee based upon the average net assets of that Fund separately. The
fee for managing each of the Gold Shares Fund, Global Resources Fund, and World
Gold Fund for the fiscal period ended June 30, 1996, was .75%, 1.00%, and .98%,
respectively, of average net assets. The fee charged the Global Resources Fund
and the World Gold Fund is higher than that charged by most other investment
companies.

The Advisor may, out of profits derived from its management fee, pay certain
financial institutions (which may include banks, securities dealers and other
industry professionals) a "servicing fee" for performing certain
administrative servicing functions for Fund shareholders to the extent these
institutions are allowed to do so by applicable statute, rule or regulation.
These fees will be paid periodically and will generally be based on a percentage
of the value of the institutions' client Fund shares.

The Transfer Agency Agreement with the Trust provides for each Fund to pay USSI
an annual fee of $23.00 per account ( 1/12 of $23.00 monthly). In connection
with obtaining and/or providing administrative services to the beneficial owners
of Trust shares through broker-dealers, banks, trust companies and similar
institutions which provide such services and maintain an omnibus account with
the Transfer Agent, each Fund shall pay to the Transfer Agent a monthly fee
equal to one-twelfth ( 1/12) of 12.5 basis points (.00125) of the value of the
shares of the Funds held in accounts at the institutions, which payment shall
not exceed $1.92 multiplied by the average daily number of accounts holding
Trust shares at the institution. These fees cover the usual transfer agency
functions. In addition, the Funds bear certain other Transfer Agent expenses
such as the costs of record retention and postage, plus the telephone and line
charges (including the toll-free 800 service) used by shareholders to contact
the Transfer Agent. For the fiscal period ended June 30, 1996, the Gold Shares
Fund, the Global Resources Fund and the World Gold Fund paid a total of
$1,040,959, $156,329 and $635,901, respectively, for transfer agency, lock box
and printing services.

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<PAGE>
The transfer agent performs bookkeeping and accounting services and determines
the daily net asset value for the Fund for a fee based upon assets and subject
to an annual minimum fee of $35,000.

Additionally, the Advisor is reimbursed certain costs for in-house legal
services pertaining to each Fund.

The Trust pays all other expenses for its operations and activities. Each Fund
of the Trust pays its allocable portion of these expenses. The expenses borne by
the Trust include the charges and expenses of any shareholder servicing agents,
custodian fees, legal and auditors' expenses, brokerage commissions for
portfolio transactions, the advisory fee, extraordinary expenses, expenses of
shareholder and trustee meetings, expenses for preparing, printing and mailing
proxy statements, reports and other communications to shareholders, and expenses
of registering and qualifying shares for sale, among others.

PERFORMANCE INFORMATION

From time to time, in advertisements or in reports to shareholders or
prospective shareholders, a Fund may compare its performance, either in terms of
its yield, total return or its yield and total return, to that of other mutual
funds with similar investment objectives and to stock or other indices as
reported in various periodicals. Performance comparisons should not be
considered as representative of the future performance of a Fund.

A Fund's average annual total return is computed by determining the average
annual compounded rate of return for a specified period that, if applied to a
hypothetical $1,000 initial investment, would produce the redeemable value of
that investment at the end of the period, assuming reinvestment of all dividends
and distributions and with recognition of all recurring charges. Each Fund may
also utilize a total return for differing periods computed in the same manner
but without annualizing the total return.

The standard total return results do not take into account recurring and
nonrecurring charges for optional services which only certain shareholders elect
and which involve nominal fees such as the $5 fee for exchanges.

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U.S. GLOBAL INVESTORS FUNDS

SHARES OF THE FUNDS ARE SOLD
AT NET ASSET VALUE
WITHOUT SALES COMMISSIONS OR 12B-1 FEES

U.S. Gold Shares Fund
U.S. Global Resources Fund
U.S. World Gold Fund

INVESTMENT ADVISOR
U.S. Global Investors, Inc.
7900 Callaghan Road
Mailing Address: P.O. Box 781234
San Antonio, Texas 78278-1234

TRANSFER AGENT
United Shareholder Services, Inc.
P.O. Box 781234
San Antonio, Texas 78278-1234

CUSTODIAN
Bankers Trust Company
16 Wall Street
New York, New York 10005

LEGAL COUNSEL
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, Massachusetts 02109

INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
One Riverwalk Place, Suite 900
San Antonio, Texas 78205

100% No Load

Be Sure to Retain This Prospectus.
It Contains Valuable Information.