PRELIMINARY NOTICE OF SPECIAL MEETING
U.S. GLOBAL INVESTORS FUNDS
7900 CALLAGHAN ROAD
SAN ANTONIO, TEXAS, 78229
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS OF
U.S. REAL ESTATE FUND
A special meeting of shareholders of the U.S. Real Estate Fund (the
"Fund"), a series of U. S. Global Investors Funds, a Massachusetts business
trust (the "Trust"), will be held at the offices of U.S. Global Investors, Inc.
(manager of the Fund), 7900 Callaghan Road, San Antonio, Texas 78229 on December
29, 1997, at 2:00 p.m., local time, for the following purposes:
1. to consider and vote upon approval of the sub-advisory agreement among the
Trust, U. S. Global Investors, Inc. and Goodman & Company N.Y. Ltd. with
respect to management of the Fund's portfolio; and
2. to consider and act upon any other matters which may properly come before
the meeting or any adjournments thereof.
On October 29, 1997, the Board of Trustees voted to recommend to
shareholders that they approve the new sub-advisory agreement. Only shareholders
of record at the close of business on December 4, 1997, are entitled to notice
of and to vote at the meeting or any adjournment thereof.
We hope you will be represented at the meeting by signing and returning the
enclosed proxy card in the accompanying envelope as promptly as possible,
whether or not you expect to be present in person. The vote of every shareholder
is important, and the Board of Trustees appreciates the cooperation of
shareholders in promptly returning proxies which helps limit expenses incident
to proxy solicitation.
BY ORDER OF
THE BOARD OF TRUSTEES
Susan B. McGee
Secretary of the Trust
Date: December __, 1997
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PRELIMINARY PROXY STATEMENT
U.S. GLOBAL INVESTORS FUNDS
7900 Callaghan Road
San Antonio, Texas 78229
PROXY STATEMENT FOR SPECIAL MEETING OF
SHAREHOLDERS OF U.S. REAL ESTATE FUND
INTRODUCTION
This proxy statement is furnished to shareholders of the U.S. Real Estate
Fund, a series of U.S. Global Investors Funds, a Massachusetts business trust
(the "Trust"), in connection with the solicitation of proxies by and on behalf
of the Board of Trustees of the Trust to be used at the special meeting of
shareholders to be held at the offices of U.S. Global Investors, Inc., first
floor board room, 7900 Callaghan Road, San Antonio, Texas 78229 at 2 p.m. on
Monday, December 29, 1997, or at any adjournments thereof (the "Meeting"). The
proxy may be revoked at any time before it is exercised by the subsequent
execution and submission of a revised proxy, by written notice of revocation to
the Secretary of the Trust, or by voting in person at the Meeting.
This proxy statement and the accompanying proxy were mailed to shareholders
on or about December 12, 1997. Shareholders of record at the close of business
on December 4, 1997 ("record date") are entitled to notice of and to vote at the
Meeting or any adjournment thereof.
The Trust is presently composed of eleven separate series: U.S. Gold Shares
Fund, U.S. World Gold Fund, U.S. Income Fund, U.S. Global Resources Fund, U.S.
All American Equity Fund, U.S. Treasury Securities Cash Fund, U.S. Government
Securities Savings Fund, U.S. Tax Free Fund, United Services Near Term Tax Free
Fund, China Region Opportunity Fund (collectively, the "Funds"), and U.S. Real
Estate Fund (the "Fund").
At fiscal year end, June 30, 1997, the net asset value per share of the
U.S. Real Estate Fund was $14.22, reflecting net assets of $13,895,563 and
approximately 977,184 shares outstanding.
At record date, there were ____________ shares of the Fund outstanding.
Each full share of the Fund outstanding on the record date is entitled to one
full vote, and each fractional share outstanding on that date is entitled to a
proportionate share of one vote.
All shares represented at the Meeting by properly executed proxies will be
voted in accordance with the instructions thereon, if any, and if no
instructions are given, the proxy will be voted for approval of the sub-
advisory agreement (Proposal 1). The Board of Trustees does not know of any
actions to be considered at the Meeting other than the proposal referred to
above.
In addition to the solicitation of proxies by mail, officers and employees
of the Trust and U.S. Global Investors, Inc. ("U.S. Global" or the "Adviser"),
the manager and investment Adviser of the Trust, without additional
compensation, may solicit proxies in person or by telephone. The cost of the
solicitation of proxies by the Board of Trustees of the Trust for this meeting
of shareholders will be borne by the Fund and will include any reimbursement
paid to fiduciaries, brokerage firms, nominees and custodians for their expenses
in forwarding solicitation material regarding the meeting to beneficial owners.
A copy of the Annual Report of the Trust for the fiscal year ended June 30,
1997, including audited financial statements of the Trust, was mailed to
shareholders on or about August 29, 1997. A copy of the Annual Report will be
mailed at no charge to any shareholder requesting such by calling
1-800-US-FUNDS.
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PROPOSAL TO APPROVE
THE SUB-ADVISORY AGREEMENT
At the Meeting, shareholders of the Fund will be asked to approve a new
sub-advisory agreement among the Fund, U.S. Global and Goodman & Company N.Y.
Ltd. (the "sub-advisory agreement"). The proposed sub- advisory agreement
defines, among other things, the duties and liabilities of the parties, the
duration and termination of the Agreement, the standard of care borne by the
Sub-Adviser, and the allocation of the advisory fee between the Adviser and the
Sub-Adviser. It also contains express limitations of liability for the
shareholders and trustees of the Fund, among others. Investment advisory fees
paid by the Fund will not change. The Fund's current investment adviser, U.S.
Global, will be responsible for Goodman & Company N.Y. Ltd.'s fees.
Approval requires the affirmative vote of the lesser of (1) more than 50%
of the outstanding shares of the Fund or (2) 67% or more of the shares of the
Fund present at the Meeting if more than 50% of the outstanding shares of the
Fund are represented at the Meeting in person or by proxy.
U.S. GLOBAL INVESTORS, INC. (THE "ADVISER")
U.S. Global, a Texas corporation, located at 7900 Callaghan Road, San
Antonio, Texas, is a registered investment adviser that acts as the Fund's
investment adviser pursuant to an investment advisory agreement dated October
27, 1989 (the "advisory agreement"). The advisory agreement was approved by
shareholders on October 27, 1989, and was most recently approved by the members
of the Board of Trustees who are not "interested persons" of any party to the
advisory agreement (collectively, the "Independent Trustees") on October 24,
1997.
On an annualized basis the Adviser is paid 0.75% of the U.S. Real Estate
Fund's average daily net assets up to $250 million for its investment advisory
services and 0.50% of the Fund's average daily net assets over $250 million. The
Adviser will continue to provide administrative services to the Fund pursuant to
the advisory agreement following approval of the sub-advisory agreement. The
advisory agreement and other contracts between the Adviser and the Fund will be
unaffected by approval of the sub-advisory agreement.
GOODMAN & COMPANY N.Y. LTD. (THE PROPOSED SUB-ADVISER)
Goodman & Company N.Y. Ltd. is registered with the Securities and Exchange
Commission as an investment adviser and is located at Suite 5500, Scotia Plaza,
40 King Street West, Toronto, Ontario M5H 4A9. It is wholly owned by Goodman &
Company Ltd., which is ultimately wholly owned by Dundee Bancorp Inc., an
Ontario incorporated Canadian company listed on the Toronto Stock Exchange. Mr.
Nathan Edward "Ned" Goodman, Chairman of Goodman & Company N.Y. Ltd., is the
"controlling person" (as that term is defined in the rules and regulations of
the Securities and Exchange Commission) of Goodman & Company N.Y. Ltd. and
Goodman & Company Ltd.
Goodman & Company Ltd. is an independent investment adviser founded in 1988
when Dynamic Mutual Funds ended its relationship with Beutel Goodman & Company.
It provides investment management and advisory services to private accounts of
institutional and individual clients and to 25 mutual funds registered for sale
in various Canadian provinces, including two real estate oriented funds. As of
June 30, 1997, Goodman & Company Ltd. had total assets under management of
approximately $___ billion, including approximately $184 million in real estate
related assets.
Goodman & Company Ltd. has two operating divisions, Goodman & Company
Investment Counsel and Dynamic Mutual Funds. Mr. Goodman is the largest
shareholder of Goodman & Company Investment Counsel through Dundee Bancorp Inc.
The other managing partners collectively own 30% of Goodman & Company Investment
Counsel. Goodman & Company Investment Counsel serves as investment counsel to
Dynamic Funds,
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a Canadian mutual fund family, and has utilized a value approach to stock
selection for over 25 years, favoring long-term, patient growth of capital.
The following table lists the officers of Goodman & Company Ltd. who serve
in various positions with Goodman & Company N.Y. Ltd.
POSITION WITH
GOODMAN & COMPANY
NAME N.Y. LTD. OTHER AFFILIATED POSITIONS
- ----------------------- ----------------- ------------------------------
Nathan Edward Goodman Chairman Chairman, President, CEO of
Dundee Bancorp Inc. and
Chairman, CEO of Goodman &
Company Ltd.
Jonathan Carter Goodman Vice President, Vice President, Director
Securities Analyst, Goodman &
Company Ltd.
Norman Peter Bengough Vice President, President, Goodman & Company
Director Ltd.
Murray John Vice President Mining Analyst, Goodman &
Company Ltd.
Vaino Verner Keelman Vice President Vice President, Goodman &
Company Ltd.
Ray Anthony Benzinger Chief Financial Vice President, Finance and
Officer Chief Financial Officer,
Goodman & Company Ltd.
Carole Colbert Corporate Vice President, Goodman &
Secretary Company Ltd.
The following individuals will be responsible for the services to the Fund.
Ned Goodman has served as Chairman, President and Chief Executive Officer of
Goodman & Company Ltd. since 1979. Mr. Goodman will be supported by three other
Goodman & Company portfolio managers. Anne MacLean is responsible for U.S. and
Latin American equities. She was awarded the Chartered Financial Analyst
designation in 1985 and joined Goodman & Company Ltd. in January 1995. Noah
Blackstein is responsible for the management of U.S. equities and gained
experience as an investment analyst and junior portfolio manager from 1994 to
1997 when he joined Goodman & Company Ltd. Oscar Belaiche is responsible for the
security analysis of real estate securities of public companies. He has over 14
years of real estate related investment experience.
DESCRIPTION OF THE SUB-ADVISORY AGREEMENT
The advisory agreement between U.S. Global and the Trust permits U.S.
Global from time to time to engage one or more sub-advisers to assist in the
performance of its services. Pursuant to the advisory agreement, the Adviser has
engaged Goodman & Company N.Y. Ltd. as Sub-Adviser to the Fund, subject to
shareholder approval. The sub-advisory agreement attached as exhibit "A" defines
the relationship of the parties.
Under the sub-advisory agreement, Goodman & Company would provide portfolio
management services for the Fund's entire portfolio. For its services, the
Adviser will pay Goodman & Company 50 percent of the Management Fee (as defined
in the advisory agreement) paid by the Fund to the Adviser, net of all mutually
agreed upon fee waivers and reimbursements and reimbursements required by
applicable law. PLEASE NOTE THAT
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THE FEE PAID TO GOODMAN & COMPANY WILL BE PAID BY THE ADVISER OUT OF ITS
MANAGEMENT FEE AND WILL NOT INCREASE THE EXPENSES OF THE FUND.
Under the terms of the sub-advisory agreement, the Sub-Adviser is required
to furnish the Adviser information and advice, including advice on the
allocation of investments among real estate related securities, relating to that
portion of the Fund's assets as the Adviser shall from time to time designate;
furnish continuously an investment program with respect to such assets; and to
otherwise manage the Fund's investments in accordance with the investment
objectives and policies as stated in the Fund's Prospectus and Statement of
Additional Information. Goodman & Company bears all expenses in connection with
the performance of the services under the sub-advisory agreement. It is
anticipated that Goodman & Company will manage the Fund's entire portfolio, with
the exception of daily cash management services, which services are expected to
continue to be provided by the Adviser.
The sub-advisory agreement provides that in the absence of willful
misfeasance, bad faith or ordinary negligence, the Sub-Adviser shall not be
liable for any act or omission in the course or in connection with the rendering
of its services thereunder.
The sub-advisory agreement will become effective upon shareholder approval
and remain in effect pursuant to its terms for two years from the date of
shareholder approval and from year to year thereafter so long as such
continuation is specifically approved at least annually (i) by either the
Trustees of the Trust or by vote of a majority of the outstanding voting
securities (as defined in the 1940 Act) of the Fund, and (ii) in either event by
the vote of a majority of the Trustees of the Trust who are not parties to this
agreement or "interested persons" (as defined in the 1940 Act) of any such
party, cast in person at a meeting called for the purpose of voting on such
approval. The sub-advisory agreement is terminable, without penalty, by the
Board, by a Majority Vote of the Fund's shareholders, by the Adviser or by
Goodman & Company, in each case on not more than sixty nor less than thirty
days' written notice to the other party and to the Fund. The sub-advisory
agreement terminates automatically in the event of its assignment (as defined in
the 1940 Act).
If for any reason the sub-advisory agreement is not approved, the
investment advisory agreement between the Fund and U.S. Global will remain in
effect.
PRINCIPAL SHAREHOLDERS OF THE FUND
As of December 4, 1997, the officers and Trustees of the Trust, as a group,
owned less than 1% of the outstanding shares of the Fund. Charles Schwab & Co.
Inc. held ___________ or _____% of the Fund as record holder and not as
beneficial owner. No other shareholders held more than 5% on that date.
ACTION ON PROPOSAL TO APPROVE
REVIEW PROCESS OF THE BOARD
At a meeting held on August 25, 1997, the Adviser recommended appointing
Goodman & Company as Sub-Adviser to the Fund because, in the Adviser's opinion,
Goodman & Company had the expertise to enhance management of the Fund's
portfolio. The Adviser provided Board of Trustees with materials furnished by
Goodman & Company N.Y. Ltd. which discussed Goodman & Company's philosophy of
management, performance expectations, methods of operation and the performance
of similar mutual funds registered and operated by Goodman & Company in Canada.
On October 29, 1997, the Board discussed approval of the sub-advisory
agreement, again reviewing the materials furnished by Goodman & Company. The
Board considered the background and experience of Goodman & Company personnel,
the terms of the sub-advisory agreement, and the historical performance of
portfolios managed by Goodman & Company.
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At its October 29, 1997, meeting, the Board, including a majority of the
Independent Trustees, reviewed and approved the sub-advisory agreement with
Goodman & Company N.Y. Ltd., subject to shareholder approval. The Board noted
that the Adviser remained responsible for overseeing portfolio management
matters and compliance with relevant laws, rules and regulations.
THE BOARD OF TRUSTEES OF THE TRUST, INCLUDING A MAJORITY OF THE INDEPENDENT
TRUSTEES, RECOMMENDS THAT SHAREHOLDERS OF THE FUND VOTE FOR APPROVAL OF THE
PROPOSAL TO APPROVE THE SUB-ADVISORY AGREEMENT.
REQUIRED VOTE
Approval of the sub-advisory agreement requires the affirmative vote of the
holders of a majority of the outstanding voting securities of the U.S. Real
Estate Fund, defined under the 1940 Act as the lesser of (1) a majority of the
outstanding shares of a Fund or (2) 67% or more of the shares of a Fund
represented at the special meeting if more than 50% of the outstanding shares of
the Fund are present or represented by proxy at the Meeting. Abstentions and
proxies with respect to shares held by a broker or other nominee that are not
voted because the nominee lacks discretionary authority to vote the shares will
be treated as follows. "Abstentions" and "broker non-votes" will have the effect
of "no" votes.
In the event that the shareholders of the Fund fail to approve the
sub-advisory agreement, the Board of Trustees will consider other appropriate
arrangements.
OTHER MATTERS
No business other than the matters set forth in this proxy statement is
expected to come before the meeting, but should any other matters requiring vote
of shareholders arise, including a question of adjourning the meeting, the
persons named in the accompanying proxy will vote thereon according to their
best judgment in the interests of the Fund.
The foregoing notice and proxy statement are sent by order of the Board of
Trustees.
Susan B. McGee
Secretary
Dated: December ___, 1997
5
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ATTACHMENT A
TO PRELIMINARY PROXY STATEMENT
SUB-ADVISORY AGREEMENT
AGREEMENT made as of the __________________________ day of
_____________________ , 1997, among U.S. GLOBAL INVESTORS, INC., a corporation
organized under the laws of the State of Texas (the "Adviser"), U.S. GLOBAL
INVESTORS FUNDS, a Massachusetts business trust having its principal place of
business in San Antonio, Texas (the "Trust"), on behalf of the U.S. REAL ESTATE
FUND (the "Fund"), a series of shares of the Trust, and GOODMAN & COMPANY N.Y.
LTD. (the "Sub-Adviser"), a corporation organized under the laws of Canada.
WHEREAS, the Adviser is engaged in the business of rendering investment
management services to the Trust; and
WHEREAS, the Trust is an open-end management investment company and is so
registered under the Investment Company Act of 1940 (the "1940 Act"); and
WHEREAS, the Trust is operated as a "series company" within the meaning of
Rule 18f-2 under the 1940 Act and has four separate series of shares of
beneficial interest, one of which series is the Fund.
NOW, THEREFORE, WITNESSETH: That it is hereby agreed between the parties
hereto as follows:
1. APPOINTMENT OF SUB-ADVISER.
The Sub-Adviser is hereby appointed to provide investment advisory
services to the Fund for the period and on the terms herein set forth.
The Sub-Adviser accepts such appointment and agrees to render the
services herein set forth, for the compensation herein provided. To
enable Sub-Adviser to exercise fully its discretion and authority as
provided in this Section 1, the Trust hereby constitutes and appoints
Sub-Adviser as the Trust's agent and attorney-in-fact with full power
and authority for the Trust and on the Trust's behalf to buy, sell and
otherwise deal in securities and contracts relating to same for the
Fund.
2. DUTIES OF SUB-ADVISER.
(a) The Sub-Adviser is hereby authorized and directed and hereby
agrees, subject to the stated investment objectives and
policies of the Fund as set forth in the Fund's Prospectus (as
defined below) and subject to the supervision of the Adviser
and the Board of Trustees of the Trust, (i) to develop,
recommend and implement such investment program and strategy
for the Fund as may from time to time under the circumstances
appears most appropriate to the achievement of the investment
objective of the Fund as stated in the aforesaid Prospectus,
(ii) to provide research and analysis relative to the
investment program and investments of the Fund, (iii) to
determine which securities should be purchased and sold and
what portion of the assets of the Fund should be held in cash
or cash equivalents, and (iv) to monitor on a continuing basis
the performance of the portfolio securities of the Fund. The
Sub-Adviser will advise the Trust's custodian and the Adviser
on a prompt basis of each purchase and sale of a portfolio
security specifying the name of the issuer, the description
and amount or number of shares of the security purchased, the
market price, commission and gross or net price, trade date,
settlement date and identity of the effecting broker or
dealer; and will review the accuracy of the pricing of
portfolio securities in accordance with Trust procedures. From
time to time, as the Trustees of the Trust or the Adviser may
reasonably request, the Sub-Adviser will furnish to the
Trust's officers and to each of its Trustees reports on
portfolio transactions and reports on issues of securities
held in the portfolio, all in such detail as the Trust or the
Adviser may reasonably request. The Sub-Adviser will also
inform the Trust's officers and Trustees on a current basis of
changes in investment strategy or tactics. The Sub-Adviser
will make its officers and employees available to meet with
the Trust's officers and Trustees on due notice to review the
investments and investment program of the Fund in the light of
current and prospective economic and market conditions.
The Sub-Adviser shall place all orders for the purchase and
sale of portfolio securities for the account of the Fund with
brokers or dealers selected by the Sub-Adviser, although the
Trust will pay the actual brokerage commissions and any
transfer taxes with respect to transactions in the portfolio
securities of the Trust. The Sub-Adviser is authorized to
submit any such order collectively with orders on behalf of
other accounts under its management, provided that the
Sub-Adviser shall have determined that such action is in the
best interest of the Fund and is in accordance with applicable
law, including, without
<PAGE>
Sub-Advisory Agreement
Page 2 of 5
limitation, Rule 17d-1 under the 1940 Act. In executing
portfolio transactions and selecting brokers or dealers, the
Sub-Adviser will use its best efforts to seek on behalf of the
Fund the best overall terms available. In assessing the best
overall terms available for any transaction, the Sub-Adviser
shall consider all factors it deems relevant, including the
breadth of the market in the security, the price of the
security, the financial condition and execution capability of
the broker or dealer, and the reasonableness of the
commission, if any (for the specific transaction and on a
continuing basis). In evaluating the best overall terms
available, and in selecting the broker or dealer to execute a
particular transaction, the Sub-Adviser may also consider the
brokerage and research services [as those terms are defined in
Section 28(e) of the Securities Exchange Act of 1934] provided
to the Fund and/or other accounts over which the Sub- Adviser
or an affiliate of the Sub-Adviser exercises investment
discretion. The Sub-Adviser is authorized to pay to a broker
or dealer who provides such brokerage and research services a
commission for executing a portfolio transaction for the Fund
which is in excess of the amount of commission another broker
or dealer would have charged for effecting that transaction
if, but only if, the Sub-Adviser determines in good faith that
such commission was reasonable in relation to the value of the
brokerage and research services provided by such broker or
dealer, viewed in terms of that particular transaction or in
terms of all of the accounts over which investment discretion
is so exercised. An affiliated person of the Sub-Adviser may
provide brokerage services to the Fund provided that the
Sub-Adviser shall have determined that such action is
consistent with its obligation to seek the best overall terms
available and is in accordance with applicable law, including,
without limitation, Section 17(e) of the 1940 Act. The
foregoing shall not be deemed to authorize an affiliated
person of the Sub-Adviser to enter into transactions with the
Fund as principal.
In the performance of its duties hereunder, the Sub-Adviser is
and shall be an independent contractor and unless otherwise
expressly provided or authorized shall have no authority to
act for or represent the Trust in any way or otherwise be
deemed to be an agent of the Trust or of the Adviser.
(b) Delivery of Documents. The Adviser will furnish upon request
or has previously furnished the Sub- Adviser with true copies
of each of the following:
(i) The Trust's Master Trust Agreement dated April 15, 1993 as
filed with the Secretary of State of the Commonwealth of
Massachusetts and all amendments thereto (such Master
Trust Agreement, as presently in effect and as it shall
from time to time be amended, is herein called the "Master
Trust Agreement");
(ii)The Trust's By-Laws and amendments thereto (such By-Laws,
as presently in effect and as it shall from time to time
be amended, are herein called the "By-Laws");
(iii)Resolutions of the Trust's Board of Trustees
authorizing the appointment of the Adviser and Sub-
Adviser and approving the Advisory Agreement and this
Agreement;
(iv)The most recent Post-Effective Amendment to the Trust's
Registration Statement on Form N-1A under the Securities
Act of 1933 as amended ("1933 Act") and the 1940 Act as
filed with the Securities and Exchange Commission;
(v) The Fund's most recent prospectus (such prospectus, as
presently in effect and all amendments and supplements
thereto being referred to herein as the "Prospectus"); and
(vi)All resolutions of the Board of Trustees of the Trust per-
taining to the management of the assets of the Fund.
During the term of this Agreement, the Trust shall not implement
any amendment or supplement to the Fund's prospectus or statement
of additional information relating to the investment objectives
and policies of the Fund without at least five (5) days' prior
notice to the Sub-Adviser.
<PAGE>
Sub-Advisory Agreement
Page 3 of 5
3. ADVISORY FEE.
(a) For the services to be provided to the Fund by the Sub-Adviser
as provided in Paragraph 2 hereof, the Adviser will pay the
Sub-Adviser in accordance with the following:
(i) The Adviser will pay to the Sub-Adviser 50 percent of the
Management Fee, net of all mutually agreed upon fee
waivers and reimbursements and reimbursements required by
applicable law.
(ii)The Fund is not responsible for paying any portion of
the Sub-Adviser's fees.
(iii)The fee is payable in monthly installments in arrears.
The term "Management Fee" means the management fee
paid by the Trust to the Adviser under the Advisory
Agreement, dated as of October 27, 1989, between the
Trust and the Adviser with respect to the management of
the Fund.
(iv)Further, the Adviser and the Sub-Adviser will share
expenses associated with marketing the Fund's shares
equally.
(b) In the case of termination of the Agreement during any
calendar month, the fee with respect to that month shall be
reduced proportionately based upon the number of calendar days
during which it is in effect and the fee shall be computed
upon the average net assets of the Fund for the days during
which it is so in effect.
4. EXPENSES.
During the term of this Agreement, the Sub-Adviser will bear all
expenses incurred by it in the performance of its duties hereunder
which are not reimbursable by the Fund under the current advisory
agreement with the Fund.
5. FUND TRANSACTIONS.
The Sub-Adviser agrees that neither it nor any of its employees,
officers or directors will take any short-term position in the
shares of the Fund for trading purposes; provided, however, that
such prohibition shall not prevent the purchase of shares of the
Fund by any of the persons above described for their account and
for investment at the price at which such shares are available to
the public at the time of purchase.
6. REPRESENTATION AND WARRANTY.
The Sub-Adviser hereby represents and warrants to the Adviser that
it is duly registered as an investment Adviser, or is exempt from
registration, under the Investment Adviser's Act of 1940, as
amended, and that it shall maintain such registration or exemption
at all times during which this Agreement is in effect.
7. LIABILITY OF SUB-ADVISER.
In the performance of its duties under this Agreement, the
Sub-Adviser shall act in conformity with and in compliance with
the investment objectives and policies of the Fund, and the
requirements of the 1940 Act and all other applicable U.S. Federal
and state laws and regulations and shall not cause the Fund to
take any action that would require the Fund or any affiliated
person thereof to register as a commodity pool operator under the
terms of the U.S. Commodity Exchange Act, as amended (it being
understood by the Sub-Adviser that a notice of eligibility may be
filed on behalf of the Trust pursuant to Rule 4.5 promulgated
under said Act). The Sub-Adviser shall be responsible for
maintaining such procedures as may be reasonably necessary to
ensure that the investment and reinvestment of the Fund's assets
are made in compliance with its investment objectives and policies
and with all applicable statutes and regulations and that the Fund
qualifies as a regulated investment company under Subchapter M of
the Internal Revenue Code. No provision of this Agreement shall be
deemed to protect the Sub-Adviser against any liability to the
Trust or its shareholders to
<PAGE>
Sub-Advisory Agreement
Page 4 of 5
which it might otherwise be subject by reason of any willful
misfeasance, bad faith or ordinary negligence in the performance
of its duties or the reckless disregard of its obligations and
duties under this Agreement.
8. REPORTS.
The Sub-Adviser shall render to the Board of Trustees of the Trust
such periodic and special reports as the Board of Trustees may
reasonably request with respect to matters relating to duties of
the Sub-Adviser set forth herein.
9. DURATION AND TERMINATION OF THIS AGREEMENT.
(a) Duration. With respect to the Trust, this Agreement shall
become effective upon the date hereof and shall continue in
full force and effect for two years from the date of
shareholder approval and from year to year thereafter so long
as such continuance is approved at least annually (i) by
either the Trustees of the Trust or by vote of a majority of
the outstanding voting securities (as defined in the 1940 Act)
of the Fund, and (ii) in either event by the vote of a
majority of the Trustees of the Trust who are not parties to
this Agreement or "interested persons" (as defined in the 1940
Act) of any such party, cast in person at a meeting called for
the purpose of voting on such approval.
(b) Termination. With respect to the Trust, this Agreement may be
terminated at any time, without payment of any penalty (i) by
vote of the Trustees of the Trust or by vote of a majority of
the outstanding voting securities of the Fund (as defined in
the 1940 Act) on sixty (60) days' written notice to the other
parties, (ii) by the Adviser on sixty (60) days' written
notice to the other parties or (iii) by the Sub-Adviser on
ninety (90) days' written notice to the other parties.
(c) Automatic Termination. With respect to the Trust, this
Agreement shall automatically and immediately terminate in the
event of its assignment (within the meaning of the 1940 Act)
or upon expiration of the Advisory Agreement now or hereafter
in effect between the Adviser and the Trust with respect to
the Fund.
10. SERVICES NOT EXCLUSIVE.
The services of the Sub-Adviser of the Fund hereunder are not to
be deemed exclusive, and the Sub-Adviser shall be free to render
similar services to others.
11. LIMITATION OF LIABILITY.
(a) The Trust. The term "U.S. Global Investors Funds" means and
refers to the Trustees from time to time serving under the
Master Trust Agreement. It is expressly agreed that the
obligations of the Trust hereunder shall not be binding upon
any of the Trustees, shareholders, nominees, officers, agents
or employees of the Trust, personally, but bind only the
assets and property of the Trust, as provided in the Master
Trust Agreement. The execution and delivery of the Agreement
have been authorized by the Trustees and shareholders of the
Trust and signed by an authorized officer of the Trust, acting
as such, and neither such authorization by such Trustees and
shareholders nor such execution and delivery by such officer
shall be deemed to have been made by any of them individually
or to impose any liability on any of them personally, but
shall bind only the assets and property of the Trust as
provided in its Master Trust Agreement.
(b) The Adviser and Sub-Adviser. It is expressly agreed that the
obligations of the Adviser and Sub-Adviser hereunder shall not
be binding upon any of the shareholders, nominees, officers,
agents or employees of the Adviser or Sub-Adviser, personally,
but bind only the assets and property of the Adviser and Sub-
Adviser, respectively. The execution and delivery of the
Agreement have been authorized by the directors and officers
of the Adviser and Sub-Adviser and signed by an authorized
officer of the Adviser and Sub- Adviser, acting as such, and
neither such authorization by such directors and officers nor
such execution and delivery by such officer shall be deemed to
have been made by any of them individually or to impose
<PAGE>
Sub-Advisory Agreement
Page 5 of 5
any liability on any of them personally, but shall bind only
the assets and property of the Adviser and Sub- Adviser,
respectively.
12. MISCELLANEOUS.
(a) Notice. Any notice under this Agreement shall be in writing,
addressed and delivered or mailed, postage prepaid, to the
other parties at such address as such other parties may
designate in writing for the receipt of such notices.
(b) Severability. If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule or
otherwise, the remainder shall not be thereby affected.
(c) Applicable Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of
Texas.
(d) This Agreement constitutes the entire agreement of the parties
and supersedes all prior or contemporaneous written or oral
negotiations, correspondence, agreements and understandings,
regarding the subject matter hereof.
13. STANDARD OF CARE.
To the extent permitted under applicable law (including section 36
of the 1940 Act), the Sub-Adviser will not be liable to the Trust
or the Adviser for any losses incurred by the Trust, the Fund or
the Adviser that arise out of or are in any way connected with any
recommendation or other act or failure to act of the Sub-Adviser
under this Agreement, including, but not limited to, any error in
judgment with respect to the Fund, so long as such recommendation
or other act or failure to act does not constitute a breach of the
Sub-Adviser's duty to the Trust, the Fund or the Adviser under
this Agreement. Anything in this section 13 or otherwise in this
Agreement to the contrary notwithstanding, however, nothing herein
shall constitute a waiver or limitation of any rights that the
Trust, the Adviser or the Fund may have under any Federal or state
securities laws.
IN WITNESS WHEREOF, the Adviser, the Trust and the Sub-Adviser have caused this
Agreement to be executed on the day and year first above written.
U.S. GLOBAL INVESTORS, INC.
By:
---------------------------
GOODMAN & COMPANY N.Y. LTD.
By:
---------------------------
U.S. GLOBAL INVESTORS FUNDS
By:
---------------------------
- --------------------------------------------------------------------------------
PRELIMINARY FORM OF PROXY
U.S. GLOBAL INVESTORS FUNDS - U.S. REAL ESTATE FUND
7900 CALLAGHAN ROAD
SAN ANTONIO, TEXAS 78229
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned hereby appoints Susan B. McGee and David J. Clark, and each
of them, proxies with full power of substitution to act for and vote on behalf
of the undersigned all shares of the U.S. Real Estate Fund (the "Fund') which
the undersigned would be entitled to vote if personally present at the special
meeting of shareholders of the Fund to be held on December 29, 1997 (the
"Meeting.")
The undersigned hereby acknowledges receipt of the NOTICE OF SPECIAL
MEETING OF SHAREHOLDERS AND PROXY STATEMENT furnished in connection with the
Meeting and hereby instructs said proxies to vote said shares as indicated
hereon. Both of the proxies present and acting at the Meeting in person or by
substitute (or, if only one shall be so present, then that one) shall have and
may exercise all of the power and authority of said proxies hereunder. The
undersigned hereby revokes any proxy previously given.
IF A CHOICE IS SPECIFIED, THIS PROXY WILL BE VOTED AS INDICATED. IF NO
CHOICE IS SPECIFIED, THIS PROXY WILL BE VOTED FOR EACH OF THE PROPOSALS. In
their discretion, the proxies are authorized to vote upon such business as may
properly come before the Meeting. The Board of Trustees recommends a vote FOR
each of the proposals.
This proxy may be revoked at any time prior to the exercise of the powers
conferred by the proxy.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY, USING THE ENCLOSED
ENVELOPE.
<PAGE>
PRELIMINARY FORM OF PROXY
FUND--U.S. REAL ESTATE FUND CENTRAL # - ACCOUNT # -
FOR AGAINST ABSTAIN
--- ------- -------
1. Approve the sub-advisory agreement among U.S. [ ] [ ] [ ]
Global Investors Funds, U.S. Global Investors,
Inc. and Goodman & Company N.Y. Ltd.; and
2. Transact such other business as may properly [ ] [ ] [ ]
come before the meeting or any adjournment
thereof.
DATED: ----------,1997
-------------------------
(Signature)
-------------------------
(Signature if Held Jointly)
Please sign exactly as your name appears on this
proxy card. When signing as attorney, executor,
administrator, trustee or guardian, please give full
title as such. If a corporation, please sign in the
full corporate name by president or other authorized
officer. If a partnership, please sign in
partnership name by authorized person.
