[Graphic: USGI Logo]
U.S. Global Investors
September 2, 1998
Dear Shareholder:
We recently mailed to you a Fund Profile Card highlighting specific data on the
Global Resources Fund. We apologize that the card mistakenly reported the
year-to-date return as 25.25% when it was in fact -25.25%. We have enhanced our
procedures to verify the accuracy when printing Fund Profile Cards.
More importantly for Global Resources shareholders, we are constantly monitoring
the investment strategy in order to deal with the worldwide deflation in
commodity prices. As you may have read in the newspapers, the price of oil and
metals has fallen substantially over the past 12 months and the commodity price
declines have impacted oil related and mining stocks which make up the Resources
Fund. We have created a new strategy in order to better deal with the volatile
and falling commodity prices by focusing on large cap stocks and increasing the
number of holdings.
We measure our success by comparing ourselves to the average Lipper global
resources fund. The portfolio managers receive bonuses based on delivering
superior consistent performance, which is measured by beating this index.
As we navigate through these unchartered waters of extreme volatility in
commodity prices, we remain confident that the Global Resources Fund should
represent 5-10% of your total diversified portfolio.
For contrarian investors, we believe now is the time to make additional
investments in this fund, and the best method is to use the ABC Plan. Please
call one of our investor representatives to discuss the implementation and
benefits of the ABC Plan.
We thank you for choosing U.S. Global Investors for your investments.
Sincerely,
/s/ Frank E. Holmes
Frank E. Holmes
Chairman & CEO
7900 Callaghan Road
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Mail Address:
PO Box 781234
San Antonio, Texas
78278-1234
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Tel 210-308-1234
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1-800-US-FUNDS
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Fax 210-308-1217
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email [email protected]
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