U.S. Global Investors sees assets under management grow to $1.5B in fiscal Q2

U.S. Global Investors reported fiscal Q2 (ended Dec 31, 2025) AUM of approximately $1.5 billion (up 12% quarter‑over‑quarter and 5% year‑over‑year) and noted AUM rose to $1.7 billion as of Feb. 19, 2026. Operating revenue increased by $259,000 (11.5% vs prior quarter) and by $279,000 year‑over‑year, expenses fell $172,000 y/y, and income before taxes was $535,000 versus a $116,000 loss in the year‑ago quarter; net working capital was ~$36.7 million including $25.2 million cash. The board approved a monthly dividend of $0.0075 per share for Jan–Mar 2026 and repurchased ~262,000 shares under a $5 million annual buyback authorization, while management highlighted resilient air travel demand and strong gold fundamentals (citing World Gold Council data and a Goldman Sachs $5,400/oz 2026 forecast).

Analysis

Market structure: GROW, gold bullion (GLD) and junior/senior miners (GDX/GDXJ) and travel assets (JETS, airlines) are primary beneficiaries; fee revenue and AUM-linked economics improve at +12% QoQ AUM and $1.7B run-rate, translating to ~+$160–$200M incremental AUM in the quarter. Gold demand (5,000t+ in 2025; central banks 863t) implies structural deficit vs mine supply, boosting pricing power for miners and ETFs; a sustained gold rerating typically depresses real yields, weakens USD and supports commodity-linked FX (AUD, CAD). Options/VIX for miners and small-cap manager stocks should reprice higher on realized volatility.

Risk assessment: Tail risks include a rapid unwind of gold (>-15% in 3 months) if real yields spike, regulatory fee pressure or a liquidity squeeze if GROW uses >50% cash for buybacks; small-cap illiquidity can amplify moves. Time windows: immediate (days) — headline-driven flows; short (weeks–months) — AUM flows and monthly dividend/buyback messaging; long (quarters–years) — central bank reserve shifts and miners’ capex cycle. Hidden dependency: GROW’s reported AUM gain may be market appreciation rather than durable net new flows; monitor quarterly net flows.

Trade implications: Size concentrated, tactical positions — hold a modest 2–3% long in GROW (ticker GROW) to play AUM momentum, overweight GLD/GDX for commodity hedge (3–6%); use 9–12 month GLD call spreads to express upside with limited capital. Pair trades: long GDX (5%) vs short SPY (2.5%) to capture commodity beta while hedging market risk. Rotate +3–5% from long-duration tech into miners and JETS over next 2–8 weeks; trim on gold down 10% or AUM down 5% QoQ.

Contrarian angles: Consensus fixates on gold upside; misses concentration risk — central banks could slow purchases if FX reserve strategies change, and miners face multi-year underinvestment that can both amplify rallies and lead to sharp corrections. GROW’s buybacks and monthly dividend could be using cash to mask fee compression; relative mispricing exists if market undervalues $25M cash vs market cap — a catalyst for activist/arb interest. Historical parallel: 2009–11 gold run produced outsized miner volatility; expect similar two-way action, so size positions accordingly.

Key Decisions for Investors

• Establish a 2–3% long position in GROW (ticker GROW) within 2 weeks to capture AUM momentum and buyback support; implement a 15% stop-loss and plan to trim 50% of the position at +30–40% within 6–12 months or if quarterly net flows turn negative by >5% QoQ.
• Allocate 3–6% to gold exposure via GLD or GDX (prefer miners for leverage). Hedge capital risk with a 9–12 month GLD call spread (buy nearer-term call, sell higher strike) sized to limit max loss to ~25% of the allocation; increase exposure if gold >10% above current levels or if Fed signals cuts in next 90 days.
• Execute a pair trade: long GDX equal-dollar 5% of portfolio vs short SPY 2.5% to capture commodity upside while hedging equity beta; rebalance monthly and close if gold drops >10% from current highs or if implied vol in GDX contracts declines >30% from entry.
• Tactical 1–2% allocation to travel via JETS ETF to play resilient passenger demand; set exit triggers: sell if industry load factor falls >2 percentage points QoQ or jet fuel (US Gulf Coast) rises >20% from current levels (costs compress margins).