A CASE STUDY OF THE AIRLINE INDUSTRY

FRANK HOLMES, CEO AND CHIEF INVESTMENT OFFICER

U.S. GLOBAL INVESTORS

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ABOUT U.S. GLOBAL INVESTORS (GROW)

U.S. Global Investors, Inc. is an innovative investment manager

with vast experience in global markets and specialized sectors.

Founded as an investment club, the company became a registered

investment adviser in 1968 and has a longstanding history of global

investing and launching first-of-their kind investment products. U.S.

Global Investors is well known for expertise in gold and precious

metals, natural resources and emerging markets.

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OUTLOOK FOR THE U.S. AIRLINES

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OUTLOOK FOR THE U.S. AIRLINES

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U.S. DOMESTIC MARKETS REMAIN STRONG

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INTERNATIONAL MARKETS ARE MIXED

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INTERNATIONAL MARKETS ARE MIXED

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LABOR COSTS ARE GOING UP

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LABOR COSTS ARE GOING UP

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JET FUEL IS STILL A MAJOR COST

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JET FUEL IS STILL A MAJOR COST

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JET FUEL IS STILL A MAJOR COST

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WHAT INVESTORS THINK

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WHAT INVESTORS THINK

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AIRLINE STOCKS TOP THE LIST

OF BARRON’S 500 BARGAINS

As-of May 02, 2015

P/E = Price/Earnings Ratio 16

AIRLINE STOCKS TOOK OFF PRIOR

TO OIL PRICES FALLING

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CONSOLIDATION OF AIRLINES

HAS LED TO BETTER MARGINS

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DOMESTIC AIRLINES ARE FORECAST TO SEE

GREATEST FREE CASH FLOW IN OVER A DECADE

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DIVIDEND YIELD GROWTH RATE HIGHER

FOR AIRLINES THAN TRANSPORTATION

1-Year Dividend Yield Growth

Bloomberg U.S. Airlines Index 98.64%

Dow Jones Transportation Index 11.30%

As of 6/10/2015

Dividend yield is the dividend per share, divided by the price per share. Dividend yield growth rate is the annualized percentage rate of growth that a particular stock’s dividend yield undergoes over a period of time.

Past performance is not a guarantee of future results.

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U.S. AIRLINE STOCKS ARE RELATIVELY

INEXPENSIVE COMPARED TO BROADER MARKET

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U.S. AIRLINES HAVE BEEN PAYING DOWN DEBT

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ANCILLARY REVENUE HAS TAKEN OFF —

UP 12X FROM 2007 TO 2013

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INCREASING SEAT CAPACITY ON PLANES

HAS LOWERED BREAKEVEN COSTS

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BETTER, MORE FUEL-EFFICIENT AIRCRAFT

HAS LOWERED COSTS

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STREAMLINED PROCESSES AND INCREASED

COST DISCIPLINE HAVE DRIVEN PROFITABILITY

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IMPROVED LUGGAGE HANDLING

SAVES AIRLINES $18 BILLION A YEAR

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PILOT SHORTAGE LIKELY TO

MODERATE CAPACITY GROWTH

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EXPANDING GLOBAL MIDDLE CLASS

HAS INCREASED TRAVEL DEMAND

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EMERGING MARKETS PROVIDE

GROWTH OPPORTUNITIES

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INDEX METHODOLOGY — SMART BETA DESIGN

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U.S. GLOBAL JETS INDEX

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ELIGIBLE UNIVERSE OF AIRLINES IN INDEX

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INDEX DETAILS

Top 10 Constituents (as of 06/19/2015)

Company Weight Country of Domicile

Delta Airlines Inc. 12.29% United States

United Continental Holdings 10.41% United States

American Airlines Group Inc. 10.37% United States

Southwest Airlines Co. 10.17% United States

JetBlue Airways Corp. 4.60% United States

Alaska Air Group Inc. 4.29% United States

Virgin America Inc. 4.20% United States

Allegiant Travel Co. 4.09% United States

Hawaiian Holdings Inc. 3.66% United States

General Dynamics 3.56% United States

The index is rebalanced and reconstituted quarterly.

Please visit www.usglobalindex.com for current weightings.

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GO TO USFUNDS.COM

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FOR MORE INFORMATION

www.usglobalindex.com

210.348.2650

@USGlobalETFs

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DISCLOSURES

The US Global JETS Index seeks to provide access to the global airline industry. The index uses various fundamental screens

to determine the most efficient airline companies in the world, and also provides diversification through exposure to global aircraft

manufacturers and airport companies. The index consists of common stocks listed on well-developed exchanges across the

globe. It is not possible to invest directly in an index. 15-305

Cash Flow is a measure of the amount of cash generated by a company’s normal business operations. Smart beta refers to

investment strategies that emphasize the use of alternative weighting schemes to traditional market capitalization based indices.

Free Cash Flow (FCF) represents the cash that a company is able to generate after laying out the money required to maintain or

expand its asset base. Load factor is the ratio of revenue passenger miles and available seat miles for an airline. Diversification

does not protect an investor from market risks and does not assure a profit. Price-Earnings Ratio (P/E Ratio) is determined

by dividing the price of the stock by the company's forecasted earnings per share. There is no guarantee that the issuers of any

securities will declare dividends in the future or that, if declared, will remain at current levels or increase over time. The S&P 500

Stock Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies. The Bloomberg

United States Airlines Index is a capitalization-weighted index of the leading airline stocks in the United States. The Dow Jones

Transportation Average is a price-weighted average of 20 U.S. transportation stocks.

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