Note 3 - Investment Management and Other Fees

6 Months Ended

Dec. 31, 2024

Notes to Financial Statements

Investment Management and Other Fees [Text Block]

NOTE 3. INVESTMENT MANAGEMENT AND OTHER FEES

The following table presents operating revenues disaggregated by performance obligation.

	Six Months Ended						Three Months Ended
	December 31,						December 31,
(dollars in thousands)	2024			2023			2024			2023
ETF advisory fees	$	3,593		$	5,171		$	1,829		$	2,462
USGIF advisory fees		893			965			427			459
USGIF performance fees received (paid)		(159	)		(243	)		(56	)		(131	)
Total Advisory Fees		4,327			5,893			2,200			2,790
USGIF administrative services fees		61			58			31			28
Total Operating Revenue	$	4,388		$	5,951		$	2,231		$	2,818

The Company serves as investment advisor to four U.S.-based exchange-traded fund (ETF) clients: U.S. Global Jets ETF (ticker JETS), U.S. Global GO GOLD and Precious Metal Miners ETF (ticker GOAU), U.S. Global Sea to Sky Cargo ETF (ticker SEA), and U.S. Global Technology and Aerospace & Defense ETF (ticker WAR). The Company receives a unitary management fee of 0.60 percent of average net assets and has agreed to bear all expenses of the U.S.-based ETFs, except the U.S. Global Sea to Sky Cargo ETF ("SEA"). The Company has agreed to contractually limit the expenses of SEA through  April 2025. The aggregate fees waived, and expenses borne by the Company for SEA were $39,000 and $78,000 for the three and six months ended December 31, 2024, respectively, and $43,000 and $78,000 for the three and six months ended December 31, 2023, respectively. The Company also serves as investment advisor to one European-based ETF, The Travel UCITS ETF (ticker TRIP). The U.S. Global Jets UCITS ETF merged into The Travel UCITS ETF in April 2024. The Company receives a unitary management fee of 0.69 percent of average net assets and has agreed to bear all expenses of the European-based ETF.

The Company serves as investment adviser to USGIF and receives advisory fees comprised of two components: a base management fee and a performance fee. The management fee is based on a specified percentage of net assets under management. The performance fee is a fulcrum fee that is adjusted upwards or downwards by 0.25 percent when there is a performance difference of 5 percent or more between a fund’s performance and that of its designated benchmark index over the prior rolling 12 months. This performance adjustment began to be phased out during the fourth quarter of fiscal 2024 and will cease during the fourth quarter of fiscal 2025. During the phase-out period, the adjustment for the performance fee can only be adjusted downward.

The Company has agreed to contractually limit the expenses of USGIF, except the U.S. Government Securities Ultra-Short Bond Fund, through April 2025. The Company has voluntarily waived or reduced its fees and/or agreed to pay expenses on the U.S. Government Securities Ultra-Short Bond Fund. This cap will continue on a voluntary basis at the Company’s discretion. The aggregate fees waived and expenses borne by the Company for USGIF were $304,000 and $532,000 for the three and six months ended December 31, 2024, respectively, and $192,000 and $445,000 for the three and six months ended December 31, 2023, respectively. Management cannot predict the impact of future waivers due to the number of variables and the range of potential outcomes.

The Company receives administrative service fees from USGIF based on an annual rate of 0.05 percent on the average daily net assets of each fund.

As of December 31, 2024, the Company had $759,000 in receivables from fund clients, of which $642,000 was from the ETFs and $117,000 was from USGIF. As of June 30, 2024, the Company had $772,000 in receivables from fund clients, of which $647,000 was from the ETFs and $125,000 was from USGIF. There was no allowance for credit losses related to receivables as of December 31, 2024, or June 30, 2024.