GROW's High-Yield Dividends and Bitcoin Bet Offer Shelter in Volatile Markets

Investors seeking income and resilience amid geopolitical uncertainty may find an intriguing opportunity in U.S. Global Investors (GROW), a firm now doubling down on two themes: sustainable dividends and strategic exposure to digital assets like Bitcoin. With a 3.73% annualized dividend yield, a 10.5% shareholder yield, and ETFs targeting gold and defense sectors, GROW is positioning itself as a contrarian play for those willing to navigate today's volatile landscape.

The Dividend Anchor: Income Amid Uncertainty

GROW's monthly dividend of $0.0075 per share—sustained through Q3 2025—translates to an annualized yield of 3.73% based on its June 16 closing price of $2.41. While modest in absolute terms, this dividend is significant for two reasons:
1. Reliability: Despite its small size, GROW has maintained monthly payouts for years, a rarity in an era of dividend cuts.
2. Shareholder Yield: The 10.5% shareholder yield as of March 2025 combines dividends with net share repurchases, reflecting management's commitment to returning capital. This metric, often overlooked, underscores the firm's focus on total return for investors.

The Bitcoin Play: Digital Assets as a New Safe Haven

GROW's balance sheet now includes direct Bitcoin purchases and holdings in HIVE Digital Technologies (HIVE), a crypto mining firm. The rationale? Bitcoin's growing legitimacy as an institutional asset. With BlackRock's Bitcoin ETF (ARBK) amassing $50 billion in assets under management (AUM) in just months, the firm sees parallels to gold's rise as a reserve asset.

The strategy is twofold:
- Regulatory Shifts: Favorable rulings, such as the SEC's approval of Bitcoin ETFs, signal broader acceptance.
- Portfolio Diversification: Bitcoin's low correlation with traditional assets makes it a hedge against both inflation and geopolitical risk.

Risks are clear—Bitcoin's volatility and regulatory uncertainty—but GROW's gradual accumulation strategy aims to mitigate these through dollar-cost averaging.

ETFs as Sector-Specific Shields: Gold and Defense

GROW's ETFs, managed under its Smart Beta 2.0 framework, target sectors poised to thrive in volatile markets:

1. U.S. Global GO GOLD ETF (GOAU):
2. Focuses on high-quality gold miners and royalty companies, leveraging central banks' historic gold-buying spree. Over 95% of central banks expect further purchases, with gold now the ECB's second-largest reserve asset.

3. Smart Beta 2.0 screens for fundamentals like profitability and production growth, avoiding speculative plays.

4. U.S. Global Technology and Aerospace & Defense ETF (WAR):

5. Targets firms at the intersection of national security and innovation: aerospace, cybersecurity, and semiconductors. Geopolitical tensions are fueling demand for these technologies, creating a secular growth tailwind.

Why GROW Now?

The combination of income, gold-linked exposure, and defense/tech plays creates a portfolio that's both defensive and growth-oriented. Central banks' gold accumulation and Basel III's recognition of gold as a Tier 1 asset could push prices toward $6,000/oz, directly benefiting GOAU. Meanwhile, WAR's focus on high-tech security aligns with global spending trends.

Risks and Considerations

• Dividend Sustainability: While GROW has been consistent, dividends are discretionary and tied to performance.
• ETF Concentration: GOAU and WAR's narrow focus could amplify volatility.
• Bitcoin Volatility: Digital assets remain unpredictable, though GROW's gradual approach aims to smooth this.

Investment Takeaways

For income-focused investors, GROW's 3.73% yield and 10.5% shareholder yield offer a high return on capital relative to its valuation. Meanwhile, its Bitcoin and ETF strategies position it to capitalize on two megatrends: institutional crypto adoption and demand for “hard asset” resilience.

Actionable Advice:
- Buy: For those seeking income and exposure to gold/defense sectors, GROW's stock and ETFs warrant consideration.
- Hold: The firm's strategy is long-term; short-term volatility is expected.
- Avoid: Investors averse to sector concentration or crypto exposure may prefer alternatives.

In a world where geopolitical tensions and inflation loom large, GROW's blend of dividends, gold, and innovation-driven ETFs may just be the asymmetric bet investors need. The question isn't whether uncertainty will persist—it's how to profit from it.