This article first ran in Financial Advisor IQ's sister publication, Ignites.

Robinhood’s second-quarter decline in users is partly to blame for U.S. Global Investors’ low trading volume and shrinking asset base, U.S. Global’s chief executive said last week.

U.S. Global had $2.9 billion in assets as of June 30, down from $4.2 billion a year ago, the earnings report says.

The drop is due to “a global stock market decline and higher interest rates,” wrote Frank Holmes, the company’s CEO and investment chief, in its fiscal year-end earnings release published Thursday.

Holmes also points a finger at Robinhood, citing the trading app’s overall decline in retail trading activity.

At the beginning of the pandemic, retail trading activity surged as “a new audience of investors and speculators” were “stuck at home” and flush with government stimulus cash, Holmes noted. Investors interested in distressed stocks and industries stuffed money into the U.S. Global Jets ETF, which invests in the global airlines industry, pushing its assets above $4 billion by March 2021, he wrote. The ETF, U.S. Global’s largest long-term fund, now has $2.5 billion in assets, its website shows.

Investors piled $137 million into the Jets ETF in March 2021, Morningstar data shows.

Much of that trading activity happened on Robinhood’s platform, Holmes said. But Robinhood has recently seen a “sizable decline in the number of active users” due to rising inflation, interest rates, higher oil prices and the ongoing war in Ukraine, he added.

Though the ETF recorded net inflows of $2.2 billion in 2020 and $668 million in 2021, Morningstar data shows, it bled $88 million during the first seven months of 2022.

The ETF leaked $92 million in July, compared to $130 million two months earlier, Morningstar’s database shows. The alleviated outflows are “good news,” Holmes said, ”leading us to believe that sentiment could be ready to shift to the upside.”

Overall, U.S. Global’s 15 mutual funds and ETFs collected a combined $132 million in net inflows during the year ended July 31, according to Morningstar Direct. The funds had $3 billion in assets as of that day.

The firm’s mutual funds and ETFs had $3.9 billion in assets as of July 31, 2021, down from $4.2 billion the month prior, Morningstar data shows.

In July, Robinhood reported that it had shed a third of its monthly active users from 12 months earlier. In all, the firm had 14 million active accounts as of June 30, from a high of 21.3 million a year ago.

These combined factors “greatly contributed” to lower trading volumes and U.S. Global’s declining assets under management, Holmes said.

Last month, Robinhood announced that it would lay off 23% of its workforce citing rising inflation and the cryptocurrency downturn. Three months earlier, the firm had laid off 9% of its workforce.

U.S. Global reported operating revenues of $25 million during the year ended June 30, up from $22 million a year prior, the company’s earnings report shows. The firm reported operating expenses of $13 million for the year ended June 30, about the same as a year ago.