Charles de Vaulx

Charles de Vaulx Premium Guru

Last Update: 08-29-2016
Related: IVA International Fund

Number of Stocks: 82
Number of New Stocks: 5

Total Value: $4,409 Mil
Q/Q Turnover: 8%

Countries: USA KOR FRA FIN JPN HKG NOR TWN CHE BEL GBR MYS DEU
Details: Top Buys | Top Sales | Top Holdings  Embed:

Charles de Vaulx Watch

  • IVA Funds Comments on Emerson

    Well, Deere (NYSE:DE) is a much finer business. They are world-class. It's much more oligopolistic. The returns of capital over a full cycle dwarf I believe what they are with other fertilizer companies. Yes, the answer is that we've looked at both. There's a clear price at which we would love to own Deere. But, in the fertilizer space, and understand there's a proposed merger going on, we have found it difficult to find one company that truly has much lower costs than the other. In a commodity business, if you can find a company that structurally has much lower cost than another, it helps assure you that they will be a survivor if and when commodity prices are low, and then the company may in fact capitalize during times of low prices to maybe increase its market share position.

    So, we have not been able to identify, at least yet, a fertilizer company that really stands out in terms of quality and being lower cost than others.

    From Charles de Vaulx (Trades, Portfolio)'s semi-annual 2016 IVA Funds call.   


  • IVA Funds Comments on Emerson

    Question: You hold Emerson Electric. It's always acquired a lot of companies over the years. Do you think it could be anything like a Valeant, who acquired a lot of companies over the years, or have some characteristics like that?

    Chuck de Lardemelle: No, not at all. Emerson (NYSE:EMR) has a very strong track record of making smart acquisitions, spending some Research and Development. Now, over the last few years, they've diversified into a business that they are now trying to spin off and making a number of acquisitions in uninterruptible power supplies/electronics. That vertical, if you will, has not worked out at all for Emerson, and they are going back to basics and spinning off or selling that division. The balance sheet is extremely strong, which is absolutely not the case of a Valeant.

    Emerson is in no position to hike prices and gouge clients. It's a very strong industrial company that is extremely well managed from an operational point of view, that has a strong balance sheet, and has not been able to hike prices substantially. However, again, over the last few years, they've gathered a collection of companies in one segment and those acquisitions turned out to be a mistake. And that's what provided us with an opportunity to get into Emerson. And they recognized their mistake and are now trying to correct it. So, in no way, shape, or form is it similar to a Valeant, in our opinion.

    From Charles de Vaulx (Trades, Portfolio)'s semi-annual 2016 IVA Funds call.   


  • IVA Funds Comments on Samsung Electronics

    Moving on to another large position, Samsung Electronics (XKRX:000830) is up substantially from its lows this year, and therefore not as attractive as it used to be. However, the balance sheet is pristine, the company sells not too far from tangible book value, and we believe the semiconductor franchise is highly profitable and solid. As for the telecom handset franchise, well, I'm sure you'll remember Motorola, Nokia, Siemens, SAGEM, or Sony Ericsson handset businesses? Yes, they all went out of business.

    So, what do we see there? Why should it be different for Samsung Electronics? Well, SmartPhones today are computers; capital employed in the business is very low. Basically, Samsung simply assembles the mini-computers. It's a business model akin to the Dell business model, not to a Nokia. The industry has consolidated; through its scale, Samsung is able to achieve buying power and a low-cost position; and through the advanced manufacturing of display components and semiconductors, Samsung has an edge in innovation. We anticipate this business may remain profitable in the future, with single-digit operating margin being sustainable despite heavy Chinese competition. Capital allocation and governance have been issues in the past for the Samsung Group. There are encouraging signs on both fronts. Time will tell.

    From Charles de Vaulx (Trades, Portfolio)'s semi-annual 2016 IVA Funds call.   


  • IVA Funds Comments on Berkshire Hathaway

    Next, Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B) still sells at a discount to our estimate of its intrinsic value. We believe Buffett and his successors are likely to be able to compound at a reasonable pace, particularly due to the ability to buy listed or unlisted companies in their entirety. A few looming technological innovations, though may be tough for some of Berkshire's businesses: driverless cars would negatively impact insurance subsidiary Geico, while driverless trucks would be a large negative for the railroad business, Burlington Northern. If battery technology continues to improve, at some point the storage of electricity will make renewable energy a lot more competitive against traditional utilities, a risk for Berkshire Hathaway Energy.

    This conglomerate, however, is well equipped to deal with obsolescence: after all, Berkshire is quite unique in its ability to take cash flow from mature or declining business A to invest successfully in a totally unrelated business B. Hopefully the lack of red tape, the investment culture, the candor, and the ethics on display at Berkshire will survive both Warren and Charlie.

    From Charles de Vaulx (Trades, Portfolio)'s semi-annual 2016 IVA Funds call.   


  • Charles de Vaulx's IVA Funds Semi-Annual Update Call Transcript

    Tara Hannigan: Thank you. Good afternoon, and welcome to the Semi-Annual IVA Funds Update Call. We thank you for joining us this afternoon. I'm Tara Hannigan, the Director of Mutual Fund Distribution. Our goals on this call are to update you on the funds and share our current investment thinking. Our portfolio managers, Charles De Vaulx and Chuck de Lardemelle, will give you prepared remarks explaining what they're seeing around the world today, and then we will open the call up to questions.


    To update you on IVA as a firm as of August 31, 2016, we had approximately $18.5 billion in total assets under management with our two mutual funds comprising just over $12.3 billion of that total. Both funds do remain closed to new investors.

      


  • IVA International Gains 4 in 2nd Quarter

    IVA International Fund (Trades, Portfolio) acquired four new holdings in the second quarter. They are Fanuc Corp. (TSE:6954), Euler Hermes Group SA (XPAR:ELE), Yokogawa Electric Corp. (TSE:6841) and Jardine Lloyd Thompson Group PLC (LSE:JLT).


    IVA International was established in 2008 by International Value Advisers and is managed by Charles de Lardemelle and Charles de Vaulx (Trades, Portfolio). The fund seeks long-term growth of capital and invests in a variety of securities and asset classes from markets around the world. The fund utilizes in-house, fundamental research conducted by analysts to aid in their decision-making process.

      


  • Charles de Vaulx Hikes Stake in Hyundai Motors

    Morocco native Charles de Vaulx (Trades, Portfolio) more than tripled his stake in Hyundai Motor Co. (XKRX:005380) during the second quarter.


    De Vaulx is the portfolio manager of the IVA Worldwide Fund, which focuses on long-term growth of capital through investing in a range of securities and asset classes from markets around the world. In the second quarter de Vaulx added 283,248 shares of Hyundai at an average price of 141,280 South Korean won ($126.16) per share.

      


  • Charles de Vaulx Invests in 5 New Holdings in 2nd Quarter

    Charles de Vaulx (Trades, Portfolio), chief investment officer and portfolio manager at International Value Advisers, added five new holdings to the portfolio in the second quarter.


    The guru acquired an 844,953-share holding in American Express (NYSE:AXP), a financial services company based in New York City, for an average price of $63.32 per share. The deal had a 1.16% impact on the portfolio.

      


  • Value Screeners Identify Opportunities

    Several companies made multiple GuruFocus value screeners as of Aug. 2.


    In addition to identifying the best stocks in which to invest, the value screeners provide insight in which sectors have high value potential in the short term. Based on the stocks that made the screeners, retail and industrial companies offer good investing opportunities.

      


  • IVA Worldwide Fund 2nd Quarter Commentary

    The IVA Worldwide Fund Class A (NAV) (“the Fund”) ended the quarter on June 30, 2016 with a return of 0.91% versus the MSCI All Country World Index (“Index”) return of 0.99% bringing YTD performance to 1.90% versus the Index return of 1.23% for the same period.


    The majority of the second quarter was uneventful. And then Brexit happened. Although the possibility of the UK voting to Leave the EU had been on investors’ minds for months, most everyone was surprised by the final result on June 24th. Markets recoiled, the Pound plummeted, and the currency safe havens of the USD and JPY leapt. It became clear that markets never truly believed the UK would Leave and that the possibility wasn’t adequately priced in. Brexit brings along with it a multitude of financial and political uncertainties and it is unclear at this time what the ultimate global consequences will be. What is clear, yet again, is that attempting to forecast market events can be both futile and dangerous. At IVA we continue to focus on valuations, worst case scenarios, and their impact on our portfolio. This has helped us minimize drawdowns through many storms, most recently the market’s reaction to Brexit. We believe our portfolio is well positioned as we grapple with post-Brexit unknowns on top of other risks we see, including large credit excesses in China and prolonged Central Bank manipulations. We remain cautious, requiring risk premiums that accurately reflect the current treacherous investment environment.

      


  • Charles De Vaulx Comments on DeVry

    As for DeVry (NYSE:DV) (which only the Worldwide Fund owns), our intrinsic value estimate was impaired as we underestimated the extent of the decline of the BTM (Business, Technology, Management) segment. We note, however, that the overwhelming majority of DeVry’s profits come from its healthcare schools (Nursing, Veterinary, and Physicians) where student loan defaults have been negligible.

      


  • Charles De Vaulx Comments on News Corp

    News Corp. (NASDAQ:NWSA)’s value has been impaired by a continued difficult environment for their newspapers, a weaker Australian dollar and the expensive acquisitions of Move Inc. and iProperty Group Ltd. A substantial part of News Corp.’s value though resides in their ownership of a stake in REA Group Ltd, a dominant and highly profitable real estate portal in Australia.

      


  • Charles De Vaulx Comments on Astellas Pharma Inc.

    Finally, a word on Astellas Pharma Inc. (TSE:4503), owned by both Funds. Astellas is the perfect antithesis of Valeant: Astellas spends substantial amounts on R&D (around 17% of revenues) and develops life-saving drugs, recently in oncology with Xtandi (treatment of prostate cancer); has no financial leverage; does not engage in price gouging; has a strong pipeline and conservative accounting; allocates capital well; pays dividends; buys back shares at reasonable prices whilst maintaining a substantial net cash position: exercises restraint in compensation of senior executives; is not promotional; and trades at a single digit multiple of earnings before interest, amortization and taxes. One risk, however, is that high healthcare costs in the U.S. lead to greater regulation of drug prices in the U.S. Such a development would be a negative for Astellas. We believe that risk is more than priced in at the current stock price.

      


  • Charles de Vaulx's Annual IVA Funds Letter from the Portfolio Managers

    May 4, 2016

      


  • Charles de Vaulx Buys 2 Discount Stocks

    Charles de Vaulx (Trades, Portfolio) (Trades, Portfolio), portfolio manager of the International Valuations Advisors (IVA) Fund, invested in two major stocks May 31: Bank of America Corp. (NYSE:BAC) and Hyundai Motor Co. (XKRX: 005380).


    The manager of Sofire Fund Ltd., which won “Fund of the Year” in the global equity category in 2005 and in 2006, Charles de Vaulx (Trades, Portfolio), joined the IVA Fund in May 2008 as portfolio manager and chief information officer. According to his May 27, semiannual report, de Vaulx chooses stocks to buy using a “preservation of capital” approach: the manager targets company stocks that trade at “reasonable discounts” to the company’s intrinsic value at the time of investment. Additionally, de Vaulx prefers companies that have good balance sheets so the fund does not suffer in case the valuations are inaccurate.

      


  • Charles de Vaulx Answers the Question - Is Value Investing Still Relevant?

    Charles De Vaulx answered the question during the IVA Funds conference call on March 16. 


    Is value investing still relevant?

      


  • Charles de Vaulx Trims Stake in Japanese Energy Company

    Charles de Vaulx (Trades, Portfolio) of IVA Worldwide Fund made no new buys in the fourth quarter, but he made some noteworthy transactions in a variety of sectors.


    De Vaulx reduced his stake in Miura Co. Ltd. (TSE:6005), a Japanese energy company, by more than 66% with the sale of 3,795,800 shares for an average price of ¥1,560.12 ($13.70 in American currency) per share. The transaction had a -0.94% impact on de Vaulx’s portfolio.

      


  • IVA Worldwide Fund Quarterly Review - Fourth Quarter 2015

    The IVA Worldwide Fund Class A (NAV) (“the Fund”) ended the quarter on December 31, 2015 with a return of 1.00% versus the MSCI All Country World Index (“Index”) return of 5.03% bringing YTD performance to -2.47% versus the Index return of -2.36% for the same period.


    Despite bouts of volatility, global equity markets showed resilience in the fourth quarter, recovering from the very difficult previous two months. Concerns over China’s growth, which triggered the third quarter’s sell-off, were somewhat alleviated and there was a positive reaction to further monetary stimulus by China’s Central Bank at the end of October. The European Central Bank also continued to loosen monetary policy at the beginning of December, although the stimulus measures fell short of market expectations. Diverging from other global central banks, the U.S. Federal Reserve raised the benchmark interest rate by 0.25 percentage points in December. This move was largely anticipated and was well received. The price of Brent crude oil continued to drop over the quarter, hitting lows not seen in over a decade, and the broader commodities market also remained weak. Cracks in high yield deepened, as spreads widened across the market. We believe that the distress seen in this market is indicative of broader global economic problems that are not being fully incorporated by equity markets. While we are concerned by this deviation, we are also intrigued by the opportunities this environment is beginning to present in the high yield space.

      


  • IVA Funds: Do Low Rates Truly Justify Higher Valuations?

    Since the financial crisis, Central Banks around the world have launched various forms of “Quantitative Easing,” driving interest rates in developed countries to ultra-low levels, manipulating currencies worldwide and injecting massive amounts of liquidity. The growth in popularity of the “Fed Model” (a valuation model which compares the yield on 10 year Treasury bonds to the stock market’s earnings yield) over the past 30 years has led some investors to justify using higher market multiples to price securities, bidding up the price of many stocks. Some believe that even if stocks do manage to deliver returns of 3% to 5%, that would be better than holding cash which offers a negative yield after inflation. The argument that higher valuations are justifiable and that equity markets will be OK as long as rates stay low is at best a relative argument and at worst a dangerous one. We think better questions to consider are: Why are interest rates so low? Why do so many Central Banks around the world practice “Quantitative Easing” and “Financial Repression”? We believe that low rates today are symptomatic of a world where economic and financial imbalances may be bigger than ever.

      


  • United Technologies and IBM Have New Positions in James Barrow's Portfolio

    James Barrow (Trades, Portfolio) is executive director of Dallas-based investment firm Barrow Hanley Mewhinney & Strauss, the lead portfolio manager for the Vanguard Windsor II and Selected Value Funds. Barrow Hanley currently serves as a sub-adviser to more than 45 equity and fixed income mutual funds.


    During the third quarter 26 stocks got new positions in Barrow’s portfolio, and here are his most weighted new buys.

      


  • Charles de Vaulx Acquires Stake in Emerson Electric

    Charles de Vaulx (Trades, Portfolio) of IVA Worldwide Fund looks for at least one of these characteristics – financial strength, temporarily depressed earnings or entrenched franchises – when he looks for investment opportunities. He follows the principles of Benjamin Graham and Warren Buffett (Trades, Portfolio); however, whereas Buffett’s approach is to invest in American companies, de Vaulx takes a more global posture, and his third-quarter transactions reflect that.


    The guru’s most noteworthy third-quarter transaction was his purchase of a 1,674,401-share stake in Emerson Electric Co. (NYSE:EMR), a Ferguson, Missouri-based electrical equipment company, for an average price of $49.17 per share. The deal had a 1.58% impact on de Vaulx’s portfolio.

      


  • Charles de Vaulx's IVA Funds Portfolio Manager Newsletter

    Dear Shareholder,


    Over the period under review October 1, 2014 to September 30, 2015, your Funds delivered slightly negative absolute returns (-4.21% for the IVA Worldwide Class A and -2.37% for the IVA International Class A), albeit ahead of their respective benchmarks (-6.66% for the MSCI All Country World Index and -12.16% for the MSCI All Country World [ex-US] Index).

      


  • Charles De Vaulx's IVA International Fund Q3 2015 Review

    The IVA International Fund (Trades, Portfolio) Class A (NAV) (“the Fund”) ended the quarter on September 30, 2015 with a return of -5.15% versus the MSCI All Country World ex US Index (“Index”) return of-12.17% bringing YTD performance to -0.18% versus the Index return of -8.63% for the same period.

    The third quarter was marred by swings in global markets as investors became increasingly concerned by the prospect of a slowdown in China and the impact it would have on the rest of the world. These concerns spiked mid-August after China’s central bank devalued the yuan, triggering a market sell-off that was most damaging to commodities and emerging markets. In September, citing recent market turmoil and an uncertain global growth outlook, the U.S. Federal Reserve held interest rates at record lows. Carnage in various commodities - oil, copper, iron ore, platinum and also in many soft commodities continued throughout the quarter. Equities and bonds in emerging markets were also hit hard and many currencies of emerging countries fell precipitously, including the Brazilian real, the Indonesian rupiah and the Malaysian ringgit. We believe that emerging markets are going through a bust after years of capital misallocation in China, coupled with unbridled credit growth. All of these developments highlight the continued importance of investing with caution and discipline.  


  • Charles De Vaulx's Q3 2015 IVA Worldwide Fund Commentary

    The IVA Worldwide Fund Class A (NAV) (“the Fund”) ended the quarter on September 30, 2015 with a return of -3.98% versus the MSCI All Country World Index (“Index”) return of -9.45% bringing YTD performance to -3.43% versus the Index return of -7.04% for the same period.


    The third quarter was marred by swings in global markets as investors became increasingly concerned by the prospect of a slowdown in China and the impact it would have on the rest of the world. These concerns spiked mid-August after China’s central bank devalued the yuan, triggering a market sell-off that was most damaging to commodities and emerging markets. In September, citing recent market turmoil and an uncertain global growth outlook, the U.S. Federal Reserve held interest rates at record lows. Carnage in various commodities - oil, copper, iron ore, platinum and also in many soft commodities continued throughout the quarter. Equities and bonds in emerging markets were also hit hard and many currencies of emerging countries fell precipitously, including the Brazilian real, the Indonesian rupiah and the Malaysian ringgit. We believe that emerging markets are going through a bust after years of capital misallocation in China, coupled with unbridled credit growth. All of these developments highlight the continued importance of investing with caution and discipline.

      


  • Charles de Vaulx's Stocks Trading with Low P/E

    Charles de Vaulx (Trades, Portfolio) is the chief investment officer and portfolio manager at International Value Advisers, LLC (IVA). He joined the firm in May 2008. Until March 2007, de Vaulx was portfolio manager of the First Eagle Global, Overseas, U.S. Value, Gold and Variable Funds, together with a number of separately managed institutional accounts.


    De Vaulx employs a value oriented approach and will seek investments in companies of any size that typically have one or more of the following characteristics: financial strength, temporarily depressed earnings or entrenched franchises. However, the overriding attribute of such companies is that their securities offer fundamental value. He is a global investor as most of his portfolio is invested in international companies.

      


  • IVA Worldwide Fund Q2 2015 Commentary

    The IVA Worldwide Fund Class A (NAV) (“the Fund”) ended the quarter on June 30, 2015 with a return of -0.90% versus the MSCI All Country World Index (“Index”) return of 0.35%, bringing YTD performance to 0.57% versus the Index return of 2.66% for the same period.


    The quarter was marked by bouts of volatility in global markets caused by political uncertainty in Greece, anxiousness over future interest rate increases in the U.S. and turbulence in the Chinese stock market. We continue to see stretched market valuations globally, driven by ultra-low interest rates as investors focus more on relatives than fundamentals in their search for yield. As bottom-up, fundamental investors, it remains difficult for us to find quality opportunities in this environment.

      


  • Charles de Vaulx Sells Portions of Three of His Most Valuable Stakes

    French-born asset manager Charles de Vaulx (Trades, Portfolio), partner, chief investment officer and co-portfolio manager at International Value Advisers, looks for many qualities in potential investments, but the most important is fundamental value. International Value Advisers’ record has been pretty good in recent years in spite of a certain amount of volatility in the market. IVA returned 3.2% last year, nearly 17% the year before and 6.63% in 2012.


    De Vaulx left most of the 12 most valuable stakes in his portfolio untouched during the first quarter. His top two holdings – Astellas Pharma Inc (TSE:4503) and Berkshire Hathaway Inc (NYSE:BRK.A) – haven’t been touched since 2014. Neither, for that matter, have his fourth- and fifth-most valuable stakes – Oracle Corporation (NYSE:ORCL) and Samsung Electronics Co Ltd (XKRX:005930).

      


  • Charles De Vaulx On The Absurdity Of Negative Interest Rates



  • Charles de Vaulx's IVA Funds Newsletter May 2015

    Dear Shareholder:

      


  • Charles de Vaulx Comments on DeVry Education Group Inc

    Conversely, one area that hurt us this quarter was our U.S. stocks. They averaged a return of -1.6%, compared to those in the benchmark which averaged a gain of 1.2%, and detracted -0.4% from our return led by poor performance from DeVry Education Group Inc. (DV), a for-profit higher education company in the consumer discretionary sector. We believe this company is suffering unfairly from issues plaguing its competitors and we think many investors fail to recognize the quality of DeVry’s medical and nursing schools, thus we took advantage of the share price weakness to add to our position.

    From Charles de Vaulx (Trades, Portfolio)’ IVA Worldwide Fund Q1 2015 Review.  


  • Charles de Vaulx’ IVA Worldwide Fund Q1 2015 Review

    The IVA Worldwide Fund Class A (NAV) (“the Fund”) ended the quarter on March 31, 2015 with a return of 1.49% versus the MSCI All Country World Index (“Index”) return of 2.31%. Since inception on October 1, 2008, on an annualized basis, the Fund returned 10.32% versus the Index return of 8.09% for the same period.


    Global equity markets delivered a moderate gain this quarter despite some big market developments. In January, the Swiss Central Bank announced they would abolish its peg between the Swiss franc and the euro, which resulted in the Swiss franc appreciating significantly against the euro. Additionally, the European Central Bank announced they would launch a quantitative easing program in March in order to boost the region’s inflation rate. This resulted in the euro falling significantly against the U.S. dollar, at one point to a 12 year low. Lastly, the World Bank cut its forecast for global growth in January, warning that the world economy remained overly reliant on the U.S. recovery.

      


  • IVA International Fund Adds Four Positions to Portfolio

    IVA International Fund (Trades, Portfolio) added four new positions to its portfolio during the fourth quarter of 2014. The Chief Investment Officer of the firm is guru Charles de Vaulx (Trades, Portfolio).


    There are currently 92 stocks in the portfolio, valued at $2.04 million with a quarter over quarter turnover of 9%.

      


  • Charles de Vaulx Adds Four New Positions to Portfolio

    Charles de Vaulx (Trades, Portfolio) of IVA Worldwide Fund added four new positions to his portfolio, which includes 90 stocks and has a quarter over quarter turnover of 10%.


    IVA Worldwide invests in stocks believed to be at a discounted price, in relation to the intrinsic value estimate. The firm's definition of intrinsic value is "the amount that a knowledgeable investor or corporate competitor would pay - in cash - for 100% of the economic and controlling interests of a company.”

      


  • Charles de Vaulx Buys 4 New International Stocks in Fourth Quarter

    Renowned global investor Charles de Vaulx manages the IVA Worldwide Fund and purchased four new stocks for it in the fourth quarter.


    ‘The high-priced environment of the past year has rendered it difficult for de Vaulx to find low-priced stocks, and he placed the fund’s cash exposure at 35.8%. In his fourth quarter letter, de Vaulx said:

      


  • Charles de Vaulx Purchases 4 New Holdings in Q4

    Charles de Vaulx (Trades, Portfolio) joined International Value Advisers in 2008 and serves as chief investment officer and portfolio manager. Prior to IVA, he was the portfolio manager of the First Eagle Global, Overseas, U.S. Value, Gold, and Variable Funds.

    In 2001, de Vaulx and his co-manager were named Morningstar’s International Stock Manager of the Year.  


  • Three Gurus Invest in Chilean Conglomerate in Fourth Quarter

    Three gurus have made large investments recently in Antofagasta PLC (ANTO.UK). Antofagasta may not be a household word in America, but it is one of the most important conglomerates in Chile. It has offices in London as well as Chile and is listed on the London Stock Exchange, where it is the 33rd-largest company.


    Antofagasta is one of the world’s leading copper producers, operating four copper mines in Chile, which has a rich deposit of copper in its northern desert. It also operates an extensive railroad network, and it is involved in banking and regional water distribution among other things. Nearly two-thirds of the company is owned by Chile’s prominent Luksic family.

      


  • Charles De Vaulx IVA Worldwide Fund - 2014 Year In Review



  • International Value Advisers Funds 2014 Annual Commentary

    Global equity markets delivered solid returns again for this fiscal year ending September 30, 2014 with the S&P 500 Index hitting a record high close on September 18, 2014, but it wasn’t a smooth ride. Global equity markets experienced significant volatility from late January 2014 to early February 2014, from late July 2014 to early August 2014, and for most of September 2014. In December 2013, the Federal Reserve announced they would begin tapering their quantitative easing program in early 2014 with it ending later that year despite continued slow economic growth. Towards the end of the fiscal year, equity markets fell as they digested the possibility of the Federal Reserve raising rates earlier than expected and the outlook for the global economy darkened with growth in Europe and China slowing. Additionally, the U.S. dollar strengthened significantly against most major currencies and crude oil fell sharply in the third quarter 2014.


    Over the fiscal period, our equity exposure was relatively unchanged in the Worldwide Fund, 51.9% on September 30, 2014 versus 52.8% on September 30, 2013, while it increased in the International Fund, to 60.0% from 54.3%, respectively, as we found some new opportunities, specifically Henderson Land Development Co. Ltd. (HKSE:00012) (financials, Hong Kong) and APT Satellite Holdings Limited (HKSE:01045) (telecommunications, Hong Kong), and added to some existing positions, such as Hongkong & Shanghai Hotels Ltd. (HKSE:00045) (consumer discretionary, Hong Kong) and Springland International Holdings Ltd. (HKSE:01700) (consumer discretionary, China). Thus, our exposure to China (through Hong Kong listed equities) and Hong Kong rose to 7.2% from 3.4% this fiscal year in the International Fund.

      


  • IVA Worldwide Fund 2014 Annual Commentary

    IVA Worldwide Fund


    The IVA Worldwide Fund Class A, at net asset value, returned 8.00% over the one year period ending September 30, 2014 compared to the MSCI All Country World Index (Net)* (the “Index”) return of 11.32% over the same period.

      


  • Charles de Vaulx's Worldwide Fund Buys 3 New Stocks in Q3

    Charles de Vaulx (Trades, Portfolio)’s Worldwide Fund beat its benchmark for the first three quarters of the year, returning 4.04% compared to 3.73% for the MSCI All Country World Index. He initiated three new positions when market volatility allowed him to purchase at discounts to his estimates of intrinsic value. In his third quarter letter, de Vaulx said of the current market:  


  • Charles de Vaulx’s IVA Worldwide Fund Q3 2014 Review

    The IVA Worldwide Fund Class A (NAV) (“the Fund”) ended the quarter on September 30, 2014 with a return of -1.23% versus the MSCI All Country World Index (“Index”) return of -2.31%. This brings our year-to-date return to 4.04% versus the Index return of 3.73% for the same period.


    Global equity markets were volatile this quarter, falling from late July to early August and again in September, as the Federal Reserve prepares to end its quantitative easing program and markets digest the possibility of them raising rates earlier than expected as the U.S. economy slowly improves. Also, a few economic indicators released this quarter signaled growth in China is slowing which rattled markets.

      


  • Charles de Vaulx's IVA Worldwide Fund Third Quarter 2014 Review

    The IVA Worldwide Fund Class A (NAV) (“the Fund”) ended the quarter on September 30, 2014 with a return of -1.23% versus the MSCI All Country World Index (“Index”) return of -2.31%. This brings our year-to-date return to 4.04% versus the Index return of 3.73% for the same period.


    Global equity markets were volatile this quarter, falling from late July to early August and again in September, as the Federal Reserve prepares to end its quantitative easing program and markets digest the possibility of them raising rates earlier than expected as the U.S. economy slowly improves. Also, a few economic indicators released this quarter signaled growth in China is slowing which rattled markets.

      


  • IVA International Fund Q3 2014 Commentary

    The IVA International Fund (Trades, Portfolio) Class A (NAV) (“the Fund”) ended the quarter on September 30, 2014 with a return of -1.00% versus the MSCI All Country World Index (ex-U.S.)(“Index”) return of -5.27%. This brings our year-to-date return to 3.42% versus the Index return of 0.00% for the same period.

    Global equity markets were volatile this quarter, falling late July to early August and again in September, as the Federal Reserve prepares to end its quantitative easing program and markets digest the possibility of them raising rates earlier than expected as the U.S. economy slowly improves. Also, a few economic indicators released this quarter signaled growth in China is slowing which rattled markets.  


  • Charles de Vaulx's IVA Funds Newsletter

    Warren Buffett (Trades, Portfolio) surprised active managers, especially value investors, when he disclosed a feature of his will in his 2013 shareholder letter: Buffett instructed the trustee for his wife’s cash to put 10% of it in short-term government bonds and 90% in a very low-cost S&P 500 Index Fund. He believes the trust’s long-term results from this policy will be superior to those attained by most investors – pension funds, institutions, or individuals – who employ high-fee managers. This is a very different recommendation from his seminal Superinvestors of Graham-and-Doddsville speech in which he illustrated how active, value managers can do far better than indexes over time.

    In today’s era of “quantitative easing” – massive liquidity injections and a zero interest rate policy, which had a strong positive effect on asset prices – we continue to see money pouring into equity funds, especially index funds (usually a mutual fund or exchange traded fund) as investors chase returns and can’t bear sitting on cash yielding zero and losing purchasing power every day. Yet what will happen when the Federal Reserve raises interest rates, corporate profit margins decline, or markets start exhibiting more volatility? Is a fully invested index fund really the right place to be? At IVA, we believe some active managers, especially some value investors, can still beat a benchmark over the long-term, with the trick being: pick the right asset manager.  


  • Charles de Vaulx's IVA International Fund Q2 2014 Review

    The IVA International Fund (Trades, Portfolio) Class A (NAV) (“the Fund”) ended the quarter on June 30, 2014 with a return of 2.50% compared to the MSCI All Country World Index (ex-U.S.) (“Index”) return of 5.03%. This brings our year-to-date return to 4.46% versus the Index return of 5.56% for the same period.

    Global equity markets continued to move higher this period with the S&P 500 Index reaching a record high close in mid-June despite a still murky economic picture. Towards the end of the quarter, it was announced that U.S. GDP growth fell -2.9% in the first quarter of 2014 and the Bank for International Settlements (BIS) warned in its annual report published in June that “buoyant financial markets are out of sync with the shaky global economic and geopolitical outlook.”  


  • “Patience is a necessary virtue for value investors” – A Look into the International Value Investor Charles de Vaulx

    “Patience is a necessary virtue for value investors; patience to see the market recognize some value it was previously ignoring; or, more to the case now, patience to wait for the fat pitch, free of the short-term vagaries of benchmarks.”


    -Charles de Vaulx (Trades, Portfolio)

      


  • Charles de Vaulx's 2 New Stocks Found in India and Japan

    Charles de Vaulx (Trades, Portfolio)’s IVA Funds was only 55% invested in equities on average from Oct. 1, 2013 to March 31, 2014, to protect against risk in light of soaring valuations spurred by quantitative easing and low interest rates. Fund managers have sought out for investments well-capitalized companies with healthy balance sheets to see them through turns in business or recessions. In his semi-annual letter, de Vaulx said:

    “Smart, shareholder friendly managements, coupled with good businesses (moderate to high organic top line growth over the economic cycle, high barriers to entry, high returns on capital employed, low to reasonable capital intensity, some inflation protection or ability to raise prices, little to no political interference) could provide reasonable, but not stellar, returns in the years to come, given the prices these companies trade at. With high cash levels in both Funds, we have plenty of ammunition to buy more of these companies if their share prices fall, and are prepared, with the help of our ten talented analysts, to seize upon similar investment opportunities when they present themselves.”  


  • Charles de Vaulx's Semi-Annual IVA Funds Letter from the Portfolio Managers

    April 30, 2014


    Dear Shareholder,

      


  • IVA International's Charles De Vaulx Reports His Year End Top Stocks

    Charles De Vaulx of the IVA Funds reported his third quarter holdings this past week. In October the IVA Funds celebrated their fifth year in the business. The fund maintains a dual investment approach which is split into short- and long-term investments. IVA reports that their short-term (12 to 18 months) investments are in order to preserve capital while their longer term (5 to 10 years) they try to perform better that their equity benchmark. The fund also reported that over the past five years, they achieved both of these goals with their investments.


    Over the past quarter Charles De Vaulx in his IVA Worldwide Fund bought nine new stocks bringing the total number of stocks to 102 valued at $5.064 billion. The following five companies are De Vaulx’s largest holdings as of the close of the fourth quarter.

      


  • Charles De Vaulx IVA Worldwide Fund Quarterly Review - Fourth Quarter 2013

    The IVA Worldwide Fund Class A (NAV) ended the quarter on December 31, 2013 with a return of 3.80% compared to the MSCI All Country World Index ("Index") return of 7.31%. This brings our year-to-date return to 16.93% versus the Index return of 22.80% for the same period. We witnessed another quarter of equity markets trending higher, despite news that the Federal Reserve would begin to taper its bond buying program in 2014 and despite unremarkable economic growth around the world. We found a few opportunities this quarter in what we view as reasonably priced U.S. and European stocks, which helped to offset some trimming in equities that we believe are close to full valuation. Therefore our equity exposure was unchanged over the period at 52.8%.


    Our underperformance this quarter versus the benchmark was due to our multi-asset class approach with our cash exposure (31.7% at quarter-end) being the largest detractor from relative results. While we believe our exposure to gold bullion (3.0% at quarter-end) is a good hedge against currency debasement in our portfolio, especially with our cautious positioning and cash allocation, it was one of the largest detractors from our return this period as it averaged a return of -9.3% and detracted -0.3% from our performance. Even though our corporate bonds performed well on an absolute basis, averaging a gain of 4.0% led by a few euro denominated bonds, they were among our detractors from relative results along with our sovereign bonds, which averaged a return of -0.4%. Collectively, fixed income added about 0.3% to our return this period, with our corporate bonds representing 6.8% of the portfolio and our sovereign bonds comprising 5.7% of the portfolio at quarter-end. Even though it was our exposure to cash, gold and fixed income that led to our underperformance this quarter in rising markets, it is these assets that we believe help protect the portfolio in down markets and help mitigate overall portfolio volatility.

      


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