April 10, 2023
Dear Sequoia Fund shareholders:
For the first quarter of 2023, Sequoia Fund generated a total return of 5.93%1 net of fees, versus 7.50% for the Standard and Poor’s 500 Index.
During the quarter we trimmed our holdings in Constellation Software (TSX:CSU, Financial), Liberty Media and Meta Platforms (META, Financial). Early in the year, we also initiated what proved a very short-lived investment in Bank of America (BAC, Financial). Our thesis was premised on the belief that radical changes in both regulation and industry behavior following the Global Financial Crisis in 2008-09 had turned banking into a fundamentally safer business, and one that was on the verge of an earnings renaissance as America exited an unusual decade-plus of near-zero interest rates. The remarkable banking panic that unfolded soon after we invested quickly called our thesis into question, and in response to a major change in the facts, we changed our minds. Though obviously frustrating, we view the modest loss we ultimately realized in the face of an extremely negative turn of events as evidence of a sound process that produced an investment protected by an ample margin of safety.
We discuss this quarter’s activity in more detail in our Q1 video commentary, available this week on our website.
Our annual Investor Day will take place at The Times Center in New York on Thursday, May 18, 2023 at 10am. Clients who prefer to attend virtually may join via live webcast. You can find further details and also register on our website at www.ruanecunniff.com/events. We look forward to seeing many of you in person.
Sincerely,
The Ruane Cunniff (Trades, Portfolio) Investment Committee
Arman Gokgol-Kline
John Harris
Trevor Magyar
D. Chase Sheridan
The performance data for the Fund shown above represents past performance and assumes reinvestment of dividends. Past performance does not guarantee future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The Fund’s 1- year, 5-year and 10-year average annual total returns through March 31, 2023 were -15.81%, 7.18% and 6.85%, respectively. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end can be obtained by calling SS&C GIDS, Inc. at (800) 686-6884.
