The Akre Focus Fund Retail Shares (AKREX, Financial) and Institutional Shares (AKRIX, Financial) returned 11.57% and 11.63% net of fees and expenses, respectively in the first quarter of 2013 versus the S&P 500 with a return of 10.61%. Our positions in Dollar Tree (DLTR, Financial), MasterCard (MA, Financial), Markel (MKL, Financial) and TD Ameritrade (AMTD, Financial) were the largest contributors to performance over the quarter. Apple and Diploma were the most meaningful detractors from performance over the quarter. At the end of the first quarter we were 90.4% invested. The portfolio held 34 common stock positions and one convertible preferred position.
During the first quarter we purchased additional shares in both Moody's and Dollar Tree, and initiated a position in Colfax. Moody's has been under pressure recently due to a DOJ lawsuit against its competitor S&P that alleges fraud during lead up to the financial crisis. By inference, Moody's sold off, and we believed it an attractive valuation, given all that we understand about the issues. Likewise Dollar Tree reacted to concerns that the most challenged in our society would have less cash in their pockets, because of tax refund delays etc., thus hurting the dollar store theme. In the long term, it's all nonsense, and we similarly found the valuation attractive, so we added to positions.
Colfax, unlike nearly all of our other holdings, is comprised of a collection of manufacturing businesses. During the past year Colfax acquired a business which was several times its size, and is in the process of rationalizing it. The management, starting with the board chairman, are people we with whom we are familiar, and who have previously performed great work in this same process –that is acquiring underperforming manufacturing businesses and applying the Japanese "kaizen" or "continuous improvement" method of operations to it. The outcomes have in the past been truly outstanding, and we think there is great potential for a repeat!
We remain highly confident about the businesses owned in the portfolio. This strategy has worked well for us in the past.
Performance data quoted represents past performance; past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance of the fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling (877) 862-9556. The Fund's annual operating expense (gross) for the Retail Class shares is 1.40% and 1.15% for the Institutional Class shares. The Fund imposes a 1.00% redemption fee on shares held less than 30 days. Performance data does not reflect the redemption fee, and if reflected, total returns would be reduced.
As always we thank you for the trust you have placed with our firm, entrusting some portion of your assets with us to manage. Know that we treat each dollar as if it were our own, striving to achieve an above average return while seeking to incur a below average level of risk.
Chuck Akre
Mutual fund investing involves risk. Principal loss is possible. The Fund is non-diversified, meaning it may concentrate its assets in fewer individual holdings than a diversified fund. Therefore, the Fund is more exposed to individual stock volatility than a diversified fund. The Fund invests in small and medium capitalization companies, which involve additional risks such as limited liquidity and greater volatility than larger capitalization companies.
The Fund's investment objectives, risks, charges and expenses must be considered carefully before investing. The summary and statutory prospectus contains this and other important information about the investment company and it may be obtained by calling (877) 862-9556 or visiting www.akrefund.com. Read it carefully before investing.
Fund holdings and sector allocations are subject to change at any time and should not be considered a recommendation to buy or sell any security.
During the first quarter we purchased additional shares in both Moody's and Dollar Tree, and initiated a position in Colfax. Moody's has been under pressure recently due to a DOJ lawsuit against its competitor S&P that alleges fraud during lead up to the financial crisis. By inference, Moody's sold off, and we believed it an attractive valuation, given all that we understand about the issues. Likewise Dollar Tree reacted to concerns that the most challenged in our society would have less cash in their pockets, because of tax refund delays etc., thus hurting the dollar store theme. In the long term, it's all nonsense, and we similarly found the valuation attractive, so we added to positions.
Colfax, unlike nearly all of our other holdings, is comprised of a collection of manufacturing businesses. During the past year Colfax acquired a business which was several times its size, and is in the process of rationalizing it. The management, starting with the board chairman, are people we with whom we are familiar, and who have previously performed great work in this same process –that is acquiring underperforming manufacturing businesses and applying the Japanese "kaizen" or "continuous improvement" method of operations to it. The outcomes have in the past been truly outstanding, and we think there is great potential for a repeat!
We remain highly confident about the businesses owned in the portfolio. This strategy has worked well for us in the past.
Performance data quoted represents past performance; past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance of the fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling (877) 862-9556. The Fund's annual operating expense (gross) for the Retail Class shares is 1.40% and 1.15% for the Institutional Class shares. The Fund imposes a 1.00% redemption fee on shares held less than 30 days. Performance data does not reflect the redemption fee, and if reflected, total returns would be reduced.
As always we thank you for the trust you have placed with our firm, entrusting some portion of your assets with us to manage. Know that we treat each dollar as if it were our own, striving to achieve an above average return while seeking to incur a below average level of risk.
Chuck Akre
Mutual fund investing involves risk. Principal loss is possible. The Fund is non-diversified, meaning it may concentrate its assets in fewer individual holdings than a diversified fund. Therefore, the Fund is more exposed to individual stock volatility than a diversified fund. The Fund invests in small and medium capitalization companies, which involve additional risks such as limited liquidity and greater volatility than larger capitalization companies.
The Fund's investment objectives, risks, charges and expenses must be considered carefully before investing. The summary and statutory prospectus contains this and other important information about the investment company and it may be obtained by calling (877) 862-9556 or visiting www.akrefund.com. Read it carefully before investing.
Fund holdings and sector allocations are subject to change at any time and should not be considered a recommendation to buy or sell any security.
