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Ruane Cunniff's Sequoia Fund's 3rd-Quarter Letter to Shareholders

Discussion of performance and holdings

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Sydnee Gatewood
Oct 09, 2019
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Dear Sequoia Shareholders and Clients:

For the third quarter of 2019, Sequoia Fund generated a total return of 0.71%1, net of fees, versus a 1.70% return for the Standard & Poor’s 500 Index. For the year-to-date through September 30, 2019, the Fund generated a 21.85% total return versus 20.55% for the Index.

During the quarter we trimmed the Fund’s stakes in Constellation Software (

TSX:CSU, Financial) and Mastercard (MA, Financial) and added to our holdings in Rolls Royce (LSE:RR., Financial). We also initiated a new position in Wayfair (W, Financial), an online retailer about which we will have more to say in our year-end letter.

Fund shareholders may have noticed the move to Digital Investor, DST’s new user-friendly technology powering online account access. Digital Investor offers a flexible and secure self-service website experience that will, among other things, allow you to update bank account information, make distributions from an IRA and manage account beneficiaries. If you haven’t had a chance to set up online access, we encourage you to do so by clicking on the “access your account” button on www.sequoiafund.com.

We’re happy to report that the debut of Digital Investor concludes our extensive, multi-year modernization project. We are committed to holding our operational practices to the same high standards by which we judge ourselves as investors. As a result, we will continue to make modifications over time to better serve our clients and shareholders, but we expect that these regular improvements will happen largely behind the scenes. We realize that many of the changes we made over the last couple years involved significant inconvenience, and we greatly appreciate the patience of our clients and shareholders during the “heavy lifting” phase of our modernization journey. Thanks to your support, we believe the Firm’s operations have never been stronger.

Sincerely,

The

Ruane Cunniff (Trades, Portfolio) Investment Committee

Arman Gokgol-Kline John B. Harris Trevor Magyar D. Chase Sheridan

1The 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 September 30, 2019 were 6.49%, 5.69% and 10.85%, respectively. Current performance may be lower or higher than the performance data quoted.

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