On August 31, 2019, the Fund celebrated its 10th year in operation. We thank you for your steadfast partnership over the past decade.
The Fund’s 2019 third quarter performance for the Institutional share class was +3.39% compared with S&P 500 Total Return at +1.70%. Year-to-date performance for the Institutional share class was +30.84% through September 30 compared with +20.55% for the S&P 500 Total Return. For the trailing twelve months ending September 30, 2019, performance for the Institutional share class was +20.02% compared with S&P 500 Total Return at +4.25%.
Our top five performance contributors during the quarter were American Tower, Moody’s, O’Reilly, SBA Communications, and Markel Corp. Not much new to report on these businesses.
The largest five detractors from performance this quarter were Ubiquiti, Roper Technologies, Visa, Alarm.com, and TD Ameritrade.
In last quarter’s commentary, we discussed our growing cash position with net inflows being the primary source. Cash continued to increase during the quarter, moving from 15.9% at the end of the second quarter to 18.8% at the end of the third. We fully exited a few smaller positions during the third quarter, thereby adding to cash and reducing the number of equity positions in the portfolio. We also increased our position in a couple of existing names and initiated a new position during the quarter, but buying activity remains muted as of this writing.
We have no opinion on general market direction, but our cash position continues to reflect a view that better buying opportunities may present themselves at some point. Our pipeline of new ideas is as robust as ever, but high valuations make it difficult to put substantial cash to work, in either new or existing names, if achieving above-average long-term returns is the priority.
Chuck & John