IVA Funds Annual Report
The IVA International and Worldwide Fund have had great returns. Both fund hold high amounts of cash. The holdings are very diversified. The IVA International Fund (MUTF: IVIQX ) and the IVA Worldwide Fund (MUTF: IVWIX ) have come out with an Annual Report, which can be found here . Charles de Vaulx and Chuck de Lardamelle are two very well known value managers who run diversified portfolios with some stocks that you won’t see anywhere else. The Worldwide has averaged 9.03% (Institutional Class) since October 1, 2008, versus 6.03% for the MSCI All Country World Index. The International (Institutional Class) has averaged 9.00% over that time frame. Both very good returns. The Worldwide Fund has a broad portfolio including: 4.6% in gold, 3.5% in Berkshire Hathaway (NYSE: BRK.A ), and 3.3% in Astellas Pharmaceuticals ( OTCPK:ALPMY ). What is interesting is that the fund holds 35.2% in short term investments and 3.2% in sovereign bonds. So almost 40% in cash and over 5% in gold and gold mining. Looks to me like they’re pretty bearish on things. 22.9% of the portfolio is in the U.S., 6% France, and 7% Japan. According to the Annual Report: Our currency hedges helped to offset losses from the strong U.S. dollar, contributing 1.5% to return. At the end of the period, our currency hedges were 51% Japanese yen, 39% Australian dollar, 29% South Korean won, and 30% euro. What I love about these funds is that you just can’t find these stocks any place else. Who else owns Hong Kong & Shanghai Hotels ( OTCPK:HKSHY )? It’s a 50 cent dollar. It’s probably trading at half of net asset value. Who owns bonds in French conglomerate Wendel ( OTCPK:WNDLF )? Their holdings are off the wall and I love it! I don’t need active management to buy Coca-Cola (NYSE: KO ) and GE (NYSE: GE ). Why pay a high fee for glorified index funds. The International Fund has a similar make up to the Worldwide Fund. 35.2% are short term investments, 8.5% in fixed income, and 4.6% in gold. These are not your run of the mill mutual funds. These managers are allowed to invest as they feel. Some of the larger holdings are the same as noted above plus Nestle ( OTCPK:NSRGY ), Newscorp (NASDAQ: NWS ), and Samsung ( OTC:SSNLF ). International hedged its currencies as well which helped to mitigate the strong dollar. Barron’s wrote an article on the two funds. The article suggests that independent fund companies like IVA have lower fees and less conflicts of interest than funds owned by Wall Street banks. I tend to agree. Are these two managers going to jump ship for higher pay? Probably not as they most certainly have ownership in the firm. I suggest you go to the link and look at the Annual Report. There are so many names that you are probably not familiar with that you are bound to learn something. The Institutional Class’s expense ratio is 1% for each fund. I find that to be quite reasonable. de Vaulx and de Lardamelle have done a good job managing these funds. Putting together a portfolio like this is very difficult for the average person. You may be able to buy American blue chips but can you buy foreign bonds and then hedge the currencies? Probably not. Though the funds are closed to new investors, perhaps they will open again in the future. They are a good addition to a portfolio. Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.