Roger R. de Bree MANAGING DIRECTOR Andrew Ewert MANAGING DIRECTOR Frank H. Hawrylak, CFA MANAGING DIRECTOR Jay Hill, CFA MANAGING DIRECTOR Thomas H. Shrager MANAGING DIRECTOR John D. Spears MANAGING DIRECTOR Bob Wyckoff MANAGING DIRECTOR Highlights Tweedy, Browne reflects on 30 years of the Tweedy, Browne International Value Fund, shares how the story began, and explains why the fund is just as relevant in today’s market. On June 15th, our flagship fund, the Tweedy, Browne International Value Fund, celebrated its 30th anniversary. We established this Fund in the summer of 1993 with the aim of providing investors access to value-oriented equities outside of the United States. At the time, it was one of the few U.S.-based funds providing a value-oriented approach in international markets. It also had the distinguishing characteristic of hedging perceived foreign currency exposure back into the U.S. dollar where practicable. Our Approach We did not venture abroad looking for currency diversification but rather were attracted by what appeared, at the time, to be compelling non-U.S. equity valuations. Empirical studies showed you could hedge foreign currency exposure in developed markets at little cost to the investor regarding foregone returns. History has largely confirmed the findings of those studies, as the Fund’s hedged benchmark has actually outperformed its unhedged counterpart since TBGVX’s inception. Accolades Our Fund received a boost from Money Magazine in the fall of 1993 when Bill Sheeline, one of its lead writers, included the Fund in its Forecast Issue as one of the funds investors should consider in 1994. Carla Fried, another Money Magazine journalist, followed up in May of 1994, including TBGVX in her article entitled “The Next Great Funds” suggesting that the International Value Fund may be a logical successor to the Templeton Growth Fund, run by the legendary Sir John Templeton. Our Firm’s phones began to ring and, as they say, the rest is history. We had the incredible good fortune along the way to be covered by Morningstar, who nominated the International Value Fund’s portfolio management team for the coveted International Manager of the Year Award four separate times. The portfolio management team of the Fund won the award twice in two different decades. One of the very few investment teams to be awarded more than once.1 A Look at Performance We are proud of the Fund’s index-besting record since its inception in 1993. Over the last 30-plus years, the Fund produced cumulative returns net of fees nearly double those produced by its hedged benchmark, the MSCI EAFE Index (Hedged to USD) (1,013.51% v. 571.27%), almost triple those produced by the more commonly used MSCI EAFE Index (in USD) (1,013.51% v. 340.29%), and more than double the returns produced by the Foreign Stock Fund Average (1,013.51% v. 441.39%). The Fund has also been highly tax efficient since its inception, besting its benchmark index, the MSCI EAFE Index (Hedged to USD), as well as the unhedged MSCI EAFE Index, net of fees, and net of taxes on distributions and sale of Fund shares (7.03% v. 6.48% and 5.01%). It is tough enough to beat indexes net of fees, but to beat them net of fees and taxes on distributions and sale of Fund shares is, in our view, a more compelling measure of investment skill. Annual Total Returns for Periods Ending 09/30/2023 Total Annual Fund Operating Expense Ratios. As of 03/31/2023: 1.40% (gross), 1.40% (net) Source: After-tax returns are calculated using the historical highest individual federal marginal income tax rates, and do not reflect the impact of state and local taxes. Returns after taxes on distributions are adjusted for federal income taxes associated with fund distributions but do not reflect the federal income tax impact of gains or losses recognized when fund shares are sold. Returns after taxes on distributions and sale of fund shares are adjusted for federal income taxes associated with fund distributions and reflect the federal income tax impact of gains or losses recognized when fund shares are sold. Actual after-tax returns depend on an investor's tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. The performance shown, before and after taxes, represents past performance and is not a guarantee of future results. Looking Ahead The last decade-plus has proven to be a difficult period for non-U.S. equity returns. While investors in our Funds made solid absolute returns, they paled in comparison to the returns available in U.S. equities. The returns of the S&P 500® were more than double the returns produced by the MSCI EAFE Index (in USD) and our Funds. However, it’s important for investors to realize that historically the S&P 500 has not always outperformed the MSCI EAFE Index. A review of rolling 10-year returns for the S&P 500 and the MSCI EAFE Index back to the start of 1970 reveals that the MSCI EAFE Index outperformed the S&P 500 in roughly 44% of rolling 10-year periods.3 If the past is prologue, non-U.S. investors may be due for better returns. Non-U.S. equity valuations today remain compelling relative to their U.S. counterparts. We hope to take full advantage of what we view as an ongoing “sea change” in our capital markets and remain optimistic about our future and equity returns moving forward. LEARN MORE ABOUT TWEEDY, BROWNE
Tweedy, Browne Company Over 100 Years of Value Investing Learn more about Tweedy, Browne’s unique firm history and philosophy inspired by the work of Benjamin Graham, its success with value investing, and the Tweedy, Browne International Value Fund (TBGVX). Read Now
Advisor Insights Learned Lessons from Over a Century of Value Investing Bob Wyckoff from Tweedy, Browne Company draws on the wisdom of great investors over the last century as his company recently celebrated its 100th birthday. May 20, 2022 Read Now