IVA Worldwide Fund
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Quarterly Review - First Quarter 2019Share this page Download PDF
The IVA Worldwide Fund Class A (NAV) ended the quarter on March 31, 2019 with a return of 6.23% versus the MSCI All Country World Index (Net)(“Index”) return of 12.18% for the same period.
After a tumultuous close to 2018, the new year brought with it a new wave of optimism which resulted in global markets registering their best quarter in nearly a decade. In many ways, the weakness toward the end of last year set the stage for the robust recovery so far in 2019. Despite signs of weakness in global economic growth and low inflation, the clouds that hung over the markets began to clear as the Fed switched gears becoming more dovish and trade tensions between the U.S. and China began to ease. Notwithstanding the current “Goldilocks on Ice” environment, we remain cautious as ever as valuations remain stretched. The U.S. economy is in its 10th year of expansion, the second longest on record, and is finally showing some cracks including the recent yield curve inversion. We also remain cognizant of a number of risks and imbalances: growing government debt around the world, corporate credit excesses as a result of massive share buybacks in the U.S., dwindling liquidity, and continued geopolitical concerns.
Despite a strong start earlier in the quarter, our equities failed to keep pace with the Index and returned 9.4%. March proved to be a difficult month, particularly for value investors, as markets were again being led by more tech-heavy growth names. Our stock performance for the quarter was more on par with the MSCI All Country World Value (Net) Index which returned 9.9% for the quarter. By sector, industrials was the top contributor adding 1.4%. Technology was the second largest contributor adding 1.1%; however, our lower exposure compared to the Index hurt our relative results. The only sector with negative performance for the quarter was holding company, detracting -0.04%, as one of our top ten holdings, Berkshire Hathaway, posted a loss. Communication services added the least to return with a contribution of 0.25%. Our best performance by country was the U.S. with a contribution of 2.2%, followed by France which contributed 0.8% and Japan adding 0.7%. Only three countries detracted from our return this quarter – Germany, South Africa and Uruguay together taking away -0.2%.
Our fixed income names were up 7.3% and contributed 0.2% for the quarter. Our exposure to high yield remains minimal at 2.2% coming down from 2.7% at year-end. Gold returned 0.8% and added 0.1% to performance for the quarter. Our gold exposure came down to 5.8% from 6.4%. We still prefer bullion to gold mining shares.
Our currency hedges added 0.1% to return. Our hedges remain relatively unchanged at: 41% Australian dollar, 10% euro, 23% Japanese yen and 40% Korean won.
Our equity exposure came up slightly from 60.6% to 61.1% at quarter-end. In January, we added to U.S. Financials and found a few new names over the quarter in France, Japan, and the U.S. However, as markets continued their upward trend we also trimmed names in healthcare, retail, consumer staples, real estate and technology. As a result, our cash exposure came up slightly from 30.4% to 30.9%.
On the recent IVA Funds Semi- Annual Update Call (as of March 21, 2019), Charles and Chuck discussed recent activity in the portfolio and gave a thorough analysis of several companies that we are invested in (BMW, Samsung Electronics and Grupo Mexico). They also explained why we remain cautiously positioned and why international value investing remains relevant in today’s environment. A full transcript of the call can be found on our website at www.ivafunds.com.
We appreciate your confidence and are very much grateful for your continued support.
Performance Information (as of March 31, 2019)
|Average Annual Total Returns|
|Class||3 Months||YTD||1 Year||5 Year||10 Year||Since
|A (with load)||-3.04%||2.99%||-3.43%||1.88%||6.43%||7.10%|
|MSCI All Country World Index (Net)||3.61%||16.23%||5.74%||6.16%||10.15%||7.74%|
**Inception date is 10/1/2008.
Past performance does not guarantee future results.
Maximum sales charge for the A shares is 5.00%. C shares include a 1% CDSC Fee for the first year only. The expense ratios for the fund are as follows: 1.25% (A Shares); 2.00% (C Shares); 1.00% (I Shares). Amounts redeemed within 30 days of purchase are subject to a 2.00% fee.
As of March 31, 2019, the IVA Worldwide Fund’s top 10 holdings were: Gold bullion (5.8%); Berkshire Hathaway, Inc. Class A; Class B (3.6%); Samsung Electronics Co., Ltd. (2.6%); Bank of America Corp. (2.6%); Bureau Veritas SA (2.5%); AIB Group PLC (2.4%); Sodexo SA (2.4%); Bayerische Motoren Werke AG (2.4%); Astellas Pharma, Inc. (2.4%); Nestle SA (2.3%).
MSCI All Country World Index (Net) is an unmanaged index consisting of 47 country indices comprised of 23 developed and 24 emerging market country indices and is calculated with dividends reinvested after deduction of withholding tax. The Index is a trademark of MSCI Inc. and is not available for direct investment.
The MSCI All Country World Value Index (Net) is an unmanaged index that captures securities exhibiting overall value style characteristics. It consists of 47 country indices comprised of 23 developed and 24 emerging market country indices and is calculated with dividends reinvested after deduction of withholding tax. The Index is a trademark of MSCI Inc. and is not available for direct investment.
The views expressed in this document reflect those of the portfolio manager(s) only through the end of the period as stated on the cover and do not necessarily represent the views of IVA or any other person in the IVA organization. Any such views are subject to change at any time based upon market or other conditions and IVA disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for an IVA fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any IVA fund. The securities mentioned are not necessarily holdings invested in by the portfolio manager(s) or IVA. References to specific company securities should not be construed as recommendations or investment advice.
An investor should read and consider the funds' investment objectives, risks, charges and expenses carefully before investing. This and other important information are detailed in our prospectus and summary prospectus, which can be obtained by calling 1-866-941-4482 or visiting www.ivafunds.com. Please read the prospectus and summary prospectus carefully before you invest. The IVA Funds are offered by IVA Funds Distributors, LLC.