Out of 109 five-year measurement periods, the International Equity Composite (Hedged to USD) has outperformed the MSCI EAFE Index (Hedged to USD) 65 times, or 60% of measured periods.
Out of 292 five-year measurement periods, the International Equity Composite (In USD) has outperformed the MSCI EAFE Index (In USD) 194 times, or 66% of measured periods.
The above chart illustrates the five-year average annual rolling net returns (calculated quarterly) for the International Equity Composite (Hedged to USD) (the ‘Composite’) since September 30, 1992, compared to the five-year average annual rolling returns for its benchmark, the MSCI EAFE Index (Hedged to USD) (the ‘Index’). The horizontal axis represents the returns for the Index, while the vertical axis represents the returns for the Composite. The diagonal axis is a line of demarcation separating periods of outperformance from periods of underperformance. Plot points above the diagonal axis are indicative of the Composite’s relative outperformance, while points below the diagonal axis are indicative of the Composite’s relative underperformance. Returns were plotted for three distinct equity market environments: a ‘down market’ (Index return was less than 0%); a ‘normal market’ (Index return was between 0% and 10%); and a ‘robust market’ (Index return was greater than 10%). There were 109 five-year average annual rolling return periods between September 30, 1992 and September 30, 2024. Past performance is no guarantee of future returns.
The above chart illustrates the five-year average annual rolling net returns (calculated monthly) for the International Equity Composite (In USD) (the ‘Composite’) since June 30, 1995, compared to the five-year average annual rolling returns for its benchmark, the MSCI EAFE Index (In USD) (the ‘Index’). The horizontal axis represents the returns for the Index, while the vertical axis represents the returns for the Composite. The diagonal axis is a line of demarcation separating periods of outperformance from periods of underperformance. Plot points above the diagonal axis are indicative of the Composite’s relative outperformance, while points below the diagonal axis are indicative of the Composite’s relative underperformance. Returns were plotted for three distinct equity market environments: a ‘down market’ (Index return was less than 0%); a ‘normal market’ (Index return was between 0% and 10%); and a ‘robust market’ (Index return was greater than 10%). There were 292 five-year average annual rolling return periods between June 30, 1995 and September 30, 2024. Past performance is no guarantee of future returns.
INTERNATIONAL EQUITY COMPOSITE (CURRENCY EXPOSURE HEDGED TO THE USD)
The performance results reflected above are over the course of many years and reflect multiple market cycles and varying geopolitical, market and economic conditions. Past performance is no guarantee of future results. Performance results vary dramatically over shorter time periods. Investing involves the risk of loss, including the loss of principal.
Results of individual portfolios will vary from results shown. The Composite consists of the results of all fully discretionary international equity portfolios denominated in US dollars that have been under management for at least one quarter prior to measurement and that implement a currency hedging strategy. The portfolios included in the Composite invest primarily in securities of companies located outside, or that derive a large portion of their revenues from activities outside, the United States, and hedge perceived foreign currency exposure, where practicable, back to the US dollar. Returns are time- and asset-weighted, and reflect beginning of quarter market values. Beginning 01/01/1998 and ending 10/03/2003, one international equity portfolio (with average quarterly AUM of $12.9mm) was excluded from the Composite due to highly volatile weekly cash flows, which impaired performance measurement. One portfolio in the Composite, the Tweedy, Browne International Value Fund, accounts for approximately 97.1% of Composite assets as of 09/30/2024. As of 09/30/2024, 4 portfolios were included in the Composite, representing $5,823.1mm in assets under management. Composite results are inclusive of dividends and net of foreign withholding taxes.
1. Performance “before deducting fees” does not reflect the impact of Tweedy, Browne’s advisory fee, but reflects the impact of transaction costs that are imposed in connection with the purchase or sale of a portfolio position, such as brokerage commissions, exchange fees, local market fees, and regulatory fees, if any, and hedging costs. For periods prior to 10/01/2014, ticket charges imposed by Tweedy, Browne’s clearing brokers were also included (since 10/01/2014, Tweedy, Browne no longer uses a clearing broker). Performance for periods since 10/01/2014 reflects the impact of any ticket charges imposed by Pershing LLC (in the case of portfolios custodied at Pershing LLC).
2. Performance “net of actual fees” reflects all of the above transactions costs included in performance before deducting fees (see footnote 1), in addition to actual investment advisory fees billed and, in the case of a mutual fund portfolio and a private fund portfolio managed by Tweedy, Browne that are included in the Composite, and an offshore fund portfolio that was included in the Composite from 09/30/1992 through 03/31/2004, also reflects the deduction of all other expenses paid by those portfolios. One portfolio in the Composite was charged a 20% annual incentive fee, accrued monthly. Net of actual fees results reflect this fee. This, in part, explains the substantial differential that occurred in certain years between the “before deducting fees” and “net of actual fees” results, particularly in 1993. This portfolio was included in the Composite from 09/30/1992 through 03/31/2004, the last full period during which the portfolio was denominated in USD. Investment advisory fees differ across portfolios.
The MSCI EAFE Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets, excluding the US and Canada. The MSCI EAFE Index (Hedged to USD) consists of the results of the MSCI EAFE Index hedged 100% back into US dollars and accounts for interest rate differentials in forward currency exchange rates. The MSCI EAFE Index (USD) reflects the return of the MSCI EAFE Index for a US dollar investor.
The hedged index is included to illustrate how the stocks that are the components of the MSCI EAFE Index would have performed in their local currencies for a US dollar investor. The portfolios included in the composite are actively managed, unlike the indices, and consist of securities that vary widely from those included in the indices in terms of portfolio composition, country and sector allocations, and other metrics. The hedged index is fully nominally hedged on a monthly basis, whereas Tweedy, Browne’s hedged portfolios only hedge their perceived currency risk where practicable. Tweedy, Browne applies a different hedging methodology than the hedged index. Results for each index are inclusive of dividends and net of foreign withholding taxes. Index results are shown for illustrative purposes only, and do not reflect any deduction for fees and expenses. You cannot invest directly in an index.
INTERNATIONAL EQUITY COMPOSITE (IN USD)
The performance results reflected above are over the course of many years and reflect multiple market cycles and varying geopolitical, market and economic conditions. Past performance is no guarantee of future results. Performance results vary dramatically over shorter time periods. Investing involves the risk of loss, including the loss of principal.
Results of individual portfolios will vary from results shown. The Composite consists of the results of all fully discretionary international equity portfolios denominated in US dollars that have been under management for at least one quarter prior to measurement and that do not implement a currency hedging strategy. The portfolios included in the Composite invest primarily in securities of companies located outside, or that derive a large portion of their revenues from activities outside, the United States. Returns are time- and asset-weighted, and reflect beginning of quarter market values. The Composite included just one account from inception through 12/31/2000. As of 09/30/2024, 3 accounts were included in the Composite, representing $302.3mm in assets under management. Composite results are inclusive of dividends and net of foreign withholding taxes.
1. Performance “before deducting fees” does not reflect the impact of Tweedy, Browne’s advisory fee, but reflects the impact of transaction costs that are imposed in connection with the purchase or sale of a portfolio position, such as brokerage commissions, exchange fees, local market fees, and regulatory fees, if any. For periods prior to 10/01/2014, ticket charges imposed by Tweedy, Browne’s clearing brokers were also included (since 10/01/2014, Tweedy, Browne no longer uses a clearing broker). Performance for periods since 10/01/2014 reflects the impact of any ticket charges imposed by Pershing LLC (in the case of portfolios custodied at Pershing LLC). Investment advisory fees differ across accounts.
2. Performance “net of actual fees” reflects all of the above transactions costs included in performance before deducting fees (see footnote 1), in addition to actual investment advisory fees billed and, in the case of a mutual fund managed by Tweedy, Browne that is included in the Composite, also reflects the deduction of all other expenses paid by that portfolio. Investment advisory fees differ across accounts.
The MSCI EAFE Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets, excluding the US and Canada. The MSCI EAFE Index (USD) reflects the return of the MSCI EAFE Index for a US dollar investor. The MSCI EAFE Index (Hedged to USD) consists of the results of the MSCI EAFE Index hedged 100% back into US dollars and accounts for interest rate differentials in forward currency exchange rates.
The hedged index is included to illustrate how the stocks that are the components of the MSCI EAFE Index would have performed in their local currencies for a US dollar investor. The portfolios included in the composite are actively managed, unlike the indices, and consist of securities that vary widely from those included in the indices in terms of portfolio composition, country and sector allocations, and other metrics. The hedged index is fully nominally hedged on a monthly basis, whereas Tweedy, Browne’s hedged portfolios only hedge their perceived currency risk where practicable. Tweedy, Browne applies a different hedging methodology than the hedged index. Results for each index are inclusive of dividends and net of foreign withholding taxes. Index results are shown for illustrative purposes only, and do not reflect any deduction for fees and expenses. You cannot invest directly in an index.
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