Out of 115 five-year measurement periods, the US Equity/ADR Composite has outperformed the S&P 500 Index/MSCI World Index (in USD)3 60 times, or 52% of measured periods.
The above chart illustrates the five-year average annual rolling net returns (calculated quarterly) for the US Equity/ADR Composite (the ‘Composite’) since December 31, 1990, compared to the five-year average annual rolling returns for its benchmark index, the S&P 500 Index/MSCI World Index (in USD)3 (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 indicate the Composite’s relative outperformance, while points below the diagonal axis indicate the Composite’s relative underperformance. Returns were plotted for three distinct equity market environments: a ‘down market’ (benchmark return was less than 0%); a ‘normal market’ (benchmark return was between 0% and 10%); and a ‘robust market’ (benchmark return was greater than 10%). There were 115 five-year average annual rolling return periods between December 31, 1990 and June 30, 2024. Past performance is no guarantee of future returns.
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. US Equity/ADR portfolios invest primarily in US equity securities and, since 01/01/2005, also invest in ADRs, which are traded in the US financial markets but represent shares of non-US companies. The Composite consists of the results of the Firm’s discretionary US Equity/ADR portfolios denominated in US dollars with assets in excess of $250,000 that have been under management for at least six months prior to measurement. This Composite excludes accounts that paid performance fees. If those accounts had been included, performance results would not have been materially lower than those shown.
Results shown are asset-weighted using beginning of quarter values. As of 06/30/2024, 160 portfolios were included in the Composite, representing $277mm in assets under management. Composite results are inclusive of dividends and net of any applicable 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).
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. Investment advisory fees differ across portfolios.
3. The S&P 500/MSCI World Index (in USD) is a combination of the S&P 500 Index and the MSCI World Index (in USD) linked together by Tweedy, Browne, and represents the performance of the S&P 500 Index for the periods 12/31/1992 – 12/31/2004, and the performance of the MSCI World Index (in USD) beginning 01/01/2005 and thereafter. From inception through 12/31/2004, the portfolios included in the Composite invested primarily in US equity securities, and so the S&P 500 was chosen as the relevant benchmark. Beginning 01/01/2005, portfolios in the Composite began to have meaningful exposure to non-US equities, generally through investments in ADRs, so the MSCI World Index (in USD) has been chosen as the relevant benchmark.
The S&P 500 is an unmanaged, capitalization-weighted index composed of 500 widely held common stocks and assumes the reinvestment of dividends. The index is generally considered representative of US large capitalization stocks.
The MSCI World Index is an unmanaged free float-adjusted market capitalization-weighted index that is designed to measure equity market performance of the world’s major developed markets. The MSCI World Index (in USD) reflects the return of the MSCI World Index for a US dollar investor. Results for the index are inclusive of dividends and net of foreign withholding taxes.
The Consumer Price Index (CPI) is not a stock index but is generally considered indicative of the rate of inflation. The CPI is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. The broadest and most comprehensive CPI is the All Items Consumers Price Index for All Urban Consumers (CPI-U), which is reflected in the table above. Source: Bloomberg
The portfolios included in the composites are actively managed, unlike the indices, and are expected to look very different from the indexes in terms of portfolio composition, country and sector allocations, and other metrics, and in terms of returns. 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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