Charles de Vaulx IVA Worldwide Fund Q3 Letter

Charles de Vaulx IVA Worldwide Fund Q3 Letter
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Charles de Vaulx IVA Worldwide Fund Q3 Letter

The IVA Worldwide Fund Class A (NAV) (“the Fund”) ended the quarter on September 30, 2014 with a return of -1.23% versus the MSCI All Country World Index (“Index”) return of -2.31%. This brings our year-to-date return to 4.04% versus the Index return of 3.73% for the same period.

Global equity markets were volatile this quarter, falling from late July to early August and again in September, as the Federal Reserve prepares to end its quantitative easing program and markets digest the possibility of them raising rates earlier than expected as the U.S. economy slowly improves. Also, a few economic indicators released this quarter signaled growth in China is slowing which rattled markets.

We were pleased with the Fund’s performance this quarter and, more specifically, from July 25 to August 7 when the MSCI All Country World Index fell -3.86%. During this time we demonstrated our resiliency in down markets with our Fund returning -1.64% as our cash position served as a buffer. We are also happy with our performance year-to-date as it highlights that our stock picking has been good enough to offset the dilution from our cash exposure which was 36.0% at quarter-end. As long-term, absolute return investors, cash plays a critical role in the portfolio: it is the ammunition to buy future bargains and it helps protect the portfolio on the downside, as demonstrated this quarter.

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