FPA perennial Funds

FPA Perennial Fund: On The Most Important Contributor To Performance

FPA Perennial Fund’s letter to shareholders (see FPA Crescent here and FPA Capital funds here).

Dear fellow shareholders,

For the fourth quarter, FPA Perennial Fund was up 7.43%. The S&P and the Russell 2500 had strong gains as well of 10.51% and 8.66%, respectively. We are proud of our returns over longer periods with strong absolute and relative performance for 5, 10, and 15 years, as shown on the table below.

FPA perennial Funds

A redemption fee of 2.00% will be imposed on redemptions within 90 days. Expense ratio calculated as of most recent prospectus is 1.02%. Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown. This data represents past performance and investors should understand that investment returns and principal values fluctuate, so that when you redeem your investment it may be worth more or less than its original cost.

Current month-end performance data may be obtained by calling toll-free, 1-800-982-4372. Standout performers this year include Heartland Express, Inc. (NASDAQ:HTLD) (+50%) and Knight Transportation (NYSE:KNX) (+25%) both truckload carriers working to complete attractive acquisitions. Other winners in 2013 fit the description of light industrial or business services, with gains of +35-60% — suppliers of pumps, motors, valves, bar code printers, and industrial distributors.

We focus on owning high-quality businesses, firms with histories of earning high returns on capital with modest debt levels. These companies have leading market shares and top-tier management. They have demonstrable track records of wise allocation of the businesses’ cash flow. In other words, they walk the talk.

Our approach to investing sometimes generates unusual looking portfolios. We make no attempt to manage portfolios which mimic the benchmark. We have no fear of tracking error. Our portfolios are always much more concentrated than the benchmark, with much of the weightings the result of owning only a dozen or so names. Five- to ten-year holding periods for individual securities are not unusual as annual portfolio turnover has been very low, averaging about 15% over the past five years.

We believe the most important contributor to the long-term investment performance of the companies we own is growth in earnings, not changes in valuation (price/earnings ratio). Because growth is driven by earning high returns on capital and successful reinvestment of cash flow, it is necessary to own most of our portfolio securities for an extended period in order for this process to come to fruition.

See Full PDF here.

FPA Perennial Fund


Saved Articles

The Life and Career of Charlie Munger

Charlie is more than just Warren Buffett’s friend and Berkshire Hathaway’s Vice Chairman – Buffett has actually credited him with redefining how he looks at investing. Now you can learn from Charlie firsthand via this incredible ebook and over a dozen other famous investor studies by signing up below:

  • Learn from the best and forever change your investing perspective
  • One incredible tidbit of knowledge after another in the page-turning masterpiece of a book
  • Discover the secrets to Charlie’s success and how to apply it to your investing
Never Miss A Story!
Subscribe to ValueWalk Newsletter. We respect your privacy.

Congrats! Are you a smart person?

We have an exclusive targeted & limited time offer for being a sophisticated and loyal reader.

ValueWalkPremium is a website and newsletter on the latest industry news much of which is not in the public domain and obtained via our sources.

We also have 10 years of resources on how to use this information to better your investment process.

Sign up for  today and get our exclusive content for 40% off. This is our second biggest discount ever!!

Use coupon code VIP20 or click on the button below

Limited time offer only ENDS 4/30/2020 or after the next 40 subscribers take advantage whichever comes first – please do not share this discount with others