Tweedy Browne – Why Value Investing Will Continue To ThriveAdvisor Perspectives
This year marks the 100th anniversary of the renowned investment firm Tweedy Browne. The firm was originally a broker, and one of its clients was Benjamin Graham, co-author and author of the seminal textbooks on value investing: Security Analysis (1934) and The Intelligent Investor (1949). The firm also had brokerage relationships with Walter Schloss and Warren Buffett.
As of April 30, 2020, its flagship fund, the Tweedy Browne Global Value Fund (TBGVX), has returned 8.17% annually since its inception in 1993. That is 261 basis points better than the hedged MSCI EAFE index and 278 basis points better than the foreign stock fund average (which is calculated by Tweedy, Browne based on data provided by Morningstar and reflects average returns of all mutual funds in the Morningstar Foreign Large-Value, Foreign Large-Blend, Foreign Large-Growth, Foreign Small/Mid-Value, Foreign Small/Mid-Blend, and Foreign Small/Mid-Growth categories).
I interviewed six members of Tweedy, Browne’s investment committee: John Spears, Tom Shrager, Bob Wyckoff, Roger de Bree, Frank Hawrylak and Jay Hill.
The interview took place on May 14, 2020, over Zoom. I previously interviewed the members of the investment committee at Tweedy Browne, on February 5, 2019, when we discussed their investment philosophy, how they differentiate themselves and their views on currency hedging. Please refer to that interview for information on those topics.
I’d like to talk about the unique investment and economic climate we are facing. Your fund has done exceptionally well thus far this year on a relative basis. As of May 1, it outperformed the MSCI ACWI ex-U.S. value index by 803 basis points and the Morningstar foreign large-value peer group average by 634 basis points. To what do you attribute that?
Bob Wyckoff: It’s sad that it has come on the heels of a pandemic, but we’re happy that we have been able to add some value of late. To a great degree, the stocks that have been smashed during this crisis have been the economically-sensitive companies, including some of the deeply cyclical businesses. The higher quality companies and the interactive media and technology companies that the fund owns have held up better.
Read the full article here by Robert Huebscher, Advisor Perspectives