In 2025, the Value Fund achieved a modest return of 0.4%, a figure significantly affected by adverse currency fluctuations, particularly the strengthening U.S. dollar, which diminished full-year returns by approximately 4.3%. Despite these challenges, the fund adheres to a long-term strategy of avoiding currency hedging to minimize transaction costs, accepting short-term volatility for greater long-term benefits. This approach acknowledges that remaining unhedged has historically provided cost advantages, even when faced with periodic currency-driven headwinds.
While broader market indices, including the S&P/TSX, S&P 500, and DJIA, experienced significant gains, largely driven by a select group of high-performing technology companies, the Value Fund maintained its disciplined investment philosophy. The so-called “Magnificent Seven” were instrumental in the S&P 500’s performance, contributing substantially to its growth, yet the equally weighted index revealed a less enthusiastic market participation. Despite recognizing the innovative prowess of these dominant companies, the fund’s strategy prioritizes valuation discipline, declining to invest in assets perceived as overvalued. This stance aligns with other respected value investors who refuse to compromise principles even when market trends suggest otherwise, drawing parallels to historical instances where patience and a focus on intrinsic value ultimately prevailed.
Throughout the year, the Value Fund actively managed its portfolio, trimming positions that reached price targets to preserve capital and making strategic new investments. For instance, Alphabet’s strong performance and effective AI integration led to profit-taking, yet it remains a core holding due to its significant market share, robust cash flow, and technological advantages in AI. Conversely, the fund exited its investment in Fiserv following revelations of misleading growth figures and management issues, reclassifying it as an opportunistic value play rather than a long-term growth stock. Other adjustments included reducing exposure to Lululemon Athletica due to concerns over growth sustainability and external trade policy impacts. New strategic acquisitions included Novo Nordisk, Icon PLC, and Adobe Inc., reflecting the fund’s commitment to undervalued assets with strong growth potential. The fund concluded 2025 with a defensive cash position of 14.7% and a total portfolio value of $57.3 million, underscoring its long-term ownership strategy and valuation discipline.
As the investment landscape continues to evolve, characterized by dynamic markets and shifting valuations, adhering to a sound investment philosophy becomes increasingly critical. The Value Fund’s strategic approach, focusing on rigorous valuation, disciplined capital allocation, and a long-term perspective, demonstrates a commitment to navigating market complexities with integrity and foresight. This steadfastness not only aims to protect capital but also seeks to generate sustainable, risk-adjusted returns, fostering enduring prosperity for its clients. Such principles serve as a beacon, guiding investors toward prudent decisions and away from speculative excesses, ensuring a resilient and rewarding financial journey.