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IVA Funds Annual Report

The IVA International and Worldwide Fund have had great returns. Both fund hold high amounts of cash. The holdings are very diversified. The IVA International Fund (MUTF: IVIQX ) and the IVA Worldwide Fund (MUTF: IVWIX ) have come out with an Annual Report, which can be found here . Charles de Vaulx and Chuck de Lardamelle are two very well known value managers who run diversified portfolios with some stocks that you won’t see anywhere else. The Worldwide has averaged 9.03% (Institutional Class) since October 1, 2008, versus 6.03% for the MSCI All Country World Index. The International (Institutional Class) has averaged 9.00% over that time frame. Both very good returns. The Worldwide Fund has a broad portfolio including: 4.6% in gold, 3.5% in Berkshire Hathaway (NYSE: BRK.A ), and 3.3% in Astellas Pharmaceuticals ( OTCPK:ALPMY ). What is interesting is that the fund holds 35.2% in short term investments and 3.2% in sovereign bonds. So almost 40% in cash and over 5% in gold and gold mining. Looks to me like they’re pretty bearish on things. 22.9% of the portfolio is in the U.S., 6% France, and 7% Japan. According to the Annual Report: Our currency hedges helped to offset losses from the strong U.S. dollar, contributing 1.5% to return. At the end of the period, our currency hedges were 51% Japanese yen, 39% Australian dollar, 29% South Korean won, and 30% euro. What I love about these funds is that you just can’t find these stocks any place else. Who else owns Hong Kong & Shanghai Hotels ( OTCPK:HKSHY )? It’s a 50 cent dollar. It’s probably trading at half of net asset value. Who owns bonds in French conglomerate Wendel ( OTCPK:WNDLF )? Their holdings are off the wall and I love it! I don’t need active management to buy Coca-Cola (NYSE: KO ) and GE (NYSE: GE ). Why pay a high fee for glorified index funds. The International Fund has a similar make up to the Worldwide Fund. 35.2% are short term investments, 8.5% in fixed income, and 4.6% in gold. These are not your run of the mill mutual funds. These managers are allowed to invest as they feel. Some of the larger holdings are the same as noted above plus Nestle ( OTCPK:NSRGY ), Newscorp (NASDAQ: NWS ), and Samsung ( OTC:SSNLF ). International hedged its currencies as well which helped to mitigate the strong dollar. Barron’s wrote an article on the two funds. The article suggests that independent fund companies like IVA have lower fees and less conflicts of interest than funds owned by Wall Street banks. I tend to agree. Are these two managers going to jump ship for higher pay? Probably not as they most certainly have ownership in the firm. I suggest you go to the link and look at the Annual Report. There are so many names that you are probably not familiar with that you are bound to learn something. The Institutional Class’s expense ratio is 1% for each fund. I find that to be quite reasonable. de Vaulx and de Lardamelle have done a good job managing these funds. Putting together a portfolio like this is very difficult for the average person. You may be able to buy American blue chips but can you buy foreign bonds and then hedge the currencies? Probably not. Though the funds are closed to new investors, perhaps they will open again in the future. They are a good addition to a portfolio. Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.

Oil ETFs To Watch As Crude Slips To Below $40 Again

U.S. crude again trickled to below $40 per barrel on Wednesday following the bearish inventory storage report from EIA that has deepened global supply glut and amid fresh fears that the world’s largest oil producers will not cut production when they meet on Friday. The prospect of interest rates hike and the resultant surge in dollar added to the woes. As such, U.S. crude plunged 4.6% on the day while Brent slumped 4.2% to the nearly seven-year low. The inventory data showed that U.S. crude stockpiles unexpectedly rose by 1.2 million barrels in the week (ending November 27). This marks the tenth consecutive week of increase in crude supplies. Total inventory was 489.4 million barrels, which is near the highest level in at least 80 years. As the Organization of the Petroleum Exporting Countries (OPEC) is due to meet on Friday, the market is not expecting the members to arrest production. Instead they are expected to pump oil vigorously to protect their market share. If this happens, crude will continue to be in a free-fall territory like it was last year when OPEC had decided not to cut production. However, Saudi Arabia and its Persian Gulf allies are willing to cut back if other producers like Iran, Iraq, and Russia join them in the mission. In fact, at the meet, Saudi Arabia may propose a cut of 1 million barrels per day in the OPEC output to strike a balance in the oil markets. Outlook Remains Bleak The current fundamentals are not in favor of oil with rising output and waning demand. This is especially true as OPEC is pumping record oil since Saudi Arabia and other big producers are focusing on market share. Iran is looking to boost its production once the Tehran sanctions are lifted. Meanwhile, oil production in the U.S. has been on the rise and is hovering around its record level. On the other hand, demand for oil across the globe looks tepid given slower growth in most developed and developing economies. In particular, persistent weakness in the world’s biggest consumer of energy – China – will continue to weigh on the demand outlook. Notably, manufacturing activity in China shrunk for the fourth straight month in November to a 3-year low. The International Monetary Fund recently cut its global growth forecast for this year and the next by 0.2% each. This is the fourth cut in 12 months with big reductions in oil-dependent economies, such as Canada, Brazil, Venezuela, Russia and Saudi Arabia. That being said, the International Energy Agency (IEA) expects the global oil supply glut to persist through 2016 as worldwide demand will soften next year to 1.2 million barrels a day after climbing to five-year high of 1.8 million barrels this year. ETFs to Watch Given the bearish fundamentals and the OPEC meeting tomorrow, investors should keep a close eye on oil and the related ETFs. Below we have highlighted some of the popular ones, which could see large movements ahead of the OPEC decision: United States Oil Fund (NYSEARCA: USO ) This is the most popular and liquid ETF in the oil space with AUM of over $2.5 billion and average daily volume of over 25.7 million shares. The fund seeks to match the performance of the spot price of WTI. The ETF has 0.45% in expense ratio and lost 3.6% in the Wednesday trading session. iPath S&P GSCI Crude Oil Index ETN (NYSEARCA: OIL ) This is an ETN option for oil investors and delivers returns through an unleveraged investment in the WTI crude oil futures contract. The product follows the S&P GSCI Crude Oil Total Return Index, a subset of the S&P GSCI Commodity Index. The note has amassed $813.3 million in AUM and trades in solid volume of roughly 3.7 million shares a day. Expense ratio came in at 0.75% and the note was down 3.3% on the day. PowerShares DB Oil Fund (NYSEARCA: DBO ) This product also provides exposure to crude oil through WTI futures contracts and follows the DBIQ Optimum Yield Crude Oil Index Excess Return. The fund sees solid average daily volume of around 311,000 shares and AUM of $477.9 million. It charges an expense ratio of 78 bps and lost 2.9% in Wednesday’s trading session. United States Brent Oil Fund (NYSEARCA: BNO ) This fund provides direct exposure to the spot price of Brent crude oil on a daily basis through future contracts. It has amassed $82.7 million in its asset base and trades in a moderate volume of roughly 109,000 shares a day. The ETF charges 75 bps in annual fees and expenses. BNO lost 3.7% on the day. Original post .

NRG: A Green Done Undone By Coal

CEO David W. Crane resigned and the market cheered. Some may have thought it was a green dream undone. The blame belongs to coal and natural gas, not to solar. The resignation of David Crane as NRG (NYSE: NRG ) CEO sent the stock up, and fossil fuel advocates celebrated the demise of a green energy pioneer. The opposite is the case. Crane was undone by a $1 billion bet made on coal, specifically the Petra Nova “clean coal” project outside Houston, which is also taking down about $167 million in Department of Energy money. Crane had offloaded half of the project to a Japanese company, and a story early this year said the plant was operating normally, but a link to it on the NRG site no longer works. The idea of Petra Nova was to find a market for carbon dioxide. Instead of treating it as a pollutant and releasing it into the atmosphere, Petra Nova captures it and ships it via pipeline for injection into oil and gas wells. The carbon dioxide is meant to displace oil and natural gas in the formations, sequestering it from the atmosphere, but pushing valuable hydrocarbons to the surface. It’s a clever idea, but as oil and gas prices have declined it’s as uneconomic as coal itself. As Crane himself indicated in a recent conference call the rest of the company is running smoothly. Crane predicted the company would generate $3 billion to $3.2 billion in Earnings Before Interest, Taxes, Depreciation and Amortization, and $1 billion to $1.2 billion in free cash flow, during 2016. That would mean the company, whose present market cap is $3.3 billion, is now worth barely more than next year’s EBITDA, and less than three times expected free cash flow. The company isn’t out of the financial woods. There was $20.9 billion in debt supporting $31 billion in assets at the end of September. NRG’s plan is to shrink that balance sheet by $1.4 billion over the 2016 fiscal year, and Crane was confident in his call that the “retail” segment of the business would let it do just that. Investors don’t believe that, in part, because of the continued low price of natural gas but also, in part, because of the holes coal has blown in the balance sheet. The stock is down 63% for the year and, before Crane’s resignation, it showed no signs of recovery. Chief operating officer Mauricio Gutierrez is a Crane protégé and, like him, based in Princeton, NJ. Nothing is expected to change under his leadership. Crane, meanwhile, is now free to seek what might, literally, be greener pastures.