Hereford Funds-IMVA Opportunity Fund February 2015 February 2015 Investment Review February finally provided a measure of success for the Fund. I am still trying to get us back to flat for the year, but it was nice to see a move in the right direction. Early in the month, I reduced our energy sector holdings by completing the liquidation of Triangle Petroleum, trimming Stone Energy, and exiting American Eagle. The Fund remains overweight the energy sector, but I have tried to lower our risk incrementally by reducing the smaller capitalization exposure. Other activity included partial sales of Intrepid Potash, Advanced Energy, Apple, Abbott Labs, and Anacor Pharmaceuticals. Advanced Energy (a semi-conductor capital equipment manufacturer) and Anacor have done well for the Fund, and Anacor continues to excel. Apple and Abbott, both blue chip stocks, appear to have promising futures, but each is fairly popular at the moment, which makes me nervous. The only purchases during the month were an addition to Luminex and a new position in American Express. Luminex has been weak since the conference call in early February when the new CEO provided guidance for 2015. The guidance was obviously fairly sobering, but I believe our thesis remains intact. Nachum Shamir, the new CEO, seems to be setting expectations for the next couple of quarters at levels that he can achieve and hopefully exceed. The real energy and potential upside behind LMNX is the progress of Project Aries. That product should enter clinical trials shortly, and we hope to see FDA approval in late summer. American Express’s stock came for sale after the announcement that their deal/partnership with Costco was ending. This move was obviously a negative surprise for the market, and AMEX was down sharply. Costco has been a very important source of earnings for AMEX, and this change likely means that AMEX earnings will be flat to down in 2015. Nonetheless, I believe that the weakness in AMEX provided us with an opportunity to buy one of the great finance companies on sale. I am encouraged that AMEX was willing to walk away from a proposal that did not meet their profitability expectations, and, longer term, I believe that AMEX can outperform based on the quality of its cardholder base, opportunities to increase merchant penetration, and the security AMEX provides in a world of increasing cyber fraud and crime. Key Information NAV A Shares (28/2/15): $64.14 Total Fund Size: $1.93 mil Strategy Assets: $146.74 mil(a) Fund Launch Date: 31-Jan-14(b) Monthly Performance (%) Mar-14 Apr-14 May-14 Jun-14 -1.3 -2.1 -1.9 5.3 0.8 0.4 2.2 2.3 0.8 0.7 2.4 2.1 Hereford Funds-IMVA Opportunity Fund S&P 1500 Index(d) S&P 500 Index(d) Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 -6.4 1.7 -8.6 -13.1 -7.7 -5.5 -8.6 7.4 -1.8 4.1 -1.8 2.7 2.5 -0.1 -2.9 5.7 -1.4 4.0 -1.4 2.4 2.7 -0.3 -3.0 5.8 Period Performance (%) Since Inception 31/03/99 YTD -1.8 2.7 2.6 IMVA Opportunity Portfolio(c) S&P 1500 Index(d) S&P 500 Index(d) 1 yr -35.3 14.9 15.5 2 yr -8.4 20.2 20.3 3 yr 2.6 17.9 18.0 4 yr 0.8 14.5 14.6 5 yr 8.5 16.3 16.2 10 yr 9.1 8.2 8.0 Cumulative 132.7 141.3 120.5 Annualised 5.5 5.7 5.1 IMVA Opportunity Portfolio(c) vs. S&P 1500(d) & S&P 500(d) Ten Years Ending 28/2/15 450 Start of Hereford Funds-IMVA Opportunity Fund 31-Jan-14 350 400 300 350 250 300 200 250 150 200 100 150 50 100 500 IMVA Opportunity Portfolio Fund's TopTen Holdings 3D Systems Corp. Luminex Corp. KVH Industries, Inc. Anacor Pharmaceuticals, Inc. Babcock & Wilcox Co. Intrepid Potash, Inc. Stone Energy Cree, Inc. Murphy Oil Corp. Quidel Corp. % NAV 8.26 7.17 5.28 5.07 4.95 4.76 4.71 4.56 4.44 3.76 S&P 1500 S&P 500 Fund's GICS Sectoral Breakdown Consumer Discretionary Consumer Staples Energy Financials Health Care Industrials Information Technology Materials Telecommunication Services Utilities [Cash] Total % of assets 4.2 -18.6 10.2 18.0 8.0 25.5 6.5 --9.0 100.0 YTD -1.8 2.7 2.6 Investment Objective The investment objective of the Hereford Funds-IMVA Opportunity Fund is to provide capital appreciation over a multi-year investment horizon by investing primarily in a diversified portfolio of publicly traded equity securities of US-based companies, which hold unique opportunities in the opinion of the Investment Manager. Potential investments comprise small, mid, and large capitalization companies; growth and value companies; and special situations, including non US-based companies, which are listed on a US exchange. The strategy is highly concentrated and appropriate only for risk-tolerant, long-term investors who can accept the potential for materially greater volatility than the broad market indices. The indicative benchmarks are the S&P 1500 and the S&P 500 Indices. Risk Profile(e) Fund Codes Bloomberg: ISIN: Reuters: Sedol: Valoren: WKN: HFIMVOALX* LU1022309220 N/A BJ625V8 23467814 A1XCJ3 Since Inception (31/03/99) - 31/12/14 Volatility Sharpe Ratio Information Ratio Tracking Error Beta Alpha Reference Strategy 28.59 0.17 (listed below benchmark) (listed below benchmark) (listed below benchmark) (listed below benchmark) S&P 500 17.12 0.16 0.12 18.96 1.28 2.97 S&P 1500 17.32 0.19 0.09 18.79 1.27 2.23 * Share Class A Fund Details Investors Dealing day Dividends Investment Manager Management Company Custodian Legal Advisers Auditor Open to Non-U.S. investors only Daily None: income accumulated within the fund Investment Management of Virginia, LLC, 919 E. Main Street, Suite 1600, Richmond, VA 23219, USA BSI Fund Management S.A., 44F, rue de la Vallée, L-2661 Luxembourg BSI Europe S.A., 122, rue Adolphe Fischer, L-1521 Luxembourg Elvinger, Hoss & Prussen, 2 Place Winston Churchill, L-1340 Luxembourg Deloitte Audit S.à.r.l., 560, rue de Neudorf, L-2220 Luxembourg Annual Management Charge Share Class A(f) 1.25% Minimum Investment Share Class A $100,000 initial; $10,000 subsequent Order Transmission / Information Original Applications To: UBS Fund Services (Luxembourg) S.A. attn: Transfer Agent 33A, avenue J.F. Kennedy L-1855 Luxembourg Subsequent Applications Only Via Facsimile: UBS Fund Services (Luxembourg) S.A. attn: Transfer Agent Fax : (+352) 441010 6417 Tel: (+352) 441010 6404 e-mail: [email protected] (a) This figure refers to the approximate total assets invested in the reference strategy as of 28/2/15. The figure includes $1.93 million in assets (Hereford Funds-IMVA Opportunity Fund), $135.54 million in assets managed directly by Investment Management of Virginia, LLC ("IMVA" or "the Investment Manager"), and $9.27 million in assets managed by other firms based upon models provided by the Investment Manager. The $135.54 million managed directly by IMVA comprise those accounts in the Opportunity Portfolio composite (see www.imva.net), as well as “Special” Opportunity Portfolio accounts, which are excluded from the composite for reasons/variances, including but not limited to these: they have different weightings; client restrictions have been imposed; they are wrap accounts; they do not own all Opportunity Portfolio positions, or they own additional positions. Model assets have been excluded from the definition of the firm for GIPS purposes. (b) The Hereford Funds-IMVA Opportunity Fund was funded on 31/1/14. The first trades were executed on 3/2/14. (c) Data and graph depict IMVA Opportunity Portfolio composite returns through January of 2014 and Hereford Funds-IMVA Opportunity Fund Class A thereafter (net basis). Historical net performance of the IMVA Opportunity Portfolio composite (the Reference Strategy) reflects modeled fees and expenses typical of Hereford Funds-IMVA Opportunity Fund Class A (1.25% fee + 0.25% expense). Fund follows substantially the same parameters as the Reference Strategy, although the Fund has a 10% constraint for individual positions and a 40% limit for the top five names (IMVA's Opportunity Portfolio has no such constraints). Performance presentation is incomplete without accompanying footnotes as shown at www.imva.net. (d) Total return including dividends. (e) Source: eVestment Analytics – All numbers are presented gross of fees and expenses. (f) Share Class A is tax transparent in Germany and has been granted Reporting Status by HMRC as of 31 January 2014. This document is for information purposes and internal use only. It is neither an advice nor a recommendation to enter into any investment. Investment suitability must be determined individually for each investor, and the financial instruments described above may not be suitable for all investors. This information does not provide any accounting, legal, regulatory or tax advice. Please consult your own professional advisers in order to evaluate and judge the matters referred to herein. An investment should be made only on the basis of the prospectus, the annual and any subsequent semi-annual-reports of HEREFORD FUNDS (the "Fund"), a société d'investissement à capital variable, established in Luxembourg and registered under Part I of Luxembourg law of 20 December, approved by the Commission de Surveillance du Secteur Financier (CSSF). These can be obtained from [the Fund, 44F, rue de la Vallée, L-2661 Luxembourg or from BSI Fund Management S.A., 44F, rue de la Vallée, L-2661 Luxembourg and any distributor or intermediary appointed by the Fund]. No warranty is given, in whole or in part, regarding performance of the Fund. There is no guarantee that its investment objectives will be achieved. Potential investors shall be aware that the value of investments can fall as well as rise and that they may not get back the full amount invested. Past performance is no guide to future performance. The information provided in this document may be subject to change without any warning or prior notice and should be read in conjunction with the most recent publication of the prospectus of the Fund. Whilst great care is taken to ensure that information contained herein is accurate, no responsibility can be accepted for any errors, mistakes or omission or for future returns. 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