Tweedy, Browne Fund Q4 2024 Commentary

2025-02-10 01:00:00 ET

Summary

• The bull market in global equities continued strongly in Q4, driven by US mega-cap tech stocks, resulting in high double-digit returns for the S&P 500.
• Tweedy Funds underperformed in aggressive "risk-on" markets, with three out of four funds trailing their benchmarks, reflecting caution due to elevated market valuations.
• Portfolio activity slowed, with new positions in Japanese industrial companies and additions to existing holdings, while some positions were sold to generate tax losses.
• Despite high valuations, Tweedy Funds are well-positioned in value sectors, but caution is warranted due to potential market inflection points and economic uncertainties.

Setting aside a rather brief hiccup mid-quarter, the bull market in global equities continued in force during the Fourth Quarter, finishing the year once again with high double-digit returns, produced largely by a small group of “mega cap” technology stocks in the US, which investors have grown to know so well. This caps off a two- year period of back-to-back 20+% returns for the S&P 500 ( SP500 , SPX, 2023: 26% and 2024: 25%). According to Michael Cembalist, the JP Morgan strategist, “This is something which occurred just ten times since 1871. Only during the 1990s bull market and the Roaring Twenties did the good times continue for another two years.” ¹ ...

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