Karsan Value Funds (KVF) is a value-oriented fund, as described here. Though some readers have expressed an interest in investing, due to securities regulations the fund is not open to the public at this time. Should that change in the future, there will be an announcement on this site.
For the fourth quarter ended December 31st, 2009, KVF earned 58 cents per share, bringing the value of each share to $11.40. Once again, the markets were strong, and therefore most funds and most types of funds will have made money in this period. The true test of whether this (or any other) fund is adding value will take place over a period of several years and through both bull and bear markets.
Once again, weakness in the US dollar (relative to the Canadian dollar, the fund's reporting currency) hurt results. Had the exchange rate ended the quarter at the same position at which it started the quarter, earnings this quarter would have been 10 cents per share higher. Currency volatility is likely to continue to have a significant bearing on quarterly results, but over the long-term it is not expected to be a material factor.
As the market rose over the quarter, some stocks were divested following their exceptional price run-ups. These stocks include ATV, MRD, CMI and GDL. Despite these divestments, KVF continues to own a great many stocks that are deemed to be undervalued. At the same time, KVF is also capitalized to seize any opportunities the market may offer through both temporary or prolonged pullbacks.
KVF's income statement and balance sheet are included below. Note that securities are marked to market value: