Karsan Value Funds (KVF) is a value-oriented fund, as described here. 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 third quarter ended September 30th, 2010, KVF earned $0.74 per share, bringing the value of each share to $12.50.
There were three main reasons for the fund's strong performance this quarter:
1) The market in general was up, and a rising tide lifts (almost) all boats
2) The fund benefited from its position in Blonder Tongue Labs (BDR). More details on this are available here.
3) The fund benefited from its position in Nu Horizons (NUHC). More details on this are available here.
The news was not all positive, however, as some of the fund's positions decreased in price. In many cases, this was seen as an opportunity to increase fund positions at what are believed to be even more attractive prices. Hopefully, these investments lay the groundwork for strong returns in future periods.
Another negative for returns this quarter was the currency exchange rate between Canada and the US. Had the USD/CAD exchange rate finished the quarter at the same level at which it started the quarter, earnings would have been $0.23 higher than they were. Currency volatility is likely to continue to have a significant bearing on short-term, quarterly results. However, over the long-term, currency volatility is not expected to be a material factor in the fund's overall performance. For this reason, the fund employs no hedging positions despite the short-term volatility that has been and likely will continue to be experienced by the fund.
KVF's income statement and balance sheet are included below. Note that securities are marked to market value, and amounts are in $CAD: