Thursday, April 6, 2023

Karsan Value Funds: 2023 Q1 Results

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 first quarter ended March 31st, 2023, KVF gained $1.36 per share, increasing the value of each share to $48.47. This represents a 4.5% pre-tax return, matching the S&P 500 and S&P/TSX indices, and slightly outperforming the Russell 2000, which struggled to break-even in the quarter. Currency gains helped returns by $0.17 per share in the quarter.

The biggest driver of this quarter's returns was Hammond Power (HPS), which I wrote about last month. Sales of Hammond and other major holdings, combined with my inability to find suitable replacements, has resulted in a gradual rise in KVF's cash position. Considering the general market's level as measured by the Shiller PE or CAPE 10 valuation methods, that may not be a bad position to be in.

Factors like average market prices do not influence investment decisions, however. Should opportunities in individual companies become available that fit KVF's investment profile, the cash position will quickly be deployed, as it has in the past.

KVF's income statement and balance sheet are included below (click to enlarge). Note that securities are marked to market value, and amounts are in thousands of $CAD:

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