For the second quarter ended June 30th, 2025, KVF gained $4.76 per share, increasing the value of each share to $79.02. This represents a pre-tax return of almost 8%, which was just under the S&P 500's 10% return and right around the 8% returns of the Russell 2000 and the S&P/TSX indices.
KVF's quarter was better than it looked, however. Currency changes over the quarter hurt returns by $1.78 per share, as US dollar weakness made the substantial USD portion of KVF's portfolio worth less. Currency fluctuations are expected to continue to have large effects on any one quarter's results, but tend to even out over the long term.
The quarter started out very poorly, as the market reacted negatively to Trump's tariff impositions. This weakness allowed KVF to deploy some of its cash in both new positions, as well as in lowering its cost basis in several existing positions. As the market's tantrum receded, KVF then benefited from having a larger invested portfolio experience higher prices.
Some examples of new positions include another home builder, LGIH, that has fallen to highly pessimistic levels, and consultant RGP, which has seen its stock get demolished as the labour market has weakened.
Helping generate this quarter's strong returns were buyouts in shares of LSEA and BGFV, and a better-than-expected tariff position for outsized holding DRX.CA. While the LSEA buyout was very profitable overall for KVF, the BGFV buyout caused overall losses (despite the quarterly bump), as business conditions have deteriorated substantially since its initial purchase.
KVF's income statement, balance sheet and pre-tax/post-fee returns since inception 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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