Friday, July 4, 2014

Karsan Value Funds: 2014 Q2 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 second quarter ended June 30th, 2014, KVF earned $0.42 per share, increasing the market value of each share to $18.78. On the surface, this result underperformed the S&P 500 and the TSX this quarter, which were up in the mid-single digits. However, it was pretty much in-line after adjusting for currency effects.

The strengthening Canadian dollar took a bite out of this quarter's returns. Had the USD/CAD exchange rate ended the quarter at the same level at which it started the quarter, earnings per share would have been $0.43 higher. Currency movements are likely to continue to play a large role in determining quarterly returns, but their effects on long-term returns are likely to be far less significant.

Helping propel the value of each share higher in recent months were strong positive price moves in Orange, Dacha Strategic Metals, and LICT Corp, as discussed here, here and here, respectively.

Finding value on this side of the Atlantic continues to get more difficult. As a result, KVF's portfolio continues to diversify away from the US in order to find future winners.

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 (except share and per-share amounts):

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