For the first quarter ended March 31st, 2026, KVF gained $1.40 per share, increasing the value of each share to $84.01. This represents a pre-tax gain of 2%, which outperformed the -5% of the S&P 500 and the flat Russell 2000, but came in just under the 3% generated by the resource-heavy S&P/TSX.
Prices of securities generally dropped this quarter (energy companies excepted) due to the war in Iran and KVF's portfolio was not immune. But a number of things went right which allowed us to eek out a small gain despite the challenging circumstances. KVF's financials Citigroup and Barclays offered exit points on the order of 300-400% over the few years they were held. KVF was also able to sell shares of HG Metal and Bristow Group for around 100% gains.
Unfortunately three of these four companies were leveraged and belong to highly cyclical industries, so they were only basket positions, rather than the massive positions I wish they had been in retrospect.
Because of the price drops this quarter, KVF was able to put a lot of its idle cash to work in the period. A number of new opportunities emerged from the market wreckage; what happens to the prices of these companies is not predictable in the short-term, but I expect good things to happen in the long-term. KVF still has some cash available in case the market becomes even more pessimistic.
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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