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Hereford Funds DGHM US All-Cap Value Fund
December 2015
Investment Review
The Hereford Funds DGHM US All-Cap Value Fund Class A shares returned -3.5% for the month of December compared to a -2.4% return for the
Russell 3000 Value Index. The S&P 500 returned -1.6% for the month. Sectors that added value during the month were led by Business Services
(Omnicom +3%), Basic Materials (Glatfelter +4%), and Miscellaneous Financials (outperformance was driven by stocks we did not own in a down
sector). Sectors that underperformed this month were Technology (Analog Devices -10%), Capital Goods (Regal Beloit -9%), and Retail (Bed Bath
& Beyond -11%). Analog Devices was negatively impacted by concerns over their Apple consumer exposure. Regal Beloit was weak due to
concerns over a weakening US economy. Bed Bath & Beyond was down as they preannounced a weaker than expected quarter. We continue to
hold all three names as we are positive on their longer-term fundamentals.
There were no new names added this month, while we did exit two positions in Energy. The remaining stub position in Baker Hughes was sold as
their potential merger with Halliburton continues to be delayed by regulatory issues. Range Resources was sold due to a deteriorating natural gas
oversupply situation. Cash averaged 3.0%.
Thank you for your continued support.
Investment Objective
The investment objective of the ACV sub fund is to provide capital appreciation over a multi-year investment horizon by investing primarily in a
diversified portfolio of publicly traded equity securities of US based companies, which the Investment Manager believes to be undervalued. The
companies will generally have a market capitalizations of more than USD 1 billion.
The sub fund may, on an ancillary basis, invest in US-based companies with higher or lower capitalizations as well as in non US-based companies.
The Compartment may invest in American Depository Receipts and American Depository Shares.
The indicative benchmarks are the Russell 3000 Value and the S&P 500 Indices.
Key Information
NAV A Shares:
Total Fund Size:
as of December 31, 2015
$713.025mil(a)
July 31, 2009
Strategy Assets:
Fund Launch Date:
$180.79
$145.529mil
Monthly Performance (%)
HF DGHM US ACV
(c)
Russell 3000 Value Index
(c)
S&P 500 Index
as of December 31, 2015
Jan-15 Feb-15 Mar-15 Apr-15 May-15
(3.8)
5.6
(0.1)
0.1
(0.0)
(4.0)
4.8
(1.1)
0.7
1.2
(3.0)
5.8
(1.6)
1.0
1.3
Jun-15
(2.6)
(1.8)
(1.9)
Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15
(0.1)
(6.1)
(4.0)
5.9
(0.5) (3.5)
0.2
(5.9)
(3.1)
7.4
0.6
(2.4)
2.1
(6.0)
(2.5)
8.4
0.3
(1.6)
Period Performance (%)
YTD
(9.4)
(4.1)
1.4
Since Inception (January 1, 1983 - December 31, 2015)
DGHM ACV / HF DGHM US ACV
(c)
Russell 3000 Value Index
(c)
S&P 500 Index
(b)
YTD
(9.4)
(4.1)
1.4
1 yr
(9.4)
(4.1)
1.4
2 yr
(0.6)
3.9
7.4
3 yr
10.2
12.8
15.1
4 yr
9.3
13.9
15.4
Value of a Dollar
5 yr
6.4
11.0
12.6
10 yr
5.9
6.1
7.3
Cumulative
3005.7
3553.9
3221.8
Annualized
11.0
11.5
11.2
Past Ten Years December 31, 2005 - December 31, 2015)
DGHM ACV / Hereford Funds DGHM US ACV(b) vs. Russell 3000 Value(c) & S&P 500(c)
210
170
KEY
DGHM ACV/Hereford Funds DGHM US ACV
Russell 3000 Value
S&P 500
130
Start of HF DGHM
US ACV
31-Jul-09
90
50
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-10
Dec-11
Dec-12
Dec-13
Dec-14
Dec-15
Hereford Funds DGHM US All-Cap Value Fund
December 2015
Portfolio
as of December 31, 2015
Sector Breakdown
Industrial Cyclicals
Consumer Cyclicals
Technology
Non-Cyclicals
Financials
Utilities
[Cash]
Total
%
28.8
7.9
9.4
10.6
30.1
11.1
2.1
100.0
Top Ten Holdings
Pfizer Inc.
JPMorgan Chase & Co.
AT&T Inc.
Suncor Energy Inc.
Halliburton Co.
Cisco Systems, Inc.
WEC Energy Group Inc
PDC Energy Inc.
Check Point Software Technologies
Fluor Corp.
%
4.8
4.7
4.6
3.7
3.6
3.6
3.5
3.3
3.2
3.1
Total
Since Inception (January 1, 1983 - December 31, 2015)
(d)
Risk Statistics
Volatility
Sharpe Ratio
Information Ratio
Tracking Error
Beta
Alpha
DGHM ACV
16.54
0.53
(listed below benchmark)
(listed below benchmark)
(listed below benchmark)
(listed below benchmark)
R3KV S&P 500
15.73
16.00
0.48
0.45
0.19
0.20
6.79
8.19
0.96
0.90
1.79
2.74
37.9
Fund Details
Bloomberg:
ISIN:
Reuters:
Sedol:
Valoren:
WKN:
HERACVALX*
LU0435791347
N/A
B5MDN13
10269479
A0RPYP
* Share Class A
Dealing day:
Dividends:
Investment Manager:
Management Company:
Custodian:
Legal Advisers:
Auditor:
Annual Management Charge
(e)
Share Class A
Share Class D(f)
Share Class B(g)
1.25%
1.75%
0.95% (capped TER at 1.20%)
Daily
None (income accumulated within the fund)
Dalton, Greiner, Hartman, Maher & Co., LLC, 565 Fifth Avenue, #2101, NYC, 10017, USA
BSI Fund Management S.A., 44F rue de la Vallée, L-2661 Luxembourg
BSI Europe S.A., 122 rue Adolphe Fischer, L-1521 Luxembourg
Elvinger, Hoss & Prussen, 2 Place Winston Churchill, L-1340 Luxembourg
Deloitte Audit S.à.r.l.
Minimum Investment
Share Class A
Share Class D
Share Class B
$100,000 initial; $10,000 subsequent
$10,000 initial; $1,000 subsequent
$10,000,000 initial; $100,000 subsequent
Order Transmission / Information
Original Applications to:
UBS Fund Services
Attn: Transfer Agent
33a, avenue J.F. Kennedy
L-1855 Luxembourg
Subsequent Applications only via Facsimile:
UBS Fund Services
Attn: Transfer Agent
Fax: (+352) 4410106417
Tel: (+352) 4410106404
Email: [email protected]
(a) This refers to the total assets invested in the reference strategy managed by the Investment Manager. Assets include third party platform assets for which DGHM does not have full
conditional authority, and which have been excluded from the definition of the firm for GIPS purposes. The assets consist of direct wrap relationships estimated at $310 million and model
portfolio relationships estimated at $21 million as of 31/12/15.
(b) Data and graph depict DGHM composite through July 2009 and Hereford Funds DGHM US All-Cap Value Class A thereafter. Historical net performance of DGHM All-Cap Value
Composite returns (the Reference Strategy) includes modelled fee and expense typical of Hereford Funds DGHM US All-Cap Value Fund Class A (1.25% fee + 0.25% expense). Fund follows
same strategy. Performance presentation incomplete without accompanying footnotes as shown at www.dghm.com.
(c) Total return including dividends.
(d) Source: FactSet – All numbers are based on the DGHM AllCap Value composite and presented gross of fees and expenses.
(e) Share Class A is registered with the BaFin for public distribution in Germany, registered with the AFM for public distribution in the Netherlands, registered with the AMF for public distribution
in France, registered with Finma for public distribution in Switzerland, and has been granted Reporting Status by HMRC as of October 1st, 2010.
(f) Share Class D is registered with the BaFin for public distribution in Germany, registered with the AFM for public distribution in the Netherlands. registered with the AMF for public distribution
in France, and registered with Finma for public distribution in Switzerland.
(g) Share Class B is registered with the BaFin for public distribution in Germany.
France - Centralizing Correspondent as defined by French Regulation:
Société Générale - Order Desk, 32, avenue du Champ de Tir, BP 81236, F-44312 Nantes Cedex 3;
Phone: +33/2.51.85.66.40, Fax: +33/2.51.85.58.71
Germany – Paying Agent as defined by German Regulation:
Marcard, Stein & Co – Ballindamm 36, 20095 Hamburg;
Phone: +49/40.32.099.556, Fax: +49/40.32.099.206
Switzerland - Representative and Paying Agent as defined by Swiss Regulation:
Société Générale, Zurich Branch - Talacker, 50, P.O. Box 1928, CH-8021 Zurich;
Phone: +41/58.272.34.18 Fax: +41/58.272.35.49
This document is for information purposes and internal use only. It is neither an advice nor a recommendation to enter into any investment. Investment suitability must be determined
individually for each investor, and the financial instruments described above may not be suitable for all investors. This information does not provide any accounting, legal, regulatory or tax
advice. Please consult your own professional advisers in order to evaluate and judge the matters referred to herein. An investment should be made only on the basis of the prospectus, the
annual and any subsequent semi-annual-reports of HEREFORD FUNDS (the "Fund"), a société d'investissement à capital variable, established in Luxembourg and registered under Part I of
Luxembourg law of 20 December, approved by the Commission de Surveillance du Secteur Financier (CSSF). These can be obtained from the Fund, from BSí FUND MANAGEMENT S.A.,
44F, rue de la Vallée, L- 2661 Luxembourg, and any distributor or intermediary appointed by the Fund. No warranty is given, in whole or in part, regarding performance of the Fund. There is no
guarantee that its investment objectives will be achieved. Potential investors shall be aware that the value of investments can fall as well as rise and that they may not get back the full amount
invested. Past performance is no guide to future performance. The information provided in this document may be subject to change without any warning or prior notice and should be read in
conjunction with the most recent publication of the prospectus of the Fund. Whilst great care is taken to ensure that information contained herein is accurate, no responsibility can be accepted
for any errors, mistakes or omission or for future returns. This document is intended for the use of the addressee or recipient only and may not be reproduced, redistributed, passed on or
published, in whole or in part, for any purpose, without the prior written consent of HEREFORD FUNDS. Neither the CSSF nor any other regulator has approved this document.