The iMGP Berkshire Dividend Growth ETF fell 1.23% (NAV return) in the second quarter compared to a loss of 2.17% for the Russell 1000 Value Index, the secondary benchmark. The Morningstar US Large Value category had a loss of 1.43% in the second quarter of 2024.
Performance quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the funds may be lower or higher than the performance quoted. Short term performance is not a good indication of the fund’s future performance and should not be the sole basis for investing in the fund.To obtain standardized performance of the funds, and performance as of the most recently completed calendar month, please visit www.imgpfunds.com. Returns less than one year are not annualized. You may pay a commission to purchase an ETF.
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Quarterly Portfolio Manager Commentary
Through Thick and Thin
Reimagine the depths of the financial crisis in 2009—a time when the US large-cap equity sector had experienced its worst decade ever, and many investors lost faith in US companies. Like many equity investors, our traditional core portfolio was feeling a bit washed up (to say the least) and was under significant pressure amidst the financial turmoil. The widely held view was the US economy would never recover, and emerging markets like China and the BRICS countries were going to gain preeminence. Heck, many weren’t even sure ATMs would dispense funds. Convincing investors to stay the course, let alone commit more funds, was daunting, to say the least.
Amidst the darkness, Berkshire thought differently. We noticed many US companies were offering dividend yields higher than fixed-income rates. We believed companies with a history of dividends signaled solvency, sustainability, and long-term value. This opportunity inspired us to start telling the story of dividend investing as a theme. That theme became so compelling we decided to launch a dividend strategy focused on certain US companies that would provide our investors with potentially sustainable and stable returns. The strategy was a bold idea at the time, but we believe it proved to be incredibly successful as we have navigated through the stormy market, and it still underscores how we think today. And if we told you in 2009 the following events would occur over the next 15 years, you’d probably stuff every dollar you had under the mattress:
- 2009-2010: Global Financial Crisis Aftermath
- 2010: The European Debt Crisis
- 2011: U.S. Credit Rating Downgrade
- 2012: Eurozone Crisis Intensifies
- 2013: Federal Reserve Taper Tantrum
- August 2015: The Chinese Stock Market Panic
- 2015-2016: Oil Prices Plummet to $30 a Barrel
- 2016: Brexit Referendum
- 2020: COVID-19 Pandemic
- 2021: Inflation Concerns and Supply Chain Disruptions
- 2022: Russia-Ukraine War
- 2022-2023: Rising Interest Rates and Recession Fears
- 2023: Banking Sector Crisis
- 2024: Fed Uncertainty, Higher Interest Rates, AI Boom
Despite what seems to be a yearly crisis, we are thrilled to report our flagship Dividend Growth Strategy has endured and reached a significant milestone, the 15-year anniversary of its launch! This achievement reinforces our belief in the long-term value of dividend investing and our commitment to delivering consistent and competitive returns to Berkshire investors.
Our high level of focus on this flagship strategy has enabled Berkshire to maintain our local roots while also gaining national prominence as a leader in dividend investing.
We remain delighted to be aligned with iM Global Partner, which helps maintain longevity and continuity for our investors for years to come. Equally important, we remain committed to our autonomy and independent thinking, which allows us to stay true to our principles and values.
The uptake of our strategy has been rewarding, reflecting demonstrated trust and confidence in our investment process and team, as evidenced by the steady growth Berkshire enjoys.
Your team at Berkshire is unwavering in its commitment to driving investment excellence.
Most of all, we appreciate the longevity of our relationship with you. Unlike traditional business that have hard assets, an investment firm is only as good as the quality of investment the team’s investment acumen, and the quality and loyalty of its investor base. On the latter, we couldn’t be happier to work for all of you.
Looking forward, our leadership team remains in place, galvanized around core principles, and more excited than ever. We’ve been in place since as early as 1999, and we remain inspired by one another every day. We believe solid dividend-paying companies can deliver exceptional results, even in a hypercompetitive and hyper volatile environment.
We are excited to continue navigating these uncertain market conditions with our disciplined investment approach, risk-conscious portfolio management, and our distinctive approach to telling the story of our portfolio.
Thank you for your ongoing support, trust, and investment in our flagship strategy.
As of 6/30/2024
| By Sector | BDVG |
|---|---|
| Finance | 17.2% |
| Consumer Discretionary | 4.9% |
| Information Technology | 17.6% |
| Communication Services | 0.0% |
| Health Care & Pharmaceuticals | 13.0% |
| Industrials | 15.9% |
| Consumer Staples | 13.8% |
| Real Estate | 1.3% |
| Utilities | 2.6% |
| Energy | 8.2% |
| Materials | 4.3% |
| Cash | 1.2% |
| Total | 100.0% |
| By Market Cap | BDVG |
|---|---|
| Small Cap | 0.0% |
| Mid Cap | 16.8% |
| Large Cap | 83.2% |
| Total | 100.0% |
| By Region | BDVG |
|---|---|
| US Equities | 93.1% |
| Developed International Equities | 6.9% |
| Emerging Market Equities | 0.0% |
| Total | 100.0% |