Ivy Cundill Global Value Fund


Market Sector Update

  • Geopolitical threats and concerns heavily influenced stock performance during the quarter, with none more significant than the ongoing trade war concerns initiated by the Trump Administration, particularly with China. There is no doubt the U.S. wants serious and material concessions.
  • Economic data released during the quarter pointed to steady growth in European gross domestic product (GDP), though at a slower pace than last year. In Japan, a positive surprise on industrial production and inflation data provided comfort following sluggish GDP growth in the first quarter.
  • In Europe, a governing coalition between the League and the Five Star Movement was formed in Italy, following two months of political impasse. Despite much anti-Euro rhetoric during the election campaign, the new administration reaffirmed the country’s commitment to the single currency once in office.
  • As anticipated, the U.S. Federal Reserve (Fed) raised rates in June and we expect two additional rate increases in 2018.

Portfolio Strategy

  • The Fund outperformed the benchmark over the quarter primarily due to strong stock selection in the consumer discretionary and financials sectors.
  • Top individual contributors to performance included Discovery, Inc., Chesapeake Energy Corp. and Twenty-First Century Fox, Inc. Class A.
  • On the other hand, top detractors included Liberty Global, Inc., Series A, RPC, Inc. and Bank of America, Corp.
  • At quarter end, the Fund had 57.4% in domestic equities, 37.7% in foreign equities, 4.7% in preferred stock and 0.3% in cash and cash equivalents.


  • We do not believe an Italian exit from the eurozone is likely in the near-to-medium term as the majority of the Italian population is pro-euro.
  • Recent U.K. service sector growth improved in June, and we do not see a high risk of recession in the U.K.
  • In the energy markets, global inventories have steadily dropped to below five-year average levels. We see robust demand, coupled with likely declines in Venezuela and Iran production as well as pipeline bottle-necks in the Permian, to be supportive of crude prices despite increased production from Saudi Arabia and Russia in the near term.
  • As always, we continue to search the globe for stocks trading at a significant discount to their intrinsic value.

The opinions expressed are those of the Fund’s managers for Class I shares and are not meant as investment advice or to predict or project the future performance of any investment product. The opinions are current through June 30, 2018, are subject to change at any time based on market and other current conditions, and no forecasts can be guaranteed. This commentary is being provided as a general source of information and is not intended as a recommendation to purchase, sell, or hold any specific security or to engage in any investment strategy. Investment decisions should always be made based on an investor’s specific objectives, financial needs, risk tolerance and time horizon. Past performance is not a guarantee of future results.

Top 10 equity holdings as a percent of net assets as of 06/30/2018: Wells Fargo & Co. 6.0%, Bank of America Corp. 5.9%, Citigroup, Inc. 5.8%, Bristow Group, Inc. 4.8%, Chesapeake Energy Corp., 5.750%, Series A Cumulative 3.8%, Liberty Global, Inc., Series A 3.2%, Baidu.com, Inc. ADR 3.1%, International Business Machines Corp. 3.0%, Hitachi Ltd. 3.0% and Samsung Electronics Co. Ltd. 2.8%.

Risk factors: The value of the Fund’s shares will change, and you could lose money on your investment. An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. International investing involves additional risks including currency fluctuations, political or economic conditions affecting the foreign country, and differences in accounting standards and foreign regulations. These risks are magnified in emerging markets. The value of a security believed by the Fund’s manager to be undervalued may never reach what the manager believes to be its full value, or such security’s value may decrease. Not all funds or fund classes may be offered at all broker/dealers. These and other risks are more fully described in the Fund’s prospectus.