The subject of Tweedy Browne came up today. It was a shareholder in a company I owned. I found that quite interesting, as Tweedy Browne was mentioned in the Intelligent Investor as a “superinvestor”.
Their performance measures are on page 304. Over an approximate 15 year period to 1983, the Dow was up 192% (all returns on a total basis), S&P500 238%, TBK (Tweedy Browne) Limited Partners up 936%, and TBK Overall (not sure what that means) up 1661%.
On an annualised basis, the S&P did 7.0%pa, whilst Tweedy Browne did 16% or 20%, depending on which fund. So they had a clear demonstration of outperformance over a long period.
The tale takes a turn for the worse, though. Tweedy Browne Value Fund publish their performance here . Since inception in 1993, their after tax annualised return was 6.69%, underperforming the MSCI World Index at 8.34%, and the S&P500 Index of 9.01%. Oh!
Over the last 20 years, their performance annualised at 4.76% against MSCI of 8.34%. Clearly, that’s a very disappointing performance for 20 years, a not insignificant timeframe.
The 10 year performance is even worse. 3.66% for Tweedy Browne, vs 10.62% for the index. So much for being superinvestors.
What should we make of all this? Well, if I wanted to be charitable, I could say that over the last decade, the 7%pa underperformance (that’s quite an underperfomance!) could be explained in part by the rip-roaring success of US growth stocks. Over 20 years, that excuse starts to wear a bit thin. Over the lifetime of the fund, which is extensive, their underperformance could be classed as pretty bad, with little in the way for execuses.