Building on the last two quarters of positive performance, the Van Arbor Funds had another great quarter with the Canadian Fund returning 14.55% (TSX 9.65%) and the World Fund returning 8.25% (World Index 7.82%). With three fourths of the year complete, both Funds remain the top ranked Canadian Equity and Global Equity Funds in Canada over multiple time frames. Even though 2009 has been a great year so far, we would like to highlight the fact that both Funds are one of the best performing mutual funds (all classes) in Canada over the last 12 months. We highlight this, because although we are enjoying a strong year to date on the upside, we also managed the downside last year just as well. So, while markets are almost returning to their value last fall, both Funds are up just over 40% from before the crash. Just another reason why having an actively managed portfolio that focuses on capital appreciation as much as capital preservation matters in a market that may not favor passive investing.
Read more…

What a difference a year makes. Last year, we collectively stared into the Abyss, watching our economy grind to a halt. Yet, as history has shown us over and over again, we picked ourselves up, dusted ourselves off, and business activity has resumed. Spending that was canceled, was really just postponed. Investment that was hesitant came back to life (at much cheaper prices). The financial system has been stabilized, people are beginning to catch up on postponed purchases, and businesses have begun to restock their inventories. Cyclical forces were held down too long, which is like pulling on a spring, eventually it needs to bounce back.

The last time Canada experienced such a severe drop off in the economy, was in the 1981-82 recession. The TSX index, over 12 months, fell 43%. Not unlike last year’s 50% decline that brought prices down to a six year low. What is often forgotten about the ’81-82 decline, was that the market went on to produce a stunning full recovery in only one year (see chart on page 3). While the circumstances are different between today and in ’81-82, the point is that recoveries happen much faster than people expect. Buying when the headlines are the bleakest historically is exactly when one should be buying. To borrow a quote from Warren Buffett: “be greedy when everyone is fearful and fearful when everyone is greedy”.

Read more…