Tweedy Browne American Value Broadens its Mandate: Not Enough Value in the U.S.

There was an interesting but unsurprising announcement this week from Tweedy Browne Company LLC, legendary value investors who’ve been very outspoken the past few years regarding the lack of attractively priced value oriented shares in U.S. markets. Not only are they changing the name of their flagship Tweedy Browne American Value Fund, they are also expanding the Fund’s mandate.

As of December 11, 2006, the Fund will be known as the Tweedy Browne Value Fund; “American” will be dropped. So will the Fund’s former mandate to invest “no less than 80% of its assets in US securities”. The newly named Tweedy Browne Value Fund will have the ability to invest up to 50% of the portfolio in non-US investments.

The gentlemen at Tweedy have never been shy about relaying their frustrations when their stringent investment process is unable to uncover value. We reported on a similar theme (Is Value Dead, Again?) in April 2005.

We’ve always believed in Tweedy Browne’s investment philosophy and process, and have been invested in this particular fund for years. That’s through years of good relative performance to go along with some challenging ones as well: years of low turnover, and relatively large cash positions (they are currently 12 % in cash) because their process told them pickings were slim.

Above all, we’ve always appreciated Tweedy’s management team’s honesty, and still believe in the merits of their investment philosophy, whether or not they feel the need to go outside US borders to find attractive opportunities.

As for the research staff at Cheap Stocks, we still believe that the markets we cover are inefficient, and there’s still value to be found for those willing to do some heavy lifting.

*The author has a position in the Tweedy Browne American Value Fund. This is neither a recommendation to buy or sell this security. All information provided believed to be reliable and presented for information purposes only.