Global Masters Fund Limited Overview
Global Masters Fund Limited (GFL) is a Listed Investment Company with nearly two decades of performance history, trading on the ASX under the ticker “GFL.” The fund has a concentrated position in Berkshire Hathaway (BRK), which accounts for over 60% of its portfolio value. This substantial allocation reflects our belief in Berkshire Hathaway as an excellent vehicle for gaining exposure to quality growth stocks in the U.S. market, benefiting from the renowned stock selection of Warren Buffett, Charlie Munger, and their team.
At the time of writing, BRK trades on the NYSE at approximately US$469,645. While this may seem expensive on an absolute basis, many investors consider it undervalued, as it currently trades at a significant discount to its Net Asset Value (NAV).
Investors can purchase BRK shares to access the U.S. market and leverage the stock-picking acumen of Warren Buffett and his team, all while benefiting from the stock’s current discount to its NAV. For those with a medium to long-term investment horizon, acquiring Berkshire Hathaway shares at this discount presents a compelling investment opportunity.
Doubling Your Discount
For those interested in maximizing this opportunity, there is a way to effectively double the discount on your BRK exposure: by purchasing GFL shares. By doing so, you gain access to discounted Berkshire Hathaway exposure, as GFL itself trades at a discount to its own NAV.
As of December 31, 2022, the NAV of GFL was $3.15 per share, while the corresponding share price was $2.23. This means investors can acquire discounted Berkshire Hathaway shares at an even further discount through GFL, enhancing overall value.
Strong Performance
The Global Masters Fund has consistently outperformed the MSCI Index and the Australian All Ordinaries Index over 3, 5, and 10-year periods, as well as since its inception in 2006. Given that a significant portion of its portfolio has historically been Berkshire stock, this strong performance is not surprising.
Why Choose Global Masters Fund?
Global Masters Fund Ltd (GFL) was established for investors seeking long-term capital growth through investments in high-quality global assets. Berkshire Hathaway Inc., a New York Stock Exchange-listed investment company led by the legendary Warren Buffett, is the fund’s principal holding.
The primary source of value creation for Global Masters shareholders is the capital appreciation of their shares, as Berkshire Hathaway does not pay dividends. Any excess cash received by the fund, after covering expenses, is reinvested to enhance shareholder value.
The GFL Board believes that Global Masters’ international investments provide essential currency diversification. As such, exposure to the Australian dollar versus the U.S. dollar is not hedged, with the Board monitoring the resulting portfolio performance.
Diverse Holdings
The Global Masters portfolio also includes other high-quality growth companies listed on various stock exchanges, including the London Stock Exchange and the Australian Stock Exchange.
Table 1: Source Global Masters Fund
Performance Highlights
As previously mentioned, the investment portfolio has demonstrated robust performance, consistently surpassing relevant indices over various time frames.
Table 2: Source Global Masters Fund
Discount/Premium to NAV
With a share price of $2.23 as of December 31, 2022—well below its NAV of $3.15—GFL is currently trading at a notable discount. This offers a compelling entry point to the investment portfolio.
As with all Listed Investment Companies (LICs), often referred to as Closed Ended Funds in other markets, there are no guarantees about future share price movements in relation to NAV. However, it is worth noting that the current discount is among the deepest since the fund’s listing in 2006, representing an excellent opportunity to gain discounted exposure to Berkshire Hathaway shares.
Benefits of Investing in GFL
GFL does not charge management or performance fees on the passive portion of the portfolio, which currently constitutes over 80%. It allocates part of the portfolio to Flagship Investments Ltd (ASX: FSI), with dividends from FSI covering the fund’s operating expenses.
Additionally, FSI itself does not impose management fees for its services, making GFL a low-cost method to gain substantial exposure to Berkshire Hathaway at a significant discount.
With low portfolio turnover, the Global Masters Fund is categorized as a buy-and-hold investment. Investors appreciate the low-cost, low-turnover approach to global investing, starting with discounted exposure to Berkshire Hathaway and supplemented by select active positions.
Ready to take advantage of discounted exposure to Berkshire Hathaway and enhance your investment portfolio? Contact us today to learn more about how you can invest strategically and benefit from long-term growth. Let’s start your journey toward financial prosperity together!
