| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 12.23% | 14.39% | 14.39% |
The Smead International Value Fund returned 14.39% in Q1 2026, significantly outperforming the MSCI EAFE Index's -1.24% decline. The fund's unconventional approach centers on a 38% allocation to oil stocks, capitalizing on historically backwarded futures curves and physical market tightness while oil companies remain reluctant to increase capex. Top performers included Cenovus Energy, Strathcona Resources, and Frontline, benefiting from geopolitical uncertainties and changing global commodity access priorities. The managers also maintain conviction in European banks, seeing enhanced capital returns through cost focus and first-ever buybacks despite 20-25% stock price declines. Key detractors included Pandora, facing unprecedented silver price inflation of 300%, and several European banks. The concentrated portfolio employs eight criteria to identify businesses with sustainable returns on capital across sectors including luxury, commodities, and tankers. The managers believe their unconventional positioning can deliver 10% annual returns outside the US, contrary to conventional investor beliefs.
Succeeding unconventionally by investing in out-of-favor sectors like energy and European banks where the managers see sustainable returns on capital that conventional investors are missing.
The managers expect to continue their unconventional approach, believing they can achieve 10% annual returns outside the US contrary to conventional investor beliefs. They remain focused on finding businesses with sustainable returns on capital across multiple sectors.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Apr 21 2026 | 2026 Q1 | BARC.L, CVE.TO, FRO, PNDORA.CO, SCR.TO, UCG.MI | concentrated, energy, European Banks, international, Unconventional, value | - | Smead International Value Fund delivered 14.39% returns in Q1 2026 through unconventional positioning: 38% in oil stocks capitalizing on supply tightness and 20%+ in European banks seeing enhanced capital returns. Despite detractors like Pandora facing silver price inflation, the concentrated approach targeting sustainable returns on capital across out-of-favor sectors continues outperforming conventional strategies. |
| Jan 21 2026 | 2025 Q4 | BARC.L, BAWG.VI, BKT.MC, CVE.TO, GLEN.L, OXY, PNDORA.CO, ROG.SW, SCR.TO, TGA.JO, TVE.TO, UCG.MI, WFG.TO | banks, energy, Europe, oil, value | - | Smead International Value Fund delivered 39% returns in 2025 by capitalizing on Europe's transition from story-driven to analytical investing. European banks drove performance through disciplined capital allocation and consolidation while energy positions benefit from constrained global supply dynamics. The concentrated value approach targets undervalued securities as markets shift toward logos-based decision making. |
| Oct 19 2025 | 2025 Q3 | AMGN, APA, AXP, BAWG.VI, BMPS.MI, CVE.TO, DHI, FRO, LEN, MAC, MEG.TO, MRK, NVR, PNDORA.CO, SCR.TO, SPG, UCG.MI, UMG.AS, WFG.TO | Banking, energy, Europe, Mergers, oil, Scale, value |
CVE SCR MEG UCG |
Smead International Value Fund outperformed in Q3 2025 on energy and banking strength, with MEG Energy in a bidding war creating significant value. The fund's thesis focuses on scaling old industries where experienced managers like Orcel at Unicredit and Waterous at Strathcona create value through disciplined acquisitions and cost synergies in established sectors. |
| Jul 15 2025 | 2025 Q2 | MEG.TO, SCR.TO | Canada, Capital Allocation, energy, M&A, oil, value |
SCR.TO MEG.TO |
Smead International Value is backing Adam Waterous, an unorthodox energy CEO focused on capital allocation over oil prices. His hostile takeover of MEG Energy through Strathcona Resources would create a 12-13% portfolio position. The manager believes Waterous is teaching the industry proper capital allocation, viewing oil companies as attractive businesses trading below invested capital despite strong returns. |
| Apr 14 2025 | 2025 Q1 | BARC.L, BRBY.L, CVE.TO, FRO, GLEN.L, MEG.TO, PNDORA.CO, SCR.TO, UCG.MI | banks, Canada, commodities, energy, international, value | - | Smead International Value Fund gained 5.69% in Q1 2025, employing contrarian value strategy focused on European banks and Canadian energy companies. Despite energy sector headwinds, the manager believes improved capital structures and capital scarcity in commodities will drive future returns. Portfolio positioned defensively like buying fur coats in July, waiting for winter conditions to benefit from discounted quality assets. |
| Jan 14 2025 | 2024 Q4 | 7270.T, BARC.L, BG.VI, BRBY.L, CVE.TO, FRO, G.MI, GLEN.L, IFP.TO, MEG.TO, PNDORA.CO, ROG.SW, SCR.TO, UCG.MI, VOW3.DE, WFG.TO, WHC.AX | Autos, banks, Buybacks, energy, Europe, Japan, value |
UCG.MI 7270.T |
Smead International Value Fund exploits market inefficiencies through companies executing aggressive share buybacks, particularly in Japan where first-ever buyback programs are emerging under corporate governance reforms. Despite Q4 underperformance, the fund sees significant value in depressed automotive names like Subaru trading near net cash, while energy headwinds and European policy uncertainty create near-term challenges. |
| Oct 15 2024 | 2024 Q3 | BARC.L, BAWG.VI, BKT.MC, BRK-A, CVE.TO, FRO, G.MI, MEG.TO, NWG.L, PNDORA.CO, SCR.TO, UCG.MI, WFG.TO | banks, Compounding, energy, Europe, returns, value | - | Smead International Value Fund underperformed in Q3 as energy holdings declined on oil price weakness, but European banks continued advancing toward fair value. The fund maintains its value approach focused on compound returns, holding discounted European banks and energy names believed to trade below mid-cycle levels despite near-term headwinds. |
| Jul 15 2024 | 2024 Q2 | CVE.TO, FRO, G.MI, IFP.TO, MEG.TO, OXY, PNDORA.CO, SCR.TO, UCG.MI, WFG.TO | banks, energy, Europe, Government Spending, inflation, technology, value | - | Smead International Value Fund declined 1.27% in Q2, outpaced by banks but hurt by Canadian energy and lumber holdings. The fund maintains focused exposure to oil and gas assets with long reserve lives while acknowledging AI's transformative potential but expecting cost declines. Managers warn of inflation risks from excessive government spending and position for an unknown future. |
| Apr 30 2024 | 2024 Q1 | BAWG.VI, CVE.TO, FRO, G.MI, IFP.TO, MEG.TO, OXY, PNDORA.CO, ROG.SW, TGA.JO, UCG.MI, WFG.TO, WHC.AX | Banking, energy, inflation, international, rates, value | ROG.SW | Smead International Value Fund returned 12.25% in Q1, driven by energy and banking positions. Managers argue higher natural rates are here to stay due to government spending and structural economic changes. They added Roche at crisis-era valuations while maintaining focus on undervalued energy and banking sectors producing attractive returns on capital. |
| Jan 16 2024 | 2023 Q4 | BAWG.VI, CVE.TO, FRO, GOOS.TO, IFP.TO, IWG.L, MEG.TO, OXY, PNDORA.CO, SCR.TO, UCG.MI, WFG.TO | banks, Change, Europe, Geopolitical, oil, value | BAWG.VI | Smead International Value Fund focuses on structural changes others miss: America's energy transformation enabling disciplined capital allocation, European banks with improved returns trading at deep discounts, and geopolitical tensions increasing tangible asset values. Despite Q4 underperformance, the fund delivered 15.23% annually by positioning in overlooked sectors while markets chase US momentum. |
| Oct 16 2023 | 2023 Q3 | BAWG.VI, BKT.MC, BMW.DE, CVE.TO, FRO, GOOS.TO, IFP.TO, MEG.TO, NXT.L, OXY, P911.DE, PAH3.DE, PNDORA.CO, SMWH.L, TGA.L, UCG.MI, VOW3.DE, WFG.TO, WHC.AX | Banking, Coal, Currency, energy, interest rates, international, value | - | Smead International Value Fund outperformed by 7.89% in Q3 2023, driven by energy holdings benefiting from oil's rise. The fund avoids interest rate risk through positioning in oil companies and European banks that benefit from higher rates. Coal assets provide extreme value despite ESG risks. Dollar strength creates currency headwinds for international markets. |
| Jul 15 2023 | 2023 Q2 | - | - | - | |
| Mar 31 2023 | 2023 Q1 | - | - | - | |
| Oct 25 2022 | 2022 Q3 | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q1 |
OilThe fund has 38% allocation to oil stocks including Cenovus Energy, Strathcona Resources, and others. The managers see an unconventional setup with historically backwarded futures curves showing physical market tightness never seen before, while oil companies remain unwilling to add rigs and capex despite high spot prices. |
Energy Commodities Capex Supply Backwardation |
European BanksThe managers took an unconventional stance on European banks, seeing focus on cost and capital returns including buybacks for the first time ever. They view potential for enhanced returns on capital through higher profits and less capital needed, plus potential M&A benefits to strip out operating expenses. |
Banking Capital Returns Buybacks ROE M&A | |
ValueThe fund employs a concentrated approach with eight criteria to find names where returns on capital can be sustained despite recent stock price declines. They focus on businesses with high returns on capital across multiple sectors including luxury, commodities, and tankers. |
Returns on Capital Concentrated Discipline Multiples | |
| 2025 Q4 |
EuropeThe firm is expanding European relationships and published research on European shareholder activism. They view Europe as an attractive alternative to expensive American markets and are building manager relationships in the region. |
Activism Shareholder Valuation Diversification Research |
OilOil markets disrupted by closure of Straits of Hormuz affecting 20% of global production. Prices surged from $70 to $119.50 before retreating to $90. Market may be tighter than commonly believed despite IEA projections of surplus. Oil represents cheapest major asset class globally, trading at near-record lows relative to gold. |
Crude Brent WTI Hormuz Supply | |
ValueManager emphasizes investing in controlled companies trading at significant discounts to NAV, with European holding companies showing discounts of 30-68%. The strategy focuses on securities mispricing where real value exists, contrasting with overvalued technology stocks. |
Discounts NAV Mispricing Undervalued Controlled | |
| 2025 Q3 |
OilThe fund owns MEG Energy which has been subject to a bidding war between Cenovus Energy and Strathcona Resources. Cenovus expects $400 million in annual cost savings from combining with MEG, representing about 45% of MEG's market cap. The oil business is seeing significant value creation through mergers and acquisitions as companies seek to scale operations. |
Oil Sands Energy Trading Exploration & Production Mergers Cost Synergies |
Regional BanksEuropean banks like Unicredit are demonstrating the value of scale through technology investments and cost savings. Banks can reduce operating costs of acquired institutions by leveraging shared platforms and agreements. The fund sees leaders like Andrea Orcel at Unicredit as unique capital allocators seeking to create value through acquisitions. |
European Banks Technology Platforms Cost Reduction Acquisitions Scale Benefits | |
| 2025 Q2 |
OilThe manager views oil companies as wonderful businesses producing low to mid-teens return on investment capital and trading at or below total invested capital. They focus on returns on capital rather than current spot oil prices, seeing significant opportunity in the sector when others are pessimistic. |
Oil Energy ROIC Capital Allocation Heavy Oil |
| 2025 Q1 |
OilThe fund holds significant positions in Canadian oil and gas producers in the tar sands. Energy has been a major detractor through mid-2023 to March 2025. The manager believes these businesses have much less risky capital structures than perceived, with companies like Meg Energy having less than 50% of cash flow in net debt. |
Canadian Oil Tar Sands WCS Cash Flow |
ValueThe manager uses a fur coat analogy to describe buying quality assets at discounted prices during unfavorable conditions. They believe they are purchasing exceptional companies at bargain prices, similar to buying winter coats in July at steep discounts. |
Bargain Prices Discounted Quality Assets Contrarian | |
| 2024 Q4 |
BuybacksThe letter extensively discusses share buybacks as a key investment strategy, comparing them to Pac-Man gobbling up shares. UniCredit reduced shares outstanding by 19.4% through buybacks, and Japanese companies including Subaru are implementing their first-ever buyback programs. |
Share repurchases Capital allocation Ownership transfer Tax efficiency Japanese corporates |
JapanJapan represents a significant opportunity due to corporate governance reforms under Abenomics. The Tokyo Stock Exchange's focus on ROE metrics and Japanese companies implementing first-ever buyback programs create attractive investment conditions. |
Abenomics Corporate governance ROE focus Tokyo Stock Exchange Subaru | |
ValueThe fund focuses on finding businesses trading below intrinsic value, particularly when Mr. Market becomes depressed. Subaru trades for roughly net cash on balance sheet, representing significant value opportunity. |
Undervaluation Net cash Depressed prices Intrinsic value Market inefficiency | |
AutosThe automotive sector faces very dark sentiment with companies like Volkswagen seeking drastic changes and Nissan potentially disappearing in mergers. This creates opportunities in cyclical businesses with attractive returns and strong balance sheets. |
Cyclical industry Dark sentiment Volkswagen Nissan Crossover SUVs | |
| 2024 Q3 |
ValueThe fund focuses on finding businesses that produce strong double-digit returns where investors are not overpricing them. They seek companies trading at significant discounts to economic value, exemplified by their European bank holdings which continue to be appraised at substantial discounts despite improving fundamentals. |
Value investing Discount Economic value Book value Undervalued |
BanksContinental European banks continue to provide ample opportunities with robust deposit share, disciplined loan growth, and value-accretive capital allocation driving higher returns on capital. The fund believes these banks remain significantly undervalued despite improving fundamentals, with stigmas from past sovereign debt crisis still affecting investor perception. |
European banks Return on equity Capital allocation Deposit share Book value | |
OilEnergy names were pressured during the quarter as crude oil prices declined on new supply fears and sluggish demand growth. The fund believes the market significantly underpriced geopolitical risk premium in the near term, while long-term rampant government deficit spending and emerging market growth suggest current depressed prices are well below mid-cycle levels. |
Crude oil Energy Geopolitical risk Supply Mid-cycle | |
| 2024 Q2 |
OilThe fund is focused on the reserve life of oil and gas assets in places like Canada with investments like MEG Energy, Cenovus and Strathcona. In a world that is far less interested in investing in energy compared to AI, they believe that the assets' lives need to match the current long lead time capital cycle. |
Oil Sands Energy Canada Reserve Life Capital Cycle |
AIThe managers acknowledge AI will produce huge volume of use but believe the price per unit will decline like every other technology. They are pragmatists who agree AI will change lives like the internet did, but note that costs declined massively over 24 years while products improved. |
Technology Pricing Adoption Internet Cost Decline | |
InflationThe managers believe there is still an unknown future for inflation despite current investor beliefs that inflation is at bay. They reference Warren Mosler's view that current 5%+ deficits represent drunken sailor levels of government spending, and when deficit money floods into an economy operating at capacity, it pushes up the price level. |
Government Spending Deficits MMT Price Level Capacity | |
| 2024 Q1 |
EnergyThe fund holds significant positions in energy companies including Meg Energy, Cenovus Energy, and Occidental Petroleum. Coal companies faced pressure from weakened demand factors including China's economic growth and increased coal and gas stock availability. |
Oil Coal Natural Gas Energy Trading Oil Sands |
BankingUnicredit SPA was the fund's biggest contributor to performance for the quarter. The managers view banking as having low valuations and producing attractive returns on capital, representing good recipes for common stock investing. |
Regional Banks European Banks Value Returns on Capital | |
RatesThe letter extensively discusses higher natural rates, arguing that the Federal Reserve and central banks will have difficulty tackling inflation due to government spending and structural economic changes. The managers believe investors are praying for low interest rates but will have trouble finding them. |
Interest Rates Federal Reserve Monetary Policy Natural Rates | |
InflationGovernment spending to fight wars has historically caused inflation, and the pandemic caused war-like spending. The sheer size of federal largesse is making it difficult for central banks to counteract pricing issues with tighter monetary policy. |
Government Spending Federal Debt Pricing War Spending | |
| 2023 Q4 |
OilAmerica transformed into an OPEC-sized producer of oil and gas products over the last 20 years. American producers decided to quit drilling new holes in spring 2020, leading to explosive returns for investors as stock buybacks and dividends rained in from operating cash flow. Oil and gas producers are now being rational with their capital allocation. |
Energy Production Capital Allocation Dividends Buybacks |
BanksEuropean banks traded at three to four times book value in the 2000s but descended to massive discounts during the pandemic after recognizing asset problems. Banking is now a higher return business than in the 2010s with return on equity running at high single digits to high teens percentages, but multiples remain very depressed as investors are disinterested. |
European Banks Book Value Return on Equity Valuation Multiples | |
GeopoliticalRussia has decided to take a direct approach to picking fights in Ukraine, unprecedented for a former world power. Putin is playing a long game similar to the North Vietnamese army, knowing democracies eventually become tired and move to other issues. In a world teetering on direct wars, tangible assets are showing their teeth. |
Russia Ukraine Conflict Tangible Assets War | |
| 2023 Q3 |
RatesThe fund views rising interest rates as a major risk affecting all asset classes, not just bonds. They believe the 30-year Treasury hitting 5% creates significant interest rate risk that most investors underestimate. The fund seeks to avoid this risk through specific positioning choices. |
Interest Rates Treasury Fed Monetary Policy Cost of Capital |
OilOil provides protection from interest rate risk as it has moved higher while the Fed tightened in 2023. The fund owns multiple energy positions including Occidental Petroleum, MEG Energy, and Cenovus Energy. Oil's correlation with the dollar is historically abnormal but currently beneficial. |
Energy Crude Oil Commodity Risk Dollar Correlation Energy Transition | |
CoalCoal assets are extremely cheap due to multiple risks including political, regulatory, and duration risk from being considered undesirable in the Western world. The fund owns Whitehaven Coal and Thungela Resources, which trade below book value with over 20% ROE and net cash positions. |
Thermal Coal ESG Risk Political Risk Regulatory Risk Value | |
DollarThe US dollar strengthened significantly in Q3 2023, with the British pound losing 4%, euro losing 4%, and Canadian dollar losing 3%. This dollar strength puts pressure on non-US economies by making oil more expensive and helps American purchasing power while hurting the rest of the world. |
Currency Exchange Rates Global Trade Purchasing Power Economic Impact |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Oct 19, 2025 | Fund Letters | Cole Smead | CVE | Cenovus Energy Inc. | Energy | Oil & Gas Exploration & Production | Bull | - | capital allocation, energy, merger, oil, synergies, Value | Login |
| Oct 19, 2025 | Fund Letters | Cole Smead | SCR | Strathcona Resources Ltd. | Financials | Oil & Gas Exploration & Production | Bull | - | acquisition, Canada, growth, merger, oil, synergies | Login |
| Oct 19, 2025 | Fund Letters | Cole Smead | MEG | MEG Energy Corp. | Industrials | Oil & Gas Exploration & Production | Bull | - | Canada, energy, M&A, oil, synergies, value investing | Login |
| Oct 19, 2025 | Fund Letters | Cole Smead | UCG | Unicredit S.p.A. | Financials | Banks | Bull | - | banking, consolidation, Digitalization, dividends, efficiency, Europe | Login |
| Jun 30, 2025 | Fund Letters | Smead International Value Fund | MEG.TO | MEG Energy Corp | Energy | Oil, Gas & Consumable Fuels | Bull | Toronto Stock Exchange | capital allocation, contrarian, energy, Heavy Oil, Hostile Bid, M&A Premium, Oil sands, takeover target | Login |
| Jun 30, 2025 | Fund Letters | Smead International Value Fund | SCR.TO | Strathcona Resources Ltd | Energy | Oil, Gas & Consumable Fuels | Bull | Toronto Stock Exchange | Bitumen, capital allocation, contrarian, Counter-cyclical, energy, Heavy Oil, M&A, Oil sands, Return on capital | Login |
| Dec 31, 2024 | Fund Letters | Smead International Value Fund | UCG.MI | UniCredit SpA | Financials | Banks | Bull | Borsa Italiana | capital allocation, Depressed Valuations, European Banking, financial leverage, ROE improvement, Share Buybacks, value creation | Login |
| Dec 31, 2024 | Fund Letters | Smead International Value Fund | 7270.T | Subaru Corporation | Consumer Discretionary | Automobile Manufacturers | Bull | Tokyo Stock Exchange | brand loyalty, capital allocation, Crossover SUVs, Free Cash Flow, Japanese Automotive, net cash, Share Buybacks, value opportunity | Login |
| Mar 31, 2024 | Fund Letters | Smead International Value Fund | ROG.SW | Roche Holdings | Health Care | Pharmaceuticals | Bull | SIX Swiss Exchange | biotechnology, diagnostics, healthcare, pharmaceuticals, pipeline, ROE, Swiss, Value | Login |
| Dec 31, 2023 | Fund Letters | Smead International Value Fund | BAWG.VI | Bawag Group AG | Financials | Banks | Bull | Vienna Stock Exchange | Austrian Bank, Book Value, capital allocation, contrarian, European Banking, Mid-Teens Returns, turnaround, Vienna | Login |
| Dec 31, 2023 | Fund Letters | Smead International Value Fund | - | Frontline Plc | Energy | Oil & Gas Storage & Transportation | Bull | Oslo Stock Exchange | Conflict, Energy Transportation, geopolitical, Maritime, Norway, Oil Tanker, Shipping, Tangible assets | Login |
| TICKER | COMMENTARY |
|---|---|
| CVE.TO | Our best-performing stocks in the quarter were Cenovus Energy (CVE CN). The fund's shareholders are unconventional in energy holdings compared to other investors with oil stocks that include Cenovus Energy (CVE CN). |
| SCR.TO | Our best-performing stocks in the quarter were Strathcona Resources (SCR CN). The fund's shareholders are unconventional in energy holdings compared to other investors with oil stocks that include Strathcona Resources (SCR CT). |
| FRO | Our best-performing stocks in the quarter were Frontline (FRO NO). Our energy-related names, such as Frontline, have disproportionately gained from the geopolitical uncertainties and are really an expression of the market's realization that the global order is changing and access to essential commodities will be a priority going forward. We are witnessing a return to a high level of returns on capital that we haven't seen for years in Frontline (FRO NO) in the oil tanker business. |
| PNDORA.CO | Our biggest detractors were Pandora (PNDORA DC). Pandora has faced an unprecedented input cost headwind, with silver prices rising approximately 300% in under a year, a move of a magnitude the company has not encountered in its history. We continue to monitor management's progress in reducing silver exposure on a go-forward basis and remain confident that margins will recover toward historical levels over time. As unconventional investors, we continue to use our discipline to find new names to see if their returns on capital can be sustained despite the perception of the recent stock price declines with names like Pandora (PNDORA DC) in jewelry. |
| BARC.L | Our biggest detractors were Barclays (BARC LN). There has been a 20-25% decline in stock prices of these banking businesses in the first quarter of 2026 across Barclays (BARC LN). |
| UCG.MI | Our biggest detractors were Unicredit (UCG IM). There has been a 20-25% decline in stock prices of these banking businesses in the first quarter of 2026 across Unicredit (UCG IM). |
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|---|---|---|---|---|---|
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| Ticker | Put/Call | Amount Sold | Shares Sold | % Change | Weight % | Status |
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| Industry | Prev Quarter % | Current Quarter % | Change |
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| No industry data available | |||
