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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
|---|---|---|---|---|---|---|---|
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"Schafer Cullen's dividend-focused strategy outperformed value benchmarks in Q2 through strong international stock selection, particularly in Financials and Industrials. The managers maintain conviction in their value approach, citing attractive international valuations, expected USD weakness, and strong portfolio dividend growth of 8.6%."
Schafer Cullen's Global High Dividend ADR strategy delivered 8.6% net returns in Q2 2025, outperforming the MSCI ACWI Value Index by 280 basis points despite underperforming the broader MSCI ACWI Index. The strategy benefited from strong stock selection in Financials, Industrials, Consumer Staples and Healthcare, with standout performers including UniCredit, Johnson Controls, and Novartis. The managers maintain conviction in their value-oriented approach, noting that global value has outperformed growth across multiple time horizons despite remaining deeply out of favor on a 10-year basis. Key positioning includes overweight exposure to international equities and underweight to expensive US growth stocks. The outlook is supported by several catalysts including expected USD weakness, European fiscal expansion, and technological productivity gains. Portfolio companies delivered strong dividend growth of 8.6% year-over-year, with 84% increasing payments. The strategy targets high-quality companies with sustainable competitive advantages and strong balance sheets capable of delivering progressive dividend growth over full market cycles.
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Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.
Market Conviction
High conviction is evident in the managers' commitment to their value-oriented, dividend-focused approach despite recent underperformance versus growth. They provide detailed rationale for positioning decisions and express confidence in long-term strategy execution with specific catalysts identified.
Growth Outlook
The managers express cautious optimism about long-term opportunities, particularly in international markets and value stocks, while acknowledging elevated US market valuations and concentration risks. They see concrete catalysts for international outperformance but remain measured in their outlook.
Risk Appetite
The strategy maintains selective positioning with overweight international exposure and underweight to expensive US growth sectors. The approach is disciplined rather than aggressive, focusing on quality companies at reasonable valuations with some defensive characteristics through dividend focus.
Capital Deployment
The strategy made no new purchases during the quarter and sold Merck & Co., indicating slight capital harvesting. Cash position increased to 2.8% and the approach appears selective rather than aggressively deploying capital, suggesting modest de-risking activity.
Forward Guidance
The managers express confidence in their long-term strategy and identify specific catalysts including USD weakness, European fiscal spending, and value mean reversion. They maintain conviction in their positioning and expect continued outperformance over full market cycles.
Language Signal
Language is generally constructive with emphasis on attractive valuations, strong dividend growth, and positioning for long-term outperformance. However, the tone is measured and professional rather than enthusiastic, with balanced discussion of risks and opportunities.
Perceived Risk
The managers identify several significant risks including extreme market concentration, elevated valuations, persistent inflation, trade policy uncertainty, and US fiscal challenges. They acknowledge these systemic risks while maintaining confidence in their defensive positioning.
Opportunity Density
The managers see abundant opportunities in international markets, particularly in Europe, and across value stocks globally. They identify specific catalysts and sectors where attractive investments are available, suggesting a rich opportunity set outside expensive US growth stocks.
Time Horizon
The strategy explicitly emphasizes long-term investing with a 5-year holding period and focus on full market cycle outperformance. The approach prioritizes sustainable competitive advantages, progressive dividend growth, and patient capital deployment over short-term catalysts.
