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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
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Buyside Digest is not affiliated with, and does not endorse, Bonhoeffer Capital Management. This analysis is provided for institutional research purposes only and is not investment advice.
"Bonhoeffer Fund lost 2.3% in 1H 2026 while continuing to rotate from slower-growth firms into durable compounders in distribution, community banks, and homebuilders. The portfolio targets deep value with growth, seeking 30-40% expected returns from firms trading at high single-digit forward earnings multiples."
Bonhoeffer Fund returned -2.3% net in 1H 2026 versus +9.1% for MSCI World ex-US and +10.1% for S&P 500. The manager continued selling slower-growth firms and purchasing durable, faster-growing firms in temporarily depressed sectors, particularly distribution, community banks, and homebuilders. The portfolio holds 49% in distribution firms like Ferreycorp, a Caterpillar dealer benefiting from copper mining demand driven by data centers and electric vehicles. Community banks including Northeast Bank and Private Bancorp of America focus on SBA lending with 15%+ earnings growth, though SBA loan growth has slowed due to Trump administration policy changes. Builders First Source is positioned to benefit from the recently passed ROAD to Housing bill providing regulatory relief for new construction. The portfolio has projected 19% earnings growth with 14.5% weighted average earnings yield. New investments target at least 30-40% expected returns combining growth and earnings yield. About 25% of the portfolio remains exposed to cyclical end markets, which the manager is actively diversifying. The manager replaced lagging investments like Asbury Automotive with higher-ROE firms like Meritz Financial, demonstrating disciplined portfolio management focused on sustainable returns on invested capital.
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