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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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Tweedy, Browne International Value Fund 2026 Q3 Investor Letter | Buyside Digest

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Primary Source Intelligence • Q3 2026 Letter Analysis

Tweedy, Browne International Value Fund Quarterly Analysis

Buyside Digest is not affiliated with, and does not endorse, Tweedy, Browne International Value Fund. This analysis is provided for institutional research purposes only and is not investment advice.

Fund Returns

QTD+2.09%

YTD+12.95%

Annualized+8.86%

Positioning StanceCAUTIOUS

Market CapAll Cap

GeographyEurope, Asia, US

Digest Analysis

Quick Take

"Elevated US market valuations and heavy artificial intelligence capital expenditures signal a sea change toward price-sensitive investing. Durable international enterprises with conservative balance sheets and robust free cash flow offer superior risk-adjusted return potential."

Executive Summary

During the third quarter of 2026, the Tweedy, Browne International Value Fund generated a total return of 2.09% net of fees, outpacing its primary international benchmark, the MSCI EAFE Index (in USD), which returned 0.81%. Year-to-date through September 30, 2026, the Fund advanced 12.95% net of fees compared to 10.33% for the index. The portfolio closed the quarter with 94.61% of net assets invested across 90 equity issues, supported by 4.62% in cash, Treasuries, and money market funds, alongside 0.77% in currency hedges. Portfolio turnover remained disciplined at 13% over the trailing 12-month period. From a macroeconomic perspective, the manager observes gathering signs of a structural regime transition driven by higher cost of capital and historically stretched equity valuations in the United States. While broad equity indices advanced on enthusiasm surrounding artificial intelligence, management highlights mounting risks regarding the return on invested capital for massive AI infrastructure spending, elevated margin borrowing, and ambitious corporate earnings estimates. Against this backdrop, market participation has begun to broaden toward attractively priced international companies possessing durable competitive advantages, healthy balance sheets, and substantial free cash flow. Portfolio attribution reflected positive performance across industrial and information technology holdings, notably CNH Industrial, Computacenter, DHL Group, TotalEnergies, and Rubis, whereas Ionis Pharmaceuticals, Samsung Electronics, and Nestlé detracted. During the quarter, the Fund initiated new equity positions in Aptiv, LVMH, Minth Group, Puregold Price Club, and Toyota Motor, each trading at conservative discounts to intrinsic value. Capital was harvested by trimming Computacenter following strong price appreciation and completely exiting positions including Teleperformance, Kuraray, and LX Holdings.

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Institutional Meta Strategy

Meta Strategy Gauges

Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.

Signal Matrix

Market Conviction

52%

CautiousHigh

Moderate (52%)

The portfolio remains intentionally diversified across 90 equity issues with top positions like DHL Group and United Overseas Bank capped around 3.8% to 4.1%. Management adheres to broad diversification and risk dispersal rather than highly concentrated holding sizes.

Growth Outlook

38%

BearishBullish

Neutral (38%)

Commentary highlights multiple gathering clouds including extreme US equity valuations, high margin debt, and questionable economic returns on artificial intelligence infrastructure. This caution is moderately tempered by a constructive view on international value opportunities.

Risk Appetite

60%

DefensiveAggressive

Balanced (60%)

Capital remains largely committed with 94.61% equity exposure and a low 4.62% cash allocation. However, risk appetite is kept in check through selective quality screening and selective currency hedging rather than leveraged or aggressive speculative positioning.

Capital Deployment

55%

De-riskingDeploying

Net Neutral (55%)

Cash reserves stood stable at 4.62%, indicating balanced net deployment. Capital recovered from the complete liquidation of Teleperformance and trimming of Computacenter was systematically redeployed into newly initiated positions.

Forward Guidance

65%

CautiousExpansionary

Expansionary (65%)

The investment committee maintained an active deployment posture, initiating multiple new equity positions including Aptiv, LVMH, and Toyota Motor. Cash generated from selective trims in extended holdings was actively recycled into newly uncovered value opportunities.

Language Signal

48%

BearishBullish

Balanced (48%)

Narrative framing balances recurrent risk terminology such as wall of worry, complacency, and historical extremes against constructive evaluations of intrinsic value discounts, durable competitive moats, and sound balance sheets.

Perceived Risk

68%

Low RiskElevated

Elevated Risk (68%)

Management explicitly details substantial systemic vulnerabilities, focusing on rising cost of capital, persistent inflation, escalating sovereign debt, and potential capital destruction from aggressive AI infrastructure spending.

Opportunity Density

68%

ScarceAbundant

Abundant (68%)

While finding attractive risk-adjusted entry points in the US is viewed as difficult due to extreme valuations, the team reports a rich and widening assortment of mispriced opportunities across international developed and emerging markets.

Time Horizon

85%

Short-TermLong-Term

Decade+ (85%)

A modest 12-month turnover rate of 13% reinforces the fund's multi-year holding philosophy. The investment committee explicitly emphasizes compounding capital over long horizons while disregarding quarterly benchmark noise.