Sprucegrove Global Equity Strategy

STRATEGY OVERVIEW

MISSION

To provide investment management advice predominantly in the specialized area of global equity management.

OBJECTIVE

To provide our clients with above average investment performance and superior service over the long-term.

PHILOSOPHY

Our strategy employs a value approach to the management of equities. It emphasizes long-term investment and it focuses on the selection of individual securities using a bottom-up, research driven approach. Country and sector exposures are a residual of this stock-selection process.

Fund holdings must meet our standards of investment quality including a history of above average financial performance, a secure financial position, reputable management, and a growth opportunity in terms of sales, earnings, and share price. Our valuation criteria includes normalized price earnings multiple, price-to-book and dividend yield.

METHODOLOGY

Value approach using a bottom-up, stock selection process with an emphasis on owning quality companies at attractive valuations.

At a Glance (as at June 30, 2024)

Total AUM (Millions, USD)
Canadian Clients $ 786
U.S. Clients $ 67
TOTAL $ 853
Mandate Global Equities
Inception March 31, 2020
Primary Benchmark MSCI World Index (Net)

Investment Vehicles

U.S. Investors

Commingled Funds

ERISA

Non-ERISA

CIT (ERISA)

Separate Accounts

Canadian Investors

Pooled Funds

Pension

Non-Pension

Separate Accounts

Rest of World

Separate Accounts

PERFORMANCE

ANNUALIZED PERFORMANCE

Representative Account: Sprucegrove Global CIT
As at June 30, 2024 (% change in USD)

Representative Account (Gross)
Q2 2024
(2.34)
1 Year
4.97
3 Years
0.26
4 Years
10.97
Since Inception
8.71
Representative Account (Net)
Q2 2024
(2.42)
1 Year
4.57
3 Years
(0.12)
4 Years
10.57
Since Inception
8.32
MSCI World Index
Q2 2024
2.63
1 Year
20.19
3 Years
6.86
4 Years
14.13
Since Inception
13.89
MSCI World Value Index
Q2 2024
(1.20)
1 Year
13.90
3 Years
5.57
4 Years
12.87
Since Inception
10.15

ANNUAL PERFORMANCE

Representative Account: Sprucegrove Global CIT
(% change in USD)

Representative Account (Gross)
2021
13.56
2022
(13.09)
2023
15.19
Representative Account (Net)
2021
13.17
2022
(13.43)
2023
14.77
MSCI World Index
2021
21.82
2022
(18.14)
2023
23.79
MSCI World Value Index
2021
21.94
2022
(6.52)
2023
11.51

DATA & STATISTICS

Representative Account: Sprucegrove Global CIT
Read Full Disclosure

REGIONAL ALLOCATION

As at June 30, 2024

REPRESENTATIVE ACCOUNT
INDEX
22
Number of Countries
23
71
Number of Holdings
1,430
142,440
Average Market Capitalization
53,935

SECTOR ALLOCATION

As at June 30, 2024

Energy
2.2
4.3
Materials
4.4
3.7
Industrials
21.4
10.7
Consumer Discretionary
9.7
10.2
Consumer Staples
3.4
6.3
Health Care
19.1
11.8
Financials
21.9
14.8
Information Technology
8.4
25.9
Communication Services
6.7
7.8
Utilities
2.4
Real Estate
2.1
Cash
2.9

Top 10 holdings

As at June 30, 2024

COMPANY
% of Net Assets
Markel
4.1%
Berkshire Hathaway
3.8%
Qualcomm
3.6%
T. Rowe Price
3.2%
Walt Disney
3.2%
Henry Schein
3.0%
Cullen/Frost Bankers
2.8%
RTX Corporation
2.7%
Roche Holding
2.6%
Biogen
2.6%
Total
31.6%

85.9%

Top 50 Holdings
% of Assets

CHARACTERISTICS

Since Inception to June 30, 2024

Benchmark
Representative Account
MSCI World Index (Net)
MSCI World Value Index (Net)
Alpha
(4.29%)
N/A
N/A
Beta
1.00
N/A
N/A
Information Ratio
(0.73)
N/A
N/A
Sharpe Ratio
0.33
0.64
0.44
Standard Deviation
19.50%
18.25%
18.03%
Tracking Error
7.07%
N/A
N/A
Upside Market Capture
88.73%
N/A
N/A
Downside Market Capture
102.68%
N/A
N/A

93%

Active Share

15.08%

Long-Term
Average Portfolio Turnover

Management

Shirley Woo
BA, CFA
Director & Portfolio Manager
Shirley Woo
BA, CFA
Director & Portfolio Manager
Shirley has over 30 years investment experience, all with Sprucegrove and its predecessor firm. She is passionate about ensuring the legacy of Sprucegrove by championing an unwavering focus on quality investments and mentoring the investment team. Shirley is a founding shareholder of Sprucegrove, serving in 1993 as an Assistant Portfolio Manager. In 2001, she was appointed Portfolio Manager and Co-Lead of International Equities and Co-Lead of Global Equities in 2018. She has been on Sprucegrove’s Business Management Committee and Board of Directors since 2013. Shirley is a CFA Charterholder and earned her Bachelor of Arts degree from the University of Toronto.
Arjun Kumar
HBA, MBA, CFA
CEO & Portfolio Manager
Arjun Kumar
HBA, MBA, CFA
CEO & Portfolio Manager
As a leader at Sprucegrove, Arjun serves to shape the investment team’s individual and collective expertise, deliver exceptional portfolio management and provide valuable perspectives to clients and consultants. Joining Sprucegrove in 2002 as an Investment Analyst, he was promoted to Senior Investment Analyst in 2010, Assistant Portfolio Manager in 2013 and Portfolio Manager and Co-Lead of International Equities in 2014 and Global Equities in 2018. He has been on Sprucegrove’s Business Management Committee since 2015 and Board of Directors since 2017. Arjun is a CFA Charterholder and earned both his Bachelor of Arts degree and MBA from the University of Toronto.

GIPS Disclosures

GIPS Compliance

Sprucegrove Investment Management Ltd. (Sprucegrove) claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. Sprucegrove has been independently verified for the years 1985 through 2020. The Global – Canadian/U.S. Clients composite has been examined for the years 1985 through 2020. The verification report is available upon request.

Definition of the Firm

Sprucegrove Investment Management Ltd. (“Sprucegrove” or the “Firm”) is an investment adviser registered with the U.S. Securities and Exchange Commission (SEC) and registered as a Portfolio Manager in most provinces in Canada.

Sprucegrove is an independent investment management firm that is not affiliated with any parent organization. Sprucegrove manages fully discretionary accounts for fee paying clients and is located in Toronto, Ontario. The firm was

founded in 1993 by the global portfolio management team, formerly at Confederation Life of Canada. Sprucegrove has been managing international equity mandates since 1985.

Sprucegrove Investment Return

Investment performance returns exclude any investment management fees paid by the investor. Investment advisory fees will reduce stated returns. Performance returns are calculated on a time weighted, total return basis which

includes dividend net of withholding taxes and interest income, realized and unrealized gains or losses, transaction costs and other expenses, if any. For example, a 70 basis point fee applied to an investment with an annual gross return of 10% will provide a compounded net return of 9.24% after 1 year and a 55.53% return after 5 years. Valuations are computed and performance is reported in US dollars.

Gross-of-fees returns are presented before management and custodial fees but after all trading expenses. Composite and benchmark returns are presented gross of non-reclaimable withholding taxes. [Composite net-of-fees returns are

calculated by deducting 5.83 bps from the monthly gross composite return.

Possibility of Loss

Investors should be aware that market conditions affect performance and that investment programs carry with them the possibility of loss. It should not be assumed that investments made in the future will be profitable or will equal any results shown in this document

Composite and Benchmark

Composite Description – Sprucegrove’s composites are composed of all fee-paying, discretionary accounts greater than $5 million managed by Sprucegrove in this investment style and mandate. This was changed from a minimum market value of $15 million in July 2016.

The Sprucegrove Global U.S. Clients Composite was created in February 2020 and represents an equity strategy managed for U.S. clients that utilizes a value approach to invest in companies domiciled in developed and emerging market countries. The maximum holding in emerging markets is 10%. The performance of the Composite is stated in U.S. dollars and is net of non-reclaimable withholding taxes on dividends, interest income and capital gains where applicable. Sprucegrove’s policies for valuing portfolios, calculating performance and preparing compliant presentations are available upon request.

The Sprucegrove Global Canadian Clients Composite was created in July 1992 and represents an equity strategy managed for Canadian clients that utilizes a value approach to invest in companies domiciled in developed and emerging market countries. The maximum holding in emerging markets is 10%. The performance of the Composite is stated in U.S. dollars and is net of non-reclaimable withholding taxes on dividends, interest income and capital gains where applicable. Sprucegrove’s policies for valuing portfolios, calculating performance and preparing compliant presentations are available upon request. Prior to December 31, 2011, the name of the composite was Global Pooled and Separate Accounts Combined – Canadian Clients. Prior to Sprucegrove commencing operations in 1993, the Sprucegrove team managed a separate Global Canadian client account at Confed, from its inception in 1992 until the portfolio was acquired by Sprucegrove in 1994. Accordingly, the performance of the account from 1992 to 1994 is linked to its continuation at Sprucegrove. The investment mandate and approach did not change during this transition.

The Morgan Stanley Capital International World Net Index (MSCI World) is presented as the benchmark for investment performance. The Index is the arithmetical average, weighted by market value of the performance of companies representing the stock markets of North America, Europe, Australasia, and the Far East. Index returns assume reinvestment of dividends. The MSCI World Index includes a selection of stocks from 23 developed markets and is designed to measure the equity performance of those developed markets. (Any reference to MSCI World data is provided for comparative purposes only and may not be used in any way without the express permission of MSCI).

Global Vehicles Available in the US/Canada

Mandate Vehicles Available Valuation Custodian
Global Equities Sprucegrove Global CIT Daily Brown Brothers Harriman
Sprucegrove Global Pooled Fund Daily RBC Investor Services
Separate Account Client Determines Client Determines

Fee Schedules

Pooled Fund Accounts Assets Managed Rate
First $5,000,000.00 0.70%
Next $10,000,000.00 0.65%
Next $25,000,000.00 0.55%
Next $35,000,000.00 0.50%
Next $225,000,000.00 0.25%
Balance 0.20%
CIT Accounts Invested Plan Assets Rate
Class A $0 – $15 million 0.70%
Class B $15 – $50 million 0.60%
Class C $50 – $100 million 0.55%
Class D $100 – $400 million 0.35%
Class E Over $400 million 0.25%
Separate Accounts Assets Managed Rate
First $25,000,000.00 0.70%
Next $25,000,000.00 0.60%
Next $25,000,000.00 0.50%
Next $225,000,000.00 0.25%
Balance 0.20%

Calculations

Composite dispersion is calculated as the difference in percentage between the highest and lowest annual portfolio return in the composite.

Internal dispersion is calculated using asset-weighted portfolio returns.

The three-year annualized standard deviation measures the variability of the composite gross returns and the benchmark returns over the preceding 36-month period.

Policies for valuing investments, calculating performance, and preparing GIPS reports are available upon request.

Further Information

For further information, please contact your client service representative.

GIPS® is a registered trademark of CFA Institute. CFA Institute does not endorse or promote this organization, nor does it warrant the accuracy or quality of the content contained herein.

Mandate Vehicles Available Valuation Custodian
International Equities Sprucegrove International Representative Account 1 Daily JP Morgan Chase Bank
Sprucegrove International Representative Account 2 Monthly JP Morgan Chase Bank
Sprucegrove International Equity Fund (Mutual Fund) Daily Brown Brothers Harriman
Sprucegrove International CIT* Daily Brown Brothers Harriman
Separate Account Client Determines Client Determines
All Country World ex US Equities Sprucegrove All Country World ex. U.S. Representative Account Monthly JP Morgan Chase Bank
Sprucegrove All Country World ex U.S. CIT* Daily Brown Brothers Harriman
Separate Account Client Determines Client Determines
Global Equities Sprucegrove Global CIT* Daily Brown Brothers Harriman
Separate Account Client Determines Client Determines
All Country World Equities Sprucegrove All Country World CIT* Daily Brown Brothers Harriman
Sprucegrove All Country World Representative Account Daily Northern Trust
Separate Account Client Determines Client Determines

*SEI Trust Company (the “Trustee”) serves as the Trustee of the Fund and maintains ultimate fiduciary authority over the management of, and the investments made, in the Fund. The Fund is part of a Collective Investment Trust (the “Trust”) operated by the Trustee. The Trustee is a trust company organized under the laws of the Commonwealth of Pennsylvania and a wholly owned subsidiary of SEI Investments Company (“SEI”). “The Sprucegrove Collective Investment Trusts are trusts for the collective investment of assets or participating tax qualified pension and profit sharing plans and related trusts, and governmental plans as more fully described in the Declaration of Trust. As bank collective trusts, the Sprucegrove Collective Investment Trusts are exempt from registration as an investment company. The Sprucegrove Collective Investment Trusts are managed by SEI Trust Company, the trustee, based on the investment advice of Sprucegrove Investment Management Ltd. (“Sprucegrove”), the investment advisor to the trusts.”

Indices

MSCI EAFE, World, ACWI ex. US and ACWI Indices

The Morgan Stanley Capital International (MSCI) EAFE, World, ACWI ex. US and ACWI Indices are presented as benchmarks for investment performance. The Indices are the arithmetical average, weighted by market value of the performance of companies representing the stock markets of Canada, the U.S., Europe, Australasia, the Far East and Emerging Markets. Returns shown assume reinvestment of dividends unless stated otherwise. The MSCI EAFE Index captures large and mid cap representation across 21 developed markets, excluding the US and Canada. The MSCI World Index captures large and mid cap representation across 23 developed markets, including the US and Canada. The MSCI ACWI ex US Index captures large and mid cap representation across 22 of 23 developed markets, excluding the US, and 27 emerging market countries. The MSCI ACWI Index captures large and mid cap representation across 23 developed markets and 27 emerging markets counties. Throughout this report MSCI data is provided as a comparative reference only and may not be used in any way without the express permission of MSCI.

The MSCI data is comprised of a custom index calculated by MSCI for, and as requested by, Sprucegrove. The MSCI data is for internal use only and may not be redistributed or used in connection with creating or offering and securities, financial products or indices. Neither MSCI nor any other third party involved in or related to compiling, computing or creating the MSCI data (the “MSCI Parties”) makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and the MSCI Parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to such data. Without limiting any of the foregoing, in no event shall any of the MSCI Parties have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages. [www.msci.com)

Index information is provided for illustrative purposes only and is not intended to imply past or future performance. Please note an investor cannot invest directly in an index. Unless otherwise noted, index returns reflect the reinvestment of income and dividends, if any, but do not reflect fees, brokerage commissions or other expenses of investing.

S&P 500 Index

The S&P 500 Index is presented as a benchmark for investment performance. The Index is the arithmetic average, weighted by market value of the performance of companies representing the stock markets of the U.S. Returns shown assume reinvestment of dividends. The S&P Index includes 500 leading companies in leading industries of the U.S. economy.

Criteria for Company Examples

In each case, the examples for (i) additions and (ii) reductions/eliminations are selected as follows. The most common security traded in the quarter across all accounts for a mandate is chosen unless the resulting example was disclosed as an example of an addition or reduction/elimination, as applicable, for the mandate within the past four quarters, in which case, the next most common security across all accounts in the mandate is chosen. In the event of a tie, the security within the mandate with the highest transaction by total dollar volume during the quarter is chosen. For any account that does not include the selected security, the security within such account with the largest transaction by total dollar volume during the quarter is selected. All examples are chosen based on active, non-program trades, and exclude exceptional events such as transfers. Eliminations are accounted for in the quarter in which they are completed.

Specific Recommendations

Examples of specific holdings are intended to demonstrate our investment process and should not be construed as representative of investment performance. It should not be assumed that investments made in the future will be profitable or will equal any results presented. A list of all securities purchased and sold within the past year (together with dates and prices) is available upon request.

Products and services described herein are provided by Sprucegrove Investment Management Ltd. (“Sprucegrove”). The information in this document is confidential and may not be reproduced or redistributed in whole or in part without the prior written consent of Sprucegrove.

All returns are in U.S. dollars, unless otherwise noted.

Weightings may not total 100% due to rounding in this report.

This portfolio data is “as of” the date indicated and should not be relied upon as a complete or current listing of holdings (or top holdings) of the [fund/account/composite]. The holdings are subject to change without notice, and may not represent current or future portfolio composition.

Past performance is no guarantee of future results. Performance data assumes reinvestment of dividends. Performance is shown gross of investment management fees, which will reduce the client’s return. For example, a 70 basis point fee applied to an investment with an annual gross return of 10% will provide a compounded net return of 9.24% after 1 year and a 55.53% return after 5 years. Our fees are described in Form ADV Part 2. Returns are calculated on a time weighted, total return basis which includes dividend and interest income, realized and unrealized gains or losses, transaction costs and other expenses, if any.

Index information is provided for illustrative purposes only and is not intended to imply past or future performance. Please note an investor cannot invest directly in an index. Unless otherwise noted, index returns reflect the reinvestment of income and dividends, if any, but do not reflect fees, brokerage commissions or other expenses of investing.

This is not an offer to purchase or sell, or the solicitation of an offer to purchase or sell, any securities, any investment funds, vehicles or accounts (each, a “fund”), any investment advice, or any other service by Sprucegrove. An investment in a fund may be offered only pursuant to the fund’s offering memorandum and/or other offering materials. A fund’s offering materials will contain disclosure relating to certain risk factors, conflicts of interest and other considerations that should be carefully evaluated before making an investment in a fund or account managed by Sprucegrove. An investment in a fund or account managed by Sprucegrove is not suitable or desirable for all investors; investors may lose all or a portion of the capital invested.

The opinions, estimates and views expressed are on behalf of Sprucegrove for the period ending September 30, 2021 (Unless otherwise stated), constitute Sprucegrove’s best judgement as of the date of this document and are subject to change at any time based on market or other conditions. Sprucegrove does not guarantee the accuracy, adequacy or completeness of any third party data. Any predictions, opinions, and other information contained in this report are subject to change and without notice of any kind and may no longer be true and accurate after the date this report was first completed and disseminated. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation. In addition, any forecasts are based upon subjective estimates and assumptions about circumstances and events that may not yet have taken place or may never do so. While the information set out in this document has been prepared in good faith, no representation or warranty is given, and no responsibility is accepted, by Sprucegrove in relation to its accuracy or completeness.

The information provided herein should not be considered a recommendation to purchase or sell any particular security. The securities discussed herein are examples of Sprucegrove’s investment approach but do not represent an entire portfolio or the performance of a fund or strategy and in the aggregate may represent only a small percentage of portfolio holdings. It should not be assumed that any of the securities discussed herein were or will prove to be profitable, or that the investment recommendations or decisions made by Sprucegrove in the future will be profitable.

Any data contained herein which is attributed to a third party (“Third Party Data”) is the property of (a) third party supplier(s) (the “Owner”) and is licensed for use by Sprucegrove. Third Party Data may not be copied or distributed. Third Party Data is provided “as is” and is not warranted to be accurate, complete or timely. To the extent permitted by applicable law, none of the Owner, Sprucegrove or any other third party (including any third party involved in providing and/or compiling Third Party Data) shall have any liability for Third Party Data or for any use made of Third Party Data. Neither the Owner nor any other third party sponsors, endorses or promotes the portfolio or product to which Third Party Data relates.

This material is for informational purposes only to provide general information and is not meant to be legal or tax advice for any particular investor, which can only be provided by qualified tax and legal counsel. Please read the constating documents carefully prior to investing. Parties should independently investigate any investment strategy or manager, and should consult with qualified investment, legal, and tax professionals before making any investments.

GIPS Disclosures

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