BIAWX has been on the watchlist for several years now, Aegis Value on a different list for rather longer than that.
Aegis is a true microcap value fund. The fund's current weirdness is that Mr. Barbee has found cause to put almost all of his fund's assets in the industrials and energy sector, with two-thirds international and one-half of the fund invested in Canada Mr. Barbee explained his rationale in
a 2023 conversation with us. Active share is laughably high (99.99) and turnover is laughably low (9).
Compared to BIAWX, I'm adding a bit of volatility (something like 20% bump in max 6-year drawdown and standard deviation), a bump of 250% in returns (12% to 32%) and something more than a doubling of the Sharpe ratio (from .49 to 1.11). Why six years? I used the metric I'd been using in portfolio analysis because it was the age of my youngest fund and because I'm working on an article on "the best funds from the best families, 2020-present". (Best funds = Great Owls, best families = family performance score in the top quintile.) Over longer periods the race is closer but there's no period were BIAWX outperforms on total return or Sharpe.
At a portfolio level, it leaves me about at goal on growth vs stability sleeves (55 / 45 where the target is 50 / 50) and substantially overweight on international vs US (36% of the total portfolio vs 19% US). I'll live. AVALX is 5% of my portfolio.
Three downsides, beyond the volatility bump: I had a noticeable taxable gain in BIAWX, AVALX has a substantially high E.R. and I had to pay a small transaction fee at Schwab to buy AVALX, less than usual I think because I structured it as a trade between funds.
Comments
Our stake in value finds have 10% in energy sector. Question is can oil stay at $150 without trigger a recession. Iran strategy is to maximize economic pain on the west.
AVALX is pretty much a one-man, high-ER bet on small-cap hydrocarbons and miners with key-person risk and a Canadian tilt to spice things up. That makes it right up our landlord's alley.
Are there cheaper ways to get exposure to those sectors? IDK. I've been looking at commodity and/or natural resource funds. But that's mainly window shopping.
In the current environment I haven't found much reason to buy or sell anything in the taxable.
I have certainly realized some small gains, and raised some ready cash in the IRA.
As a go anywhere fund, the real question is how has it done when oil and gold were flat? Can Barbee pick other undervalues sectors and stocks?
As I remember he has done a pretty good job overall, but I am in Paris this week and trying not to get to involved in investment research.
I find your decision to buy into AVALX at this time interesting. I've held AVALX at 5% weight for the better part of 2025 to present moment. It has done well but at this time I view a TACO on Iran as a high probability event and am debating whether I should exit.