October 19, 2021

Dear Fellow Shareholders:

Despite lingering hesitancy from the delta variant, tangled supply-chains, and bona fide inflation, we remain relatively optimistic about the economy. But that’s not the same thing as being optimistic about the stock market. Valuations are a bit stretched overall, which we think will lead to lower returns in the next decade than the mid-teens we’ve seen the past 10, but we are still finding pockets of value in some very good businesses.

Total Returns as of September 30, 2021 (A)

3rd Quarter1 Year3 Years5 Years10 YearsSince 9/30/10 Inception
Bretton Fund–1.77%28.19%13.44%16.14%14.23%12.69%
S&P 500 Index (B)0.58%30.00%15.99%16.90%16.63%15.13%

(A) All returns include change in share prices and, in each case, include reinvestment of any dividends and capital gain distributions. The inception date of the Bretton Fund was September 30, 2010.

(B) The S&P 500® Index is a stock market index based on the market capitalizations of 500 leading companies publicly traded in the US stock market, as determined by Standard & Poor’s, and captures approximately 80% coverage of available market capitalization.

Performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. You may obtain performance data current to the most recent month-end here or by calling 800.231.2901.

All returns include change in share prices, reinvestment of any dividends, and capital gains distributions. Indices shown are broad-based, unmanaged indices commonly used to measure performance of US stocks. These indices do not incur expenses and are not available for investment. The fund’s expense ratio is 1.35%.The fund’s principal underwriter is Rafferty Capital Markets, LLC.

Contributors to Performance
Google continued its streak of outperformance. In the second quarter, it increased revenue almost 60% off of depressed early–Covid 2020 numbers, and earnings roughly doubled. The stock has gone up 4.4x from where we first purchased it in 2015, and amazingly, we still find the stock attractively valued. It contributed 0.8% to performance in the quarter.

AutoZone and PerkinElmer each experienced a business surge last year due to Covid and government stimulus, and investors have been cool to the stock for much of the past year, perhaps because the market anticipated those businesses collapsing as the world returned to “normal.” Yet both companies have strong underlying franchises and attractive stock prices, and investors started to notice them again this past quarter. AutoZone added 0.7% and PerkinElmer 0.4%.

Last quarter, we wrote about our newest portfolio company, Dream Finders Homes, a homebuilder that emulates the land-lite model of our more established homebuilder, NVR. Dream Finders is much smaller and much faster-growing than NVR, but also more speculative. Dream Finders has been aggressive with acquiring other homebuilders and recently announced a large deal that will grow their business by 50%, but will also see them take on a lot more debt. While we like the deal and think it’ll have significant value for years, we know executing the deal well and taking on high-interest debt isn’t without risk. Investors sold off the stock in the quarter, which took off 1.1% from performance.

Fluctuations in the stock prices of Ross and Union Pacific hit performance by 0.6% each. Both businesses continue to perform well.


Security% of Net Assets
Alphabet, Inc.13.0%
American Express Co.6.1%
JPMorgan Chase & Co.5.8%
AutoZone, Inc.5.8%
Microsoft Corporation5.8%
Bank of America Corp.5.7%
Mastercard, Inc.5.6%
S&P Global, Inc.5.4%
Union Pacific Corp.5.2%
NVR, Inc.4.9%
UnitedHealth Group Incorporated4.8%
The Progressive Corporation4.8%
Visa, Inc.4.4%
The TJX Companies, Inc.4.2%
Ross Stores, Inc.4.0%
Berkshire Hathaway, Inc.3.5%
PerkinElmer, Inc.3.3%
Dream Finders Homes, Inc.3.1%
Canadian Pacific Railway Limited2.9%
Armanino Foods of Distinction, Inc.1.4%

Some of you may recall Canadian Pacific Railway’s entering a bidding war against its rival, Canadian National, over Kansas City Southern. After a few rounds of increasing bids, Canadian Pacific “won” the deal and will now begin the long process of securing regulatory approval for the transaction. While we predict the acquisition will turn out okay for Canadian Pacific, we weren’t enthused about the price paid and thus the impact on shareholder value. We reduced our stake and reallocated the proceeds to other positions.

As always, thank you for investing.

Stephen Dodson            Raphael de Balmann
Portfolio Manager         Portfolio Manager