This shareholder letter is part of the Bretton Fund 2023 Semiannual Report (pdf).

August 15, 2023

Dear Fellow Shareholders:

Inflation appears to be ebbing, recession risk is fading, artificial intelligence seems promising—and the markets reacted accordingly with a strong first half. While we don’t make macroeconomic or market predictions, we are at the same time relatively optimistic about the US economy over the long term while being slightly unenthusiastic about the market’s valuation.

Total Returns as of June 30, 2023 (A)

First Half 20231 YearAnnualized 3 YearsAnnualized 5 YearsAnnualized 10 YearsAnnualized Since Inception
Bretton Fund13.80%21.75%15.56%12.01%10.31%11.74%
S&P 500 Index (B)16.89%19.59%14.60%12.31%12.86%13.47%

(A) 1 Year, 3 Years, 5 Years, 10 Years, and Since Inception returns include change in share prices and, in each case, include reinvestment of any dividends and capital gains distributions. The inception date of the Bretton Fund was September 30, 2010..

(B) The S&P 500® Index is a broad-based 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 at or by calling 800.231.2901.

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

2nd Quarter
In the second quarter, the fund returned 8.89% compared to the 8.74% for the S&P 500. The largest positive contributor to performance was Dream Finders Homes, adding 2.0%, a nice turnaround for our small homebuilder which was last year’s biggest detractor. Investors initially figured higher rates would decimate housing demand, but a continued housing shortage and existing homeowners reluctance to give up their low-rate mortgages kept demand for newly built homes strong. After falling 65% below our average cost at its low point, we’re back to a bit over breakeven.

Our two tech giants, Alphabet and Microsoft, had strong quarters as investors figured both would be beneficiaries of the artificial intelligence boon. Alphabet added 1.3% and Microsoft 0.9%.

Our two detractors were Progressive and Revvity, which took off 0.5% and 0.2%, respectively.

The first quarter of 2023 was the worst quarter for auto insurance company losses since at least 2001. Used car prices, labor costs, and parts costs were all high, natural disasters were frequent, and drivers continue to observe Covid-era levels of inattention to traffic rules. Even massive rate increases were not enough to make the math work. That said, we think the problems are transitory. Progressive is now up to a 15% market share, only three points behind industry leader State Farm, while operating at a direct loss ratio of 70% versus State Farm’s 88%. Used car prices are already starting to cool, and we expect rate increases to catch up to costs soon enough.

Revvity is the former PerkinElmer, now blessed with a name only a trademark consultant or Scrabble player could love; the PerkinElmer name went along with its food testing business to a private equity firm. Revvity is now a pure-play healthcare business, selling mostly consumables and some instruments to the life sciences and diagnostics worlds. The proximate cause of its share price drop was the decision to reduce guidance targets for the year out of concern that pharma customers are curtailing their spending plans. There seems to be some amount of slowdown—if nothing else, the rush to fund AI companies has starved pre-revenue biotech companies of their traditional venture funding—but we expect the push for drug discovery and development to come back strong eventually. We have just witnessed a global demonstration of the power of mRNA technology, and now AI offers the promise of sorting molecules for therapeutic promise more effectively than ever.


Security% of Net Assets
Alphabet, Inc.9.5%
AutoZone, Inc.6.9%
The Progressive Corporation6.1%
NVR, Inc.6.1%
Microsoft Corporation6.0%
The TJX Companies, Inc.5.5%
Ross Stores, Inc.5.5%
S&P Global, Inc.5.2%
Mastercard, Inc.5.1%
American Express Co.5.1%
Visa, Inc.5.0%
UnitedHealth Group Incorporated4.8%
JPMorgan Chase & Co.4.7%
Union Pacific Corp.4.4%
Dream Finders Homes, Inc.4.2%
Bank of America Corp.4.2%
Moody's Corporation4.0%
Berkshire Hathaway, Inc.3.5%
Revivify, Inc.1.8%
Armanino Foods of Distinction, Inc.1.4%

*Cash represents cash equivalents less liabilities in excess of other assets.

The fund did not eliminate or initiate any new positions in the second quarter, but as usual, we added to a few existing positions opportunistically.

As always, thank you for investing.

Stephen Dodson            Raphael de Balmann
Portfolio Manager         Portfolio Manager