What IVA's Unusual Move Means for Its Fund Shareholders

International Value Advisers announced on March 10, 2021, that it plans to liquidate its two U.S. mutual funds, IVA Worldwide IVWAX and IVA International IVIOX, on or around April 19, 2021. As a result, the Morningstar Analyst Ratings of all share classes of both funds have been reset at Neutral.

IVA added that all associated accounts and funds will be similarly liquidated, and that the firm itself will wind down operations and cease to exist. As of March 10, the IVA funds began selling all holdings in order to hold only cash and other cashlike securities, and no investments into the funds are being permitted, even by current shareholders. Fund shareholders can redeem their shares at any time before the liquidation date. Any shares not redeemed by then will be automatically redeemed to the shareholder on that date.

Liquidating funds and closing up shop is a highly unusual move that may have been prompted by several factors in this case. In recent years, the IVA funds have been hit with substantial redemptions as performance has suffered from three headwinds: the dominance of growth stocks, rather than the value style favored by IVA; the outperformance of large companies, whereas these funds had an all-cap approach; and the tendency of lead manager Charles de Vaulx to hold huge amounts of cash on the sidelines during an era when markets were generally rising. The cash piles helped the fund weather the storms during a few sharp market downturns but served as a drag overall. In 2020, IVA also suffered the departures of comanager and co-CIO Chuck de Lardemelle and managing partner Michael Malafronte. Neither was replaced. Both had been partners in IVA and now only two partners, de Vaulx and longtime analyst Thibaut Pizenberg, remain on board.