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Papers and Speeches

Note: Each of these documents can be mailed to you directly via U.S. Mail or can be viewed here.

The High Dividend Yield Return Advantage: An Examination of Empirical Data Associating Investment in High Dividend Yield Securities with Attractive Returns Over Long Measurement Periods

In this report, we set forth a number of studies, largely from academia, analyzing the importance of dividends, and the association of high dividend yields with attractive investment returns over long measurement periods. You may be familiar with our prior booklet, What Has Worked In Investing, where we provided an anthology of studies which empirically identified a return advantage for value oriented investment characteristics.

In the same spirit, we attempt to examine what some in our industry have referred to as the “yield effect”, i.e. the correlation of high dividend yields to attractive rates of return over long measurement periods. Much has been written about dividends, and what is contained herein is not meant to be an exhaustive analysis, but rather a sampling of studies examining the impact of dividends on investment returns. We hope it will provide you with added insight and confidence, as it did us, in pursuing a yield-oriented investment strategy.

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What Has Worked In Investing, Studies of Investment Approaches and Characteristics Associated With Exceptional Returns

Tweedy, Browne has compiled a complimentary booklet entitled What Has Worked In Investing. We encourage all current and prospective shareholders to read it. It describes over 50 academic studies of certain investment criteria that have produced high rates of return. In the studies included in What Has Worked In Investing, attractive returns were found for stocks with one or more of the following investment characteristics: low stock price in relation to book value; net current assets; earnings; cash flow; dividends or previous share price; small market capitalization and a significant pattern of stock purchases by one or more insiders (officers and directors), or by the company itself. (Please note that the performance reflected in the studies does not represent the investment performance of the Tweedy, Browne Funds.)

The studies examined in the booklet focus on mature markets from around the world. The investment characteristics explained in this booklet, which are value-oriented characteristics, have been the core of Tweedy, Browne's investment philosophy and stock selection decision making process for more than 50 years, and are the basis for the management of the Global Value Fund, Global Value Fund II — Currency Unhedged, Value Fund, and Worldwide High Dividend Yield Value Fund.

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How Hedging Can Substantially Reduce Foreign Stock Currency Risk

At Tweedy, Browne, we try to be as close to currency "agnostic" as possible. This paper addresses why we hedge the Tweedy, Browne Global Value Fund and Tweedy, Browne Value Fund, how we hedge and the costs/benefits associated with hedging foreign currency exposure. The paper also addresses why we offer two unhedged Funds, the Tweedy, Browne Worldwide High Dividend Yield Value Fund and the Tweedy, Browne Global Value Fund II -- Currency Unhedged.

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10 Ways To Beat An Index

It is an unfortunate fact that most investment managers over significant lengths of time have failed to beat market indexes such as the S&P 500. In this booklet, we outline the steps we take at Tweedy, Browne to add value above an index return. The booklet also attempts to provide perspective concerning the year-by-year variability of investment returns, especially in relation to an unmanaged index by examining the long term records of nine legendary value oriented investment managers.

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Investing For Higher After-Tax Returns: Lessons for Tax-paying Investors from Warren Buffett, Index Funds, the Best Performing Stocks over 18-year Period, and Our Own Experience

This report will describe what we have learned about investing for higher after-tax returns, and our investment strategy for tax-paying investors. The Managing Directors of Tweedy, Browne Company LLC have become increasingly aware of taxes over the last ten years as their own wealth and clients' wealth increased. Nearly all of the hundreds of millions that we have invested alongside our clients in portfolios at Tweedy, Browne, including the Tweedy, Browne Funds, is subject to income taxes and capital gain taxes. At Tweedy, Browne, we continue to seek to earn both pre-tax and after-tax returns in excess of index fund returns for our own money and our clients' money. This study is part of that effort, and represents our first extensive examination of investing for higher after-tax returns, a topic that we believe is extremely important for tax-paying investors.

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