Dear Fellow Wintergreen Fund Shareholder,
EXCERPT FROM THE 2013 SEMI-ANNUAL REPORT SHAREHOLDER LETTER
Since its inception on October 17, 2005, Wintergreen Fund, Inc. Investor Class (the “Investor Class”) has a cumulative performance which compares very favorably to the Standard & Poor’s 500 Composite Index’s (“S&P 500”) cumulative return. The Investor Class performance for the first six months of 2013 underperformed the S&P 500. The performance of Wintergreen Fund, Inc. (the “Fund”) during the period was due, in part, to strong returns from holdings in Berkshire Hathaway Inc., Class B, Swatch Group AG, and Reynolds American, Inc. Securities that underperformed included holdings in Genting Singapore plc, Sun Hung Kai Properties Limited, and Wynn Macau Ltd. The Fund also utilized forward currency contracts which had an overall positive impact on performance.
“I look to the future because that is where
I’m going to spend the rest of my life.”
— George Burns
We’ve often found that when studying a truly exceptional company, there will be other appealing businesses within that company’s orbit. Whether as competitors, suppliers, or collaborators, superb businesses tend to attract others like them. This is certainly the case with regard to MasterCard Inc., Class A (“MasterCard”) and Cielo SA (“Cielo”). We learned of Cielo through our research on MasterCard. Cielo acts as a merchant acquirer for MasterCard in Brazil, as well as for Visa, American Express, and several others. Merchant acquirers do the legwork of signing up retailers to accept credit cards, installing card readers, and acting as the first step in the approval process when a customer swipes a card to make a purchase. Much like MasterCard, Cielo does not lend money to credit card holders, has 50%-plus operating margins, and is a prime beneficiary as consumers shift from cash to plastic.
Today, cash and checks are still the dominant forms of payment worldwide, accounting for a combined 85% of all payment transactions worldwide. While these traditional forms of payment represent the lion’s share of today’s transactions, we believe the future belongs to plastic and other forms of electronic payments. Traditionally, payments made for items such as groceries and utilities were made using checks. Today, more and more people are using debit and credit cards for these everyday purchases. We believe this transition is just getting started. Globally, consumer expenditures are growing rapidly. With more and more of these expenditures being paid for with credit and debit cards, the electronic payments market should continue to grow. Standing as the intermediaries between retailers and consumers, we believe both MasterCard and Cielo will benefit from the global transition from cash to plastic.
David J. Winters, CFA
The views contained in this report are those of the Fund’s portfolio manager as of June 30, 2013, and may not reflect his views on the date this report is first published or anytime thereafter. The preceding examples of specific investments are included to illustrate the Fund’s investment process and strategy. There can be no assurance that such investments will remain represented in the Fund’s portfolios. Holdings and allocations are subject to risks and to change. The views described herein do not constitute investment advice, are not a guarantee of future performance, and are not intended as an offer or solicitation with respect to the purchase or sale of any security.
The Fund is subject to several risks, any of which could cause an investor to lose money. The Fund may purchase risk arbitrage securities (securities of companies involved in a restructuring) or distressed companies. These companies may not be successful in their restructuring and securities of distressed companies are generally more likely to become worthless than securities of more financially stable companies. Smaller companies involve substantial risk as these securities are traditionally more volatile in price than larger company securities. Securities rated below investment grade, sometimes called junk bonds, involve a greater degree of risk than investment grade bonds in return for higher yield potential. The Fund may be subject to interest rate risk which is the risk that debt securities in the Fund's portfolio will decline in value because of increases in market interest rates. By participating in derivative securities, the Fund may attempt to hedge (protect) against currency risk which is the risk that the value of foreign securities may be affected by changes in currency exchange rates. Derivatives can be volatile and involve various types and degrees of risks, depending upon the characteristics of a particular derivative. International investing involves certain risks and increased volatility not associated with investing solely in the U.S. These risks include currency fluctuations, economic or financial instability, lack of timely or reliable financial information or unfavorable political or legal developments. These risks are magnified in emerging markets. Short sale risk is the risk that the Fund will incur an unlimited loss if the price of a security sold short increases between the time of the short sale and the time the Fund replaces the borrowed security.
In light of these risks, the Fund may not be suitable for all investors.
Before investing you should carefully consider the Fund's investment objectives, risks, charges and expenses. The prospectus and summary prospectus contain this and additional information regarding the Fund. To obtain a prospectus or summary prospectus, please download from this site or call toll-free 1-888-468-6473. The prospectus and summary prospectus should be read carefully before investing. This website is not a solicitation for the Fund outside of the United States.
Foreside Fund Services, LLC, distributor (www.foreside.com)