Shareholder Letter
Dear Fellow Shareholders,
The first half of the Fund’s 25th fiscal year (August 31, 2024) ended with assets totaling $94,985,817. This compared favorably with the $89,591,903, at the end of the same period in 2023. The increase was the result of a general market appreciation during the period. That nearly $95 million in assets at mid-point represented a gain of 9.36% even with investor withdrawals totaling $5,418,582.17.
As many DRIPX shareholders will recall, the fund was founded to provide a means for Moneypaper subscribers to use their IRA funds to follow the DRIP strategy that was described in the publication (and which Moneypaper helped subscribers to follow). Investors who have not been schooled in this strategy and also have easy access to trading on a broker’s platform are more likely to follow the crowd—which often undermines their long-term success–especially in volatile markets.
The Fund’s strategy is to consistently increase shareholder’s holdings while maintaining a defensive posture in the market. The healthy gains over the past decade and since the fund’s inception show the value of keeping a long-term investment mindset through the markets up and downs.
For the six-month period through August 31 (the first half of the Fund’s current fiscal year), the fund increased 9.36% compared to gains of 10.33% in the Russell 1000 Value (measured by the Vanguard Russell 1000 Value ETF) and gains of 10.63% in the S&P 500 (measured by the Vanguard 500 ETF. Keep in mind that the indices do not contend with untimely redemptions, which may account for the relatively small differences in results. What’s more, it’s also worth noting that the S&P 500 returns this year have been driven by the 7 largest technology companies (the magnificent 7) while the other 493 companies have had much more modest gains. The defensive nature of your fund results in a more balanced portfolio with few outsized positions. While this posture may have worked against it this year, it may account for its long-term success.
DRIPX has the Morningstar® Silver Medal designation, which validates our expectation for long-term outperformance, since the Silver is forward looking, based on the Fund’s investing strategy and the quality of its component companies–the vast majority of which have extended their historical increases of annual dividends. In addition, since last year Morningstar has raised the Fund’s designation from “Above Average” to “High” in its evaluation of the Fund’s management.
As always, we thank you for your confidence in our conservative approach to building long-term wealth. We continue to suggest funding your account(s) on a regular basis, either through dollar-cost averaging or considered periodic purchases, as we seek to take advantage of opportunities afforded by the volatility in the stock market.
Vita Nelson and Mario Medina, October 29, 2024
* The Medalist Ratings indicate which investments Morningstar believes are likely to outperform a relevant index or peer group average on a risk-adjusted basis over time. Investment products are evaluated on three key pillars (People, Parent, and Process) which, when coupled with a fee assessment, forms the basis for Morningstar’s conviction in those products’ investment merits and determines the Medalist Rating they’re assigned.
Disclaimer:
Past performance is not a guarantee of future results. Must be preceded or accompanied by a prospectus. Mutual fund investing involves risk. Principal loss is possible.
Fund holdings are subject to change and should not be considered a recommendation to buy or sell any security. Please refer to the schedule of investments in the report for complete holdings information.