The iMGP Berkshire Dividend Growth ETF Fund returned 6.46% (NAV return) & 6.33% (Market Return) in the third quarter compared to 5.33% for the Russell 1000 Value Index. The Morningstar U.S. Large Value category had a return of 5.52% over the same period.

MSCI index returns source: MSCI. Neither MSCI nor any other party involved in or related to compiling, computing, or creating the MSCI data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability, or fitness for a particular purpose with respect to any of such data. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates, or any third party involved in or related to compiling, computing, or creating the data have any liability for any direct, indirect, special, punitive, consequential, or any other damages (including lost profits) even if notified of the possibility of such damages. No further distribution or dissemination of the MSCI data is permitted without MSCI’s express written consent. Source note: Returns prior to 1999 are the MSCI ACWI ex-US GR index. Returns from 1999 onwards are MSCI ACWI ex-US NR index.

Quarterly Portfolio Manager Commentary

Quietly Compounding: The Best of Both Worlds?

In a world consumed by AI, tariff debates, and rate speculation, it’s easy to lose sight of the quiet compounding power of disciplined dividend investing. However, we continue to believe in its long-term efficacy. Recent market volatility reminds us why the strategy, combined with active management, may provide investors with the best of both worlds.

April reminded us of that discipline and the importance of limiting the downside. While the broader market experienced a sharp dive, our strategy fell much less, echoing the defensive resilience it demonstrated in 2022—when markets dropped more than 20% and select growth names dropped 30–50%. As the growth trade dominates the ether, it’s almost like investors forgot what downside volatility feels like.

Along the way, we made several adjustments—trimming defensive names and selectively adding companies that could be described as more pro-cyclical or slightly higher “beta.” A change in strategy? Hardly. These new names show that our commitment to what we believe are high-quality, cash-rich companies with the potential to compound wealth through dividends remains firmly in place.

By mid-April, markets turned on a dime. The rise—which is nothing short of swift, meteoric, and historic—again proves just how difficult it is to time markets with precision. Quiet compounding through tumult and waiting patiently for the upswing is more our style. This rapid 30%+ climb off the bottom ranks among the quickest advances of that magnitude since 1950 (source: CapTrader, “Record Rally in the S&P,” July 2025).

We observed that our proactive April changes, along with powerful advances in several of our core holdings, allowed the portfolio to participate meaningfully in this sharp rebound. As big a bounce as growth or AI names? No. But our advance reminds us that limiting the downside and attractive upside need not be mutually exclusive.

Behind the Numbers

We see money center banks and big-cap tech as having provided clear tailwinds. Money center banks are thriving, as the benefits of their diverse business models are on full display. Loan growth hasn’t quite hit escape velocity yet, but their capital markets business has. Our “older” tech companies — those with notable free cash flow and reasonable valuations — are thriving. Our newest purchase, Dell, has positioned itself to participate in AI — but owning it comes at a fraction of the valuation, and in our view, provides meaningful dividend growth potential versus the rest of the space. AbbVie, TE Connectivity, and Norfolk Southern are other long-term holdings contributing meaningfully to recent results.

On the other hand, staples have underperformed—particularly General Mills and Pepsi. A general preference for riskier companies has consumer staples lagging a white-hot market. Inflation, GLP-1 drugs, and changing consumer tastes are headwinds for “Big Food” companies. Energy-related issues are having a “so-so” year, but even in these pockets of weakness, we see attractive yields, ample free cash flow, and potential opportunities to capitalize on economic recovery.

Outlook

Economic and market conditions today feel “Goldilocks,” but prices already reflect much of that optimism. An ever-climbing market demonstrates investors are acting as if there is little to worry about—or are happy to shake off any bad news.

But it’s usually the lack of fear, coupled with high prices, that sets investors up for either poor forward returns at best or, worse, a meaningful correction. The S&P 500 P/E? 22.65x. The Technology sector sports a P/E over 30x and represents a whopping 35% of the index. An equal-weight S&P sits at a more moderate 17.63x, suggesting pockets of opportunity remain in a wider range of stocks outside the largest weightings of the S&P. (Source: Bloomberg 9/30/2025)

Our strategy may be built for environments like these. We see it continuing to demonstrate resiliency, quiet yet attractive dividend compounding, and appealing upside. The best of both worlds? Maybe. Berkshire Dividend Strategy will actively work to find those opportunities. With a disciplined focus on dividend growth, quality, and sensible valuation, we hope the strategy would continue to quietly compound wealth over time — and remind clients why they own it in the first place.

As of 9/30/2024