57843624 Tweedy Browne 2010 Shareholder Letter

8/3/2019 57843624 Tweedy Browne 2010 Shareholder Letter

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This booklet consists of two separate documents:

INVESTMENT ADVISERS LETTERTO SHAREHOLDERS

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ANNUAL REPORT

Tweedy, Browne Global Value Fund

Tweedy, Browne Global Value Fund II - Currency Unhedged

Tweedy, Browne Value Fund

Tweedy, Browne Worldwide High Dividend Yield Value Fund

TWEEDY, BROWNE FUND INC.

March 31, 2011


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Investment Advisers Letter to Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1

Annual Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1

Tweedy, Browne Fund Inc.Investment Advisers Note. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-2Expense Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-6

Tweedy, Browne Global Value FundPortfolio Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-7Perspective on Assessing Investment Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-8Portfolio of Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-9Sector Diversification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-11Portfolio Composition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-11Schedule of Forward Exchange Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-11

Tweedy, Browne Global Value Fund II - Currency UnhedgedPortfolio Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-13Perspective on Assessing Investment Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-14Portfolio of Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-15Sector Diversification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-17Portfolio Composition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-17

Tweedy, Browne Value FundPortfolio Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-18Perspective on Assessing Investment Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-19Portfolio of Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-20Sector Diversification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-21

Portfolio Composition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-21Schedule of Forward Exchange Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-21

Tweedy, Browne Worldwide High Dividend Yield Value FundPortfolio Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-22Perspective on Assessing Investment Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-23Portfolio of Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-24Sector Diversification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-25Portfolio Composition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-25

Tweedy, Browne Fund Inc.Statements of Assets and Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-26Statements of Operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-27Statements of Changes in Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-28Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-30Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-32Investment in the Fund by the Investment Adviser and Related Parties . . . . . . . . . . . . . . . . . . . . . . . II-37Report of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm . . . . . . . . . II-40Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-41


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Our Investment Team


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Investment Advisers Letter to Shareholders (Unaudited)

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The budget should be balanced, the treasury should be refilled,public debt should be reduced, the arrogance of officialdom should betempered and controlled, and the assistance to foreign lands shouldbe curtailed lest Rome become bankrupt.

- Cicero, 55 B.C.

To Our Shareholders:

The more things change, the more they seem to stay thesame. This certainly appears to be true in politics and capitalmarkets. Two years from the bottom of perhaps the most seriousfinancial crisis since the Great Depression, the above reputedadmonition of Cicero seems to have taken hold in the bodypolitic around the globe, and with good reason. Perhaps this iswhy global equity markets displayed unusual resiliency in 2010,shrugging off a multitude of worries, including a massive andgrowing fiscal deficit here in the U.S., the BP oil spill, the flashcrash, the financial crisis in Southern Europe, continued

sluggishness in employment and housing, and, at our fiscalyear-end, increasing violence in Northern Africa and theMiddle East together with the disastrous earthquake andtsunami in Japan, to once again finish the year on a high note.

Despite persistent macroeconomic uncertainty, businessesaround the globe have continued to adjust quickly to the neweconomic realities, rationalizing assets, both fixed and human,carefully managing working capital and strengthening balancesheets. Corporate earnings in general are once again quitestrong, and corporate cash reserves remain at or near recordlevels. Equity markets have responded in kind around theglobe, rising like a veritable phoenix over the last two yearsfrom the depths of the Great Recession, and the performanceof the Tweedy, Browne mutual Funds have also responded

favorably. 2010 was another good year for our shareholders.

Performance Results

The S&P 500 and the MSCI EAFE Index in U.S. dollarsare now up around 100% from the depths of the financial crisisand the lows of early March 2009. Our Funds have performedsurprisingly well during this very robust period in equitymarkets. Our relative outperformance in 2008 was notsurprising, since most value investors like us tend to hold upbetter when the market goes into a tailspin. However, it wasunexpected that our Funds would do as well as they did in 2009and 2010 as the markets returned to risk with a vengeance.This was in part due to our paring back of financials in late2007 and 2008, and the redeployment of the resulting cash inwhat we consider to be more transparent, better businesses thatwere punished by the market downdraft and became unusuallycheap during the heat of the crisis. In many respects, we thinkit was a generational opportunity to buy wonderful businesses,and we were fortunate to have the cash available to do it.

With the first calendar quarters advance, the Tweedy,Browne Global Value Fund is only 6.5% shy of recouping thedecline it experienced during the financial crisis (Oct. 07 Mar. 09), while the Value Fund is already in the black by

roughly 3.5%. The Worldwide High Dividend Yield ValuFund is only 0.28% away from drawing even as well. Markeindices such as the MSCI EAFE Index and the MSCI WorlIndex have considerably further to go to get back to even.

We are also pleased to report that Tweedy, BrownCompany was nominated by Morningstar as InternationaManager of the Year in 2010 for its management of TweedyBrowne Global Value Fund. This was Tweedy, Brownes seconnomination in three years. The Tweedy, Browne Value Funwas a finalist (out of 3) in the Global Equity category for thStandard & Poors Mutual Fund Excellence Awards in 2010which recognizes Funds that have achieved the highest overaranking of five-star in their category on the most consistenbasis during the period September 12, 2009 through August 312010, based on S&Ps proprietary, quantitative researchmethodology. Some of the factors that S&Ps research processeeks to identify are: consistently strong performance; highquality holdings as measured by S&P STARS (Stoc

Appreciation Ranking System); S&P Credit Ratings; S&Quality Ranks; and favorable cost factors. The Tweedy, BrownValue Fund is currently ranked four stars as of March 31, 2011

For the period ended March 31, 2011, the Tweedy, Browne GlobaValue Fund received an Overall Morningstar Rating of 5 stars ouof 290 Foreign Large Value Funds. For the 3-, 5-, and 10-year periods ending March 31, 2011, the Fund received a 5 star rating (ouof 290 funds), a 5 star rating (out of 221 funds), and a 4 star rating (out of 136 funds), respectively. The Overall MorningstaRating is based on risk-adjusted returns derived from a weighteaverage of 3-, 5-, and 10-year Morningstar metrics. For each fundwith at least a three-year history, Morningstar calculates

Morningstar Rating based on a Morningstar Risk-Adjusted measurthat accounts for variation in a funds monthly performance (including the effects of sales charges, loads and redemption fees), placinmore emphasis on downward variations and rewarding consistenperformance. The top 10% of funds in each category receive 5 starsthe next 22.5% receive 4 stars, the next 35% receive 3 stars, thnext 22.5% receive 2 stars and the bottom 10% receive 1 star.

As of March 31, 2011, the Value Fund received an overall S&PMutual Fund Ranking of 4 stars out of 1,373 Global Equity funds(Prior to September 30, 2010, the Value Fund was ranked by S&Pin its Domestic Equity category.) The overall S&P Mutual FunRanking is based on a weighted average computation of three com

ponents performance analytics, risk considerations and cost factorthat evaluate, relative to its peers, a funds underlying holdings, ithistorical performance, and characteristics of the fund. The S&Prankings do not take into account loads or any other sales chargesThe top 10% of funds in each category receive 5 stars, the next 20%receive 4 stars, the middle 40% receive 3 stars, the next 20% receiv2 stars and the bottom 10% receive 1 star.


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Our two newer Funds, the Tweedy, Browne WorldwideHigh Dividend Yield Value Fund and the Tweedy, BrowneGlobal Value Fund II Currency Unhedged, have alsoperformed satisfactorily with each Fund besting its benchmarkindex on an annualized return basis net of fees by 308 and 274basis points, respectively, since inception.

Presented below are investment results of the four Tweedy,Browne mutual Funds, through March 31, 2011, with

comparisons to the indices we consider relevant.*


Return after MSCIReturn Taxes on EAFE MSCI

Return after Distributions & Index(1)(2) EAFEPeriod Ended before Taxes on Sale of Fund (Hedged Index(1)(2)

3/31/11 Taxes* Distributions** Shares** to US$) (in US$)

3 Months 1.43% 1.43% 0.93% 0.89% 3.37%

6 Months 8.43 8.49 6.01 6.67 10.20

1 Year 10.59 10.64 7.42 2.28 10.42

3 Years 2.57 1.99 2.28 -1.71 -3.01

5 Years 3.23 2.56 2.89 -1.48 1.30

10 Years 6.53 6.02 5.74 1.41 5.38

15 Years 9.41 8.20 7.88 4.60 4.73

Since Inception(6/15/93)(3) 10.24 9.16 8.79 5.29 5.53

Total Annual Fund Operating Expense Ratios as of 3/31/10 and 3/31/11

were 1.41% and 1.40%, respectively

Tweedy, Browne Global Value Fund II

Currency Unhedged

Return after MSCIReturn Taxes on MSCI EAFE

Return after Distributions & EAFE Index(1)(2)

Period Ended before Taxes on Sale of Fund Index(1)(2) (Hedged3/31/11 Taxes* Distributions** Shares** (in US$) to US$)

3 Months 3.97% 3.97% 2.58% 3.37% 0.89%

6 Months 9.08 8.96 6.05 10.20 6.67

1 Year 13.00 12.88 8.61 10.42 2.28

Since Inception

(10/26/09)(3) 11.02 10.94 9.40 8.28 6.48

Gross Annual Operating Expense Ratios as of 3/31/10 and 3/31/11


Net Annual Operating Expense Ratios as of 3/31/10 and 3/31/11



Return after MSCIReturn Taxes on World

Return after Distributions & Index(1)(4)

Period Ended before Taxes on Sale of Fund (Hedged3/31/11 Taxes* Distributions** Shares** to US$) S&P 500(1)(5)

3 Months 2.80% 2.80% 1.82% 3.53% 5.92%6 Months 10.57 9.58 8.14 12.18 17.31

1 Year 8.77 7.79 6.95 9.30 15.65

3 Years 4.79 3.74 3.90 0.35 2.36

5 Years 3.81 2.60 3.11 - 2.63

10 Years 3.94 2.98 3.22 - 3.29

15 Years 7.39 6.38 6.25 - 6.79

Since Inception

(12/8/93)(3) 8.69 7.77 7.54 - 8.25



Tweedy, Browne Worldwide

High Dividend Yield Value Fund

Return afterReturn Taxes on MSCI

Return after Distributions & WorldPeriod Ended before Taxes on Sale of Fund Index (1)(4)

3/31/11 Taxes* Distributions** Shares** (in US$)

3 Months 5.66% 5.66% 3.68% 4.80%

6 Months 10.45 10.30 6.98 14.18

1 Year 13.03 12.77 9.00 13.45

3 Years 2.05 1.42 1.46 -0.25

Since Inception

(9/5/07)(3) 0.94 0.41 0.57 -2.14

30-Day Standardized Yield (Subsidized) as of 3/31/11: 2.39%

30-Day Standardized Yield (Unsubsidized) as of 3/31/11: 2.36%

Gross Annual Fund Operating Expense Ratios as of 3/31/10 and 3/31/11


Net Annual Operating Expense Ratios as of 3/31/10 and 3/31/11 were 1.38% and

1.38%, respectively

* The preceding performance data represents past performance anis not a guarantee of future results. Total return and principal valuof an investment will fluctuate so that an investors shares, wheredeemed, may be worth more or less than their original cost. Th

returns shown do not reflect the deduction of taxes that a shareholdewould pay on Fund distributions or the redemption of Fund sharesCurrent performance may be lower or higher than the performancdata shown. Please visit www.tweedy.com to obtain performancdata, which is current to the most recent month end. See page I-9 fofootnotes 1 through 5, which describe the indices and inception dateof the Funds. Results are annualized for all periods greater than onyear.

** After-tax returns are calculated using the historical highesindividual federal marginal income tax rates, and do not reflect thimpact of state and local taxes. Returns after taxes on distributionare adjusted for federal income taxes associated with fundistributions, but do not reflect the federal income tax impact of gain

or losses recognized when fund shares are sold. Returns after taxeon distributions and sale of fund shares are adjusted for federaincome taxes associated with fund distributions and reflect the federaincome tax impact of gains or losses recognized when fund shares arsold. Actual after-tax returns depend on an investors tax situatioand may differ from those shown, and the after-tax returns shownare not relevant to investors who hold their fund shares through taxdeferred arrangements such as 401(k) plans or individual retiremenaccounts.

The Funds do not impose any front-end or deferred sales chargeHowever, the Tweedy, Browne Global Value Fund, TweedyBrowne Global Value Fund II Currency Unhedged and TweedyBrowne Worldwide High Dividend Yield Value Fund impose a 2%

redemption fee on redemption proceeds for redemptions or exchangemade within 60 days of purchase. Performance data does not reflecthe deduction of the redemption fee, and if reflected, the redemptionfee would reduce the performance data quoted for periods of 60 dayor less. The expense ratios shown above reflect the inclusion oacquired fund fees and expenses and may differ from those shown inthe Funds financial statements.

Tweedy, Browne Company LLC (the Adviser) hacontractually agreed to waive its investment advisory feand/or to reimburse expenses of the Worldwide High Dividen


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Yield Value Fund and Global Value Fund II CurrencyUnhedged to the extent necessary to maintain the total annualfund operating expenses (excluding fees and expenses frominvestments in other investment companies, brokerage,interest, taxes and extraordinary expenses) at no more than1.37%. This arrangement will continue at least throughDecember 31, 2012. In this arrangement the Worldwide HighDividend Yield Value Fund and Global Value Fund II Currency Unhedged have agreed, during the two-year periodfollowing any waiver or reimbursement by the Adviser, to repaysuch amount to the extent that after giving effect to suchrepayment such adjusted total annual fund operating expenseswould not exceed 1.37% on an annualized basis. Theperformance data shown above would be lower had fees andexpenses not been waived and/or reimbursed.

Please note that individual companies discussed herein representholdings in the Tweedy, Browne Funds, but are not necessarily heldin all four Tweedy, Browne Funds. See Footnote 6 on pages I-9 andI-10 for the individual weighting of each of these companies held by

each Fund.

Our Funds Portfolios

Since our last report in September 2010, global equitymarkets have had quite a run. The MSCI World Index is up indouble digits in both hedged and unhedged currency. OurFunds also did quite well during this period. Our returns in localcurrency, i.e., how our stocks performed independent of theimpact of foreign currency, were driven in large part bycontinued strong returns in our branded consumer productscompanies. Most notable were tobacco stocks, such as PhilipMorris International and British American Tobacco, and ourfood and beverage holdings, including Nestle, Diageo,

Heineken, and two of our Mexican Coca-Cola bottlersEmbotelladoras Arca and Contal,6 which announced that theywere merging in January. Our financial stocks also producedvery good returns during this period, more specifically, bankstocks such as Bangkok Bank and Bank of New York Mellon;the publicly traded diversified holding company, Leucadia National; insurance holdings such as the large Germanreinsurer, Munich Re; the French life insurance company, CNPAssurances; the Swiss multi-line insurer, Zurich Financial; andthe U.S.-based insurance broker, Brown & Brown. Our oil andgas stocks continued to produce strong returns as well, as oilprices continued to increase. As the global economy developedsome momentum, several of our media and industrial holdingscontinued their rather robust recovery, including companies

such as Axel Springer, the German publishing company;Gestevision Telecinco, the Spanish television broadcaster;Linde, the German industrial gas company; and Union Pacific,the U.S.-based Western rail company.

There were only a modest number of companies in ourFunds portfolios that produced negative returns over the lastsix months. This group included pharmaceutical holdings suchas Novartis, Johnson & Johnson, and Roche, and some of our Japanese and Korean holdings such as Canon, T. Hasegawa,and Samchully. With rising concerns about their future pricing

power and the expiration of patents, pharmaceuticacompanies these days trade in the stock market like utilitstocks, i.e., at low price/earnings ratios and high dividendyields. Novartis, J&J and Roche all trade today around 10 to 1times earnings and have dividend yields between 3.5% and 5%but we believe characterizing them as utilities would be mistake. Novartis and J&J have valuable consumer productbusinesses to complement their ethical drug businesses, anRoche, with its acquisition of Genentech, is the industry leadein biological pharmacology. None of these companies face thsame patent cliffs of companies like Pfizer and Eli Lilly, and alof them have exciting new drugs in their pipeline. We believthey should continue to grow as baby boomers move intoretirement, and we are being paid a very attractive and growindividend while we wait for market sentiment to change.

Our rather modest position in Japanese stocks producesolid returns since our last report despite a relatively smaldecline at quarter end due in large part to the tragic earthquakand its nuclear aftermath. The Japanese situation is unfoldingand still quite uncertain. The potential for electrical poweshortages and the implications it has for production are seriouconcerns, along with the impact on Japanese consume

consumption. That said, our exposure is reasonable, and we arcomfortable with the investments we have made. The majoritof our Japanese exposure is in companies that are majoexporters, which leaves them less dependent upon domestidemand. The next couple of quarters will be difficult, but thresilience of the Japanese people and their industries over thlonger term has been enviable.

Portfolio activity has been relatively moderate since wlast reported; however, we did add a few new securities to ouFunds portfolios. Some of the more noteworthy new buyinclude SEC Carbon, G4S, Cisco, and Lockheed Martin.

SEC Carbon, which manufactures electrodes used in steefurnaces and cathodes for aluminum smelting facilities in

addition to other industrial materials, is a Japanese small capstock that at purchase was trading at 58% of book value and aroughly 6 times earnings, assuming the company couldcontinue to earn 9% on its book value. In excess of 60% of itsales are for export and the company has practically no nedebt.

G4S Plc, based in the UK, is the worlds leadininternational security group offering security services in number of categories, including security guards, alarms, prisonmanagement, cash and valuables transportation, among othersIt generates high free cash flow, has significant exposure tfaster growing emerging markets, has paid a dividend yieldnorth of 3%, and trades at a discount from estimated intrinsicvalue. It is one of the few security companies that can handl

the diverse and often global needs of large corporations andgovernments.

Cisco Systems provides routing, data and networkinproducts for the internet globally, and has an overwhelminmarket share in routers and switches. No, this is not a typo, burather Tweedy, Brownes first purchase of a technology stock inquite some time. You probably can recall when Cisco watrading in late 1999 and early 2000 at 140 times earnings, andhad become the largest company in the world, based on market capitalization in excess of $500 billion. In contrast, a


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roughly $17 to $18 per share today, the stock is trading atroughly 13 times trailing earnings and 11 times 2011 estimates.If you were to strip out the $45 billion of cash and short-terminvestments on the balance sheet, the P/E ex the cash would beeven a point or more lower. Cisco controls 58% of the marketfor routers and 64% of the market for switches, and as a resultthe costs incurred when moving to a competitors productremain high. It has created an additional barrier to entrythrough a sales channel that is financed by and tightly boundto the company. It throws off a lot of free cash flow, andprojected growth in routing and switching remains strong asinternet traffic continues to increase at a frenetic pace. Thecompany has been aggressively buying in its stock, has reducedits reliance on stock options as a means of compensation, andrecently began paying a dividend. It has a dominant marketposition, and is growing within a category that we believe stillhas a lot of room for future growth. Perceived competitivethreats and concerns about possible slower rates of growth haveput pressure on Ciscos stock price, which has allowed us anentry point in the stock that we believe is at roughly a one-third discount from a conservative estimate of the companysintrinsic value, which we would estimate to be about $26 per

share. Again, the potential for product obsolescence is alwaysgreater for a company like Cisco than for a company like Nestle. That said, we dont believe it is going to disappearanytime soon, and we feel we are being offered a price today inthe market that more than compensates us for the risks we aretaking. We believe its worth a 1% to 2% bet in the ValueFunds portfolio.

Lockheed Martin is the worlds largest defense contractor.Around year end, we purchased shares in Lockheed Martin forthe Worldwide High Dividend Yield Value Fund. It has whatwe think is a highly desirable product mix (F-35s, missiledefense, cyber security) and limited exposure to supplementaldefense spending, which will most likely be under pressuregoing forward due to government budget issues. At purchase, it

was trading at roughly 10 times earnings, with a solid free cashflow yield excluding pensions of 12% to 13%. It had a dividendyield of 4.2%, and has a record of returning another 1% to 2%(per quarter) to shareholders in the form of stock buybacks.The dividend has increased by 10% or more over the last eightconsecutive years, and the payout ratio is a conservative 42%.

In addition to these new purchases, we also added toseveral of our pre-existing positions since our last reportincluding Roche, Provident Financial, SK Gas, ZurichFinancial, Wells Fargo, British American Tobacco, KimberlyClark, Mediaset, Total, and Exelon, among others.

Notable sales since our last report included Home Depot,Edipresse, Grupo Minerali, and Korea Exchange Bank. We

trimmed our position in a number of holdings including AxelSpringer, Compagnie Financire Richemont, Coca-ColaFemsa, Embotteladoras Arca, Comcast, Emerson Electric,Henkel, Krones and Linde, among others.

It is not surprising that the rebound in global equitymarkets and our Funds over the last two years is beginning toconstrain bargain hunting somewhat. Deeply undervaluedsecurities are becoming increasingly difficult to uncover in thisenvironment, but our Funds portfolios are still trading at veryreasonable valuations that appear reasonably cheap when

compared to most fixed income alternatives.#

Interest in the Worldwide High Dividend Yield ValuFund continues to build and is evidenced by the Funds positivcash flow since its inception in 2007. One of the questions weare frequently asked is how these rather mature, dividendpaying businesses with often modest top line growth cangenerate attractive rates of return over time that arcomparable with those earned by non-dividend payin

companies. To understand this, we need to examine the returnmath, which is subtle and quite interesting. Lets take the fooddistribution company, Sysco, for example, which we discuss alength later in this report. Over the last 10 years, Syscos toline sales revenue has compounded at roughly 6.8%. Durinthis period, earnings before interest and taxes (EBIT) marginincreased from 4.2% to 5.3%, which allowed net income tcompound at a robust 9.8%. Sysco also bought back its sharereducing its share count considerably from 670 million to 594million, which allowed earnings per share growth to outpacgrowth in net income by another 1.2%. All in, with marginexpansion and stock buybacks, earnings per share (EPS) grewslightly more than 11% compounded. If Sysco can hold onto itcurrent price-to-earnings (P/E) ratio, which is approximatel

13, its return will consist of its EPS growth of 11% and itdividend. If the dividend were to increase, as it has for the las32 years in a row, the return could be even better. Of courseslower growth in sales and margins together with potentiadividend cuts and P/E contraction could always alter this returnscenario, but we believe that over time the odds of a morfavorable result are pretty good with a company like Sysco.

An Aspiring and Growing Global Middle Class

As you know, we have remarked in many of our recenletters and quarterly commentaries about the fact that ouFunds portfolios today include many large, globally diversifiecompanies, many of them branded consumer productcompanies, that conduct a considerable amount of business in

faster growing parts of the globe where a new middle class iemerging. These are companies such as Nestle, HeinekenDiageo, Unilever, Philip Morris International, Kimberly ClarkHenkel, and Novartis, among others. While our interest inthese businesses wasnt predicated on this idea of a risinmiddle class, but rather from the fact that these businesses werattractively valued at various points in time, their stronconsumer brands and global operating experience gives thescompanies a leg up when competing for this new and rapidlgrowing source of demand. We thought we would take moment to examine this phenomenon in greater detail.

According to a fascinating paper by Homi Kharas andGeoffrey Gertz of the Wolfensohn Center for Development athe Brookings Institution, there is a growing shift taking placin global consumer demand from the West to the East, drivento a large degree by a rapidly growing middle class in AsiaTheir data suggests that

... by 2015, for the first time in 300 years, the numberof Asian middle class consumers will equal the numberin Europe and North America. By 2021, on presenttrends, there could be more than 2 billion Asians inmiddle class households. In China alone, there couldbe over 670 million middle class consumers, comparedwith only perhaps 150 million today. a


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Even if these projections prove to be too optimistic, thenumbers are quite compelling. If this thesis does indeed playout, the world will no longer have to rely on the U.S. middleclass consumer to provide the engine for global growth. Thecharts that follow illustrate this potential handoff from Westto East.

Size of the Middle Class, Regionsa

(millions of people and global share)

North America 338 18% 333 10% 322 7%

Europe 664 36% 703 22% 680 14%

Central and South America 181 10% 251 8% 313 6%

Asia Pacific 525 28% 1,740 54% 3,228 66%

Sub-Saharan Africa 32 2% 57 2% 107 2%

Middle East and North Africa 105 6% 165 5% 234 5%

World 1,845 100% 3,249 100% 4,884 100%

Source: Wolfensohn Center for Development at Brookings

Total Middle Class Consumptions, Regionsa

(billions and global share)

(in 2005 purchasing power parity $)

2009 2020 2030

North America 5,602 26% 5,863 17% 5,837 10%

Europe 8,138 38% 10,301 29% 11,337 20%

Central and South America 1,534 7% 2,315 7% 3,117 6%

Asia Pacific 4,952 23% 14,798 42% 32,596 59%

Sub-Saharan Africa 256 1% 448 1% 827 1%

Middle East and North Africa 796 4% 1,321 4% 1,966 4%

World 21,278 100% 35,045 100% 55,680 100%

Source: Wolfensohn Center for Development at Brookings

In their study, Karas and Gertz point out that China isalready beginning to overtake the U.S. in certain key industries

affected by consumer demand. For example, they point out that in 2004, General Motors sold 10 cars in the U.S.for every one car sold in China; the ratio is nowquickly approaching one to one, and soon China willbe a bigger market than the U.S. for Americas largestautomaker. In 2008, Nokia, the largest cell phonemaker in the world, had net sales of $8.2 billion inChina, more than three times its U.S. revenues. In the14 years since opening its first store in China,Wal-Mart has gone on to open an additional 267 retailunits. a

We can see the impact of this growing middle class on therevenues and profits of several of the companies in our mutualFunds portfolios; companies such as Nestle, Diageo, PhilipMorris International, and Heineken just to name a few. Forexample, 36% of Nestles sales today come from the emergingmarkets where Nestle has been operating for generations. By2020, they expect that this contribution will increase to 45% ofgroup sales. There are currently 13 emerging markets in which Nestles annual sales exceed 1 billion Swiss Francs. In 5 ofthose, Nestles annual sales exceed 2 billion Swiss Francs. Inaddition, 47% of Nestles factories are currently located inemerging markets. Twenty-three of these factories are locatedin China, producing products such as bouillon, coffee, milk and

ice cream, among others. Many of Nestles products workparticularly well in emerging markets, including those that arshelf-stable and easily portioned such as ambient dairy, infannutrition, culinary, powdered beverages, soluble coffeechocolate, ready-to-drink beverages and water. Ice cream andpet care products are also growing fast from smaller bases. Thecompanys sales in emerging markets grew by 11.5% in 2010spurred in part by double digit sales growth in the GreateChina Region. As we write this letter, Nestle has jusannounced a partnership agreement where it has purchased 60% stake in the Chinese food company, Yiniu Foods Groupwhich is a well established brand that produces ready-to-drinkpeanut milk and ready-to-eat canned rice porridge. Accordinto Nestles CEO, Paul Bulcke, they are entering into thipartnership to bring healthy, affordable and tasty products toour consumers in China by combining Yiniuentrepreneurship, product expertise and consumeunderstanding with Nestles innovation and renovationcapabilities. In addition, Nestle has established twdevelopment centers in China that are focused on developinproducts specifically designed for the Chinese market.

Diageo, the worlds leading spirits company, today derive

about about one-third of its sales from the emerging marketswith much of that growth coming from China, where drinkerare consuming more and more Johnnie Walker Scotch anGuinness beer. Ivan Menezes, the companys President, NorthAmerica and Chairman, Asia Pacific, expects that in just a fewyears, 50% of its business will originate in the emerginmarkets. An important factor in this growth has beenpremiumizing or the trading up to higher priced brandsDiageo has eight of the top twenty brands in spirits.

Philip Morris International, another one of our holdingsis the worlds leading international tobacco company, withseven of the worlds top fifteen international brandsApproximately 35% of company profits derive from themerging markets. In the 4th quarter of 2010, it reported a 15%

increase in profits driven largely by a 24% surge in volume inAsian markets such as Indonesia, the Philippines, and SoutKorea. It is the only international tobacco company to havstruck a deal with the monopolist Chinese National TobaccCorporation to sell its Marlboro brand in China although saleare very much in their infancy, and the prospects for significanpenetration of the Chinese cigarette market remains inquestion.

Heineken, another long time holding in our Fundsportfolios, has been rebalancing its global footprint over thlast several years toward the emerging markets. It has acquire30 beer brewers in the emerging markets over the last decadeincluding its recent acquisition of the Femsa beer division in

Latin America, and sales in Africa, the Middle East and LatinAmerica are now driving its growth. At calendar year end2010, 68% of Heinekens beer volume was generated in themerging markets.

All four of the above examples are companies withdominant worldwide brands, long boots on the groundoperating experience in emerging markets, strong financiapositions, excellent forward looking managements, and mosimportantly, all trading at what we believe to be reasonablvaluations. These companies also differ markedly from th

2009 2020 2030


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typical more cyclical companies that dominate most emergingmarket indices and ETFs. They are for the most part steadier,less leveraged and cheaper, when more normalized rates ofgrowth are considered, and should be beneficiaries of thisglobal shift in consumer demand.

Financial Suburbans

We have often referred to many of the better businesses inwhich we have invested as financial Suburbans, companieswe believe can withstand virtually any economic headwinds oraccidents that come their way. In part, this has to do with thevery nature of their businesses, but also with the way theyrespond in a crisis. We think Sysco, which we hold in theTweedy, Browne Worldwide High Dividend Yield Value Fund,is an example of a financial Suburban.

Sysco Corporation is the undisputed leader in the foodservice distribution industry in the U.S. and Canada. It isapproximately twice the size of the next closest competitor.The company has a diverse mix of over 400,000 customers.While the core customers are restaurants, the company alsosells to hospitals, schools and hotels, among others. With over360,000 products, Sysco has the largest breadth of products

provided by any food service distributor in North America.Tweedy, Browne first purchased shares in Sysco

Corporation for the Worldwide High Dividend Yield ValueFund during the summer of 2009. Our average purchase pricewas $22.77 per share. At this average price, we were paying7.9x current enterprise value (the companys marketcapitalization plus any debt minus cash) (EV) to EBIT, 6.6xEV to earnings before interest, taxes, depreciation, andamortization (EBITDA) and approximately 13x net income.At purchase, the annual dividend yield was approximately4.2%. Sysco also had a strong balance sheet with modest debtleverage (rated AA- by S&P).

We observed over the last decade that large food service

distributors had been acquired for 13x to 15x EBIT and 9x to12x EBITDA. Due to its industry-leading position and size,Sysco is highly unlikely to ever be acquired by either a strategicor financial buyer. Therefore, in order to be conservative, wederived an intrinsic value estimate of Sysco using 11x EBIT, or9.2x EBITDA. After subtracting the net debt and adjusting fora potential IRS tax settlement, we estimated that Sysco wasworth approximately $30 per share. Therefore, at an averagepurchase price of $22.77, we believed we were payingapproximately 76% of appraised value. While not a largeenough price discount to intrinsic value (24% discount) toqualify for inclusion in our traditional portfolios, at 76% ofintrinsic value with a 4.2% dividend yield, it more thanqualified for inclusion in our high dividend yield portfolios.

In our opinion, Sysco is a business, to borrow a descriptionoften used by Warren Buffett, with a wide moat, which servesto better protect the business from competitors. Syscoscompetitive advantages include its overall size, its strong localcustomer relationships, its ability to successfully executelogistics and supply chain management, its history of superiorcustomer service, its large inventory of offered products, and alarge sales force of approximately 8,000.

While Sysco seems to have clear qualitative competitivadvantages, its historical financial track record validates thstrength of those advantages. At our time of initial purchaseSysco had gained an average of 50 basis points of market shareper year through acquisitions and organic growth; it hadincreased revenue for 38 consecutive years; increased neincome in almost every year; paid a dividend for 41 straighyears and increased the dividend for 32 straight years; it had history of earning steady margins (an EBIT margin aroun5%), which were approximately double what the competitionearned; and over the prior decade earned an average Return onEquity (ROE) of 31%.

The majority of Syscos revenue and profits are derivefrom restaurants. With consumer spending declining during threcent economic downturn, which resulted in a significandecrease in spending at restaurants, Sysco and its competitorfaced the worst business environment that the company haseen in 40 years of operating the business. Faced with theschallenges, Sysco cut fixed costs aggressively through workforcreductions in line with case volume declines. Margins were alsosupported by falling variable expenses such as employebonuses and sales commissions. Sysco also cut capita

expenditures plans and reduced share repurchases to conservcash (despite having a superb balance sheet). Eventually, atime passed, consumer confidence began to improve and casvolume growth (and sales) returned to positive levels.

The following table shows how Sysco performed betweenfiscal 2008 and fiscal 2010:

FYE June 30 2008 2009 2010

Total Sales $37,522 $36,853 $37,243

% Growth 7.1% -1.8% 1.1%

EBIT $1,880 $1,872 $1,976

EBIT Margin 5.0% 5.1% 5.3%

EBIT per share $3.08 $3.14 $3.33

Adj. EPS $1.81 $1.77 $1.94

Source: Tweedy, Browne Research

Despite the doom and gloom at initial purchase, thnumbers above illustrate how little impact the Great Recessionhad on Syscos sales and earnings. In fact, based on our updatedappraisal today of $33 per share, we believe that Sysco haincreased its intrinsic value since our initial purchase in thsummer of 2009 (excluding generous dividends earned sincpurchase).

At todays price of $28.50, the stock is up 30% from ouinitial original cost, yet still trades at a discount from ouestimate of its intrinsic value of $33 and the outlook, in ouview, remains positive. Sysco is embarking on a majoEnterprise Resource Planning (ERP) project whosimplementation is expected to cost $900 million over the nex5 years. The cost of this project will likely hold back earninggrowth in 2011 and 2012. However, from our perspective, iseems that the company is making investments that wilultimately result in higher long-term earnings power. In factSysco management recently committed to the goal odelivering EPS of $3.00 per share by fiscal 2015. Compared tothe fiscal 2010 level of $1.94 per share, this represents a 5-yea


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compounded annual growth rate of +9.1%. Assuming nomultiple expansion, and including dividends (the currentdividend yield is 3.5%), it does not seem to be a stretch thatSysco can compound shareholders money at a double digit rateover the next 5 years. That said, Sysco is a diversified bet (1.4%position) that we have made in our dividend Fund. It isimpossible to know today whether the stock will work out wellfor us in the years ahead, but the probabilities certainly appearto be in our favor with a company like Sysco.

The Specter of Inflation

Concern over the prospects for inflation seem increasinglywidespread today, with the notable exception of our FederalReserve, where Ben Bernanke continues to print dollars in aneffort to boost what has been, to date, a rather sluggishrecovery. In fact, Bernanke has suggested on more than oneoccasion that we have too little inflation. On the other side ofthe table, Paul Ryan, the Ranking Member of the HouseBudget Committee, said recently, The inflation dynamic canbe quick to materialize and painful to eradicate once it takeshold. Its hard to overstate the consequences of getting thiswrong.b Echoing Ryans concerns, the European Central Bank

(ECB), the Chinese, and even countries such as Brazil, havebegun to raise their interest rates in an attempt to dampen thisthreat to purchasing power.

To that end, last Fall in our Semi-Annual Report, we wentto great pains to point out the impact that even modest levelsof inflation can have on purchasing power over time. As youwill recall, assuming an annual inflation rate of 4% and a tenyear time horizon, $1,000 today would have purchasing powerof approximately $664.83 in ten years time, representing adecline in purchasing power of 33.5%.

While inflation has remained at relatively low levels formany years now, we have had plenty of inflation in the past andwe think that given our countrys increasing fiscal deficits andaggressive monetary policies, the probabilities that it couldonce again raise its ugly head have increased of late. The lastserious bout of inflation that we faced was back in the 1970s.As we pointed out in our Semi-Annual Report, Ibbotson-Sinquefield data indicates that for the ten-year period 1973 to1982, inflation was running at an average annual rate of 8.7%per year. From 1977 to 1981 inflation increased at 10.1% peryear. Prices more than doubled over this ten-year period,effectively wiping out much of our dollars purchasing power.Our country has had other periods of hyper-inflation, includingduring both the Revolutionary and Civil Wars and, accordingto Jason Zweig, we have not been alone:

Since 1960, 69% of the worlds market-orientedcountries have suffered at least one year in which

inflation ran at an annualized rate of 25% or more. Onaverage, those inflationary periods destroyed 53% ofan investors purchasing power.c

Today, there is increasing evidence that inflation may beheaded our way. Inflation rates are climbing all over the world,particularly in the emerging markets, fueled in large part bysurging commodity and food prices. According to the February3, 2011 issue of The Economist, inflation stands at 4.6% in

China, 5.9% in Brazil and almost 10% in India.d Euro-zoninflation rose to 2.4% in January, above targeted levels. ThUK inflation rate hit 3.7% in December and the Governor othe Bank of England has warned that it is expected to climb toas much as 4% to 5%. This rising tide of inflation has yet toreally hit the beaches of America, where a high unemploymenrate and a soft housing market continue to keep the lid onprices. Nevertheless, according to The Wall Street Journaconsumer prices were up 1.6% in January year over year, whichwas the biggest increase in that index in 8 months. The pricof gasoline, together with many popular food items, has gonup, while service sector inflation remains low, keeping overainflation rates at seemingly benign levels.b

What can investors do to protect themselves from ththreat of inflation? We spoke at length in our last report abouthe deleterious effects that inflation and higher interest ratecan have on the holders of long duration fixed incominstruments. We also described how well-selected equities canoffer a better chance of preserving ones purchasing power, athey did in the late 1970s. Fearing the worst, many investorhave recently been drawn to gold and commodities. We thinthis is probably a mistake.

Lust for Gold

Not since the late 1970s has the lust for gold by investorbeen as great as it has been recently. We thought we would taka brief moment to comment on this phenomenon, lest you feewe were missing the boat by not socking away some of youhard earned capital in this seductive commodity. Inflationfearing investors have been feverishly buying up goldcommodity futures, gold coins, gold stocks, gold ETFs and, insome instances, the bullion itself. The price of gold on thcommodity futures exchange is up almost 75% since the onseof the financial crisis in the Fall of 2007. Some well known anhighly followed hedge fund managers have been building largpositions in gold.

We believe there are better ways to address economiuncertainties than to speculate in a commodity that producenothing in the way of income, costs money to store, and whosvalue is completely dependent on investors continued faith init. With no underlying cash flow available to support valuation, calculating an intrinsic value for gold is virtuallimpossible. We also think that golds effectiveness as aninflation hedge has been nothing to write home about. BenGraham commented on this in his book, The IntelligenInvestor, in 1973. Gold did subsequently appreciatsignificantly in the late 70s in correlation with our last serioubout of inflation, but like most commodities in general, it habeen pretty much a do nothing investment ever since, at leas

up until the last 18 months. From its previous peak in 1980 o$667 per ounce to its current price of roughly $1,500 per ouncegold has compounded at approximately 2.7% per year versu3.2% for the Consumer Price Index. On the other handcommon stocks, as measured by the performance of the S&P500, compounded at an annual rate of approximately 11%including dividends, over this 30-year period.


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Source: Bloomberg

When asked about gold in a recent interview, WarrenBuffett had this cautionary observation about the value of goldat todays prices.

You could take all the gold thats ever been mined, andit would fill a cube 67 feet in each direction. For whatthats worth at current gold prices, you could buy all not some all of the farmland in the United States.Plus, you could buy 10 Exxon Mobils, plus have$1 trillion of walking-around money. Or you could havea big cube of metal. Which would you take? Which isgoing to produce more value?

Enough said!

Promotions within Our Ranks

As Andrew Carnegie once said, there is no way ofmaking a business successful that can vie with the policy ofpromoting those who render exceptional service. With that inmind, we are pleased to announce that nine of our colleagueshave become new equity stakeholders at Tweedy, BrowneCompany LLC. This group has spent on average 16 years, and,cumulatively, 143 years working at Tweedy, Browne. They

bring a wealth of experience and judgment to their respectiveroles. Many of these people you have either met or beenintroduced to in letters such as this. The group consists of fiveof our security analysts: Olivier Berlage, Roger De Bree, FrankHawrylak, Jay Hill and Elliott Larner; our head trader, Paul Neri; our chief operations officer, Glenn Finn; our GeneralCounsel, Ken Leopold; and Jason Minard, a key member of ourMarketing and Client Services Group. There is no doubt in ourmind that there will be several more additions to this group aswe are fortunate to have so many talented people at Tweedy,Browne.

Looking Forward

Uncertainty is a constant in capital markets. Sometimes

there is more of it, sometimes less. Today, there is plenty to goaround the current instability in the Middle East, the fiscalcrisis in southern Europe, growing deficits at home and abroad,a sluggish U.S. economy, spiking oil prices, natural disasters,rapidly rising commodity and food prices, the possibility forslower growth in China, and the possibility of another terroristattack. The outcome of any or all of these potential risks could

have a profound impact on confidence and resulting investobehavior. However, they remain imponderables. Fortunately, athe micro level, professionals who live, eat, and breathe theibusinesses come to work each day trying to incrementallincrease the value of their enterprises in an effort to improvetheir shareholders and their own economic well being. In mosof the developed world and in many parts of the developinworld, they operate in an environment of freedom, where thdiscipline of the marketplace provides incentives for rationabehavior. This is where we focus our attention and where ouinvestment process is anchored. We have always felt that tryinto figure out the value of a business is a much higher probabilitexercise than trying to untangle the ever present macro riskconfronting the world economy.

As you know, valuation forms the basis of our forward viewof equity markets and the prospects for your portfolio. Globaequity markets have indeed come a long way very fast from thSpring lows of 2009. Economic recovery has begun toaccelerate, and while businesses have adjusted well to the neweconomic realities, governments, both in the U.S. and abroadcontinue to struggle with the difficult choices that need to bemade in order to get their fiscal houses in order. Equit

valuations are up and bargains in the stock market are muchharder to come by, but certain segments of the market are upmuch more than others. For instance, smaller capitalizationcompanies have far outdistanced larger companies over the lasyear or so. As a result, we believe that the valuation levels oour portfolios, which are more oriented today to larger, highequality companies, are certainly not at worrisome levels. As oMarch 31, 2011, the top 25 holdings across all of our Fundwere trading on average at approximately 12x to 13x 201estimates of earnings, or at a marginal discount from markeP/Es. And in most instances, this is not based on spikinearnings and peak margins as is the case for many companietoday. While the Schiller equity market P/E appears to be muchhigher based on average earnings over the last ten years, th

earnings power of the bulk of our Funds portfolio holdingremains not too far away from their normal pattern. ThWorldwide High Dividend Yield Value Fund is even a bicheaper, on the same metrics. When compared to many bondyields, this kind of valuation seems downright attractive. Foexample, a security trading at 13x earnings has an after-taxearnings yield of approximately 7.7% (the inverse of thprice/earnings ratio, not to be confused with the dividendyield)e as compared to a pre-tax yield of approximately 3.2% fo

Gold Spot Price per Troy Ounce (US$)

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#Stocks and bonds are subject to different risks. In general, stockare subject to greater price fluctuations and volatility than bondand can decline significantly in value in response to adverse issuer

political, regulatory, market, or economic developments. Bondsunlike stocks, if held to maturity, generally offer to pay both a fixerate of return and a fixed principal value. Bonds are subject tointerest rate risk (as interest rates rise bond prices generally fall)the risk of issuer default, issuer credit risk, and inflation riskalthough US Treasuries are backed by the full faith and credit othe US government.


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10-year treasuries, and an after-tax yield of 2.1%, assuming a35% tax rate.# We think that Ben Graham would have foundthis earnings advantage of approximately 267% to be quitecompelling. However, it would be hard not to conclude thattodays level of interest rates are artificially low and probablyunsustainable. Of course uncertainty abounds, but if themarkets can hold their current P/E level, earnings growthcoupled with a nice dividend yield north of 3% should producesatisfactory returns. It is actually encouraging that the marketscontinue to climb a considerable wall of worry, and that amountain of cash remains on the sidelines available for equityinvestment. We feel our Funds portfolios are well-positionedand we are cautiously optimistic for their prospects goingforward.

Very truly yours,

TWEEDY, BROWNE COMPANY LLC

William H. Browne

Thomas H. Shrager

John D. Spears

Robert Q. Wyckoff, Jr.

Managing Directors

May 6, 2011

References

a. Kharas, Homi & Gertz, Geoffrey, Wolfensohn Center forDevelopment at Brookings, The New Global MiddleClass: A Cross-Over from West to East. Draft version ofChapter 2 in Chinas Emerging Middle Class: BeyondEconomic Transformation (Cheng Li, editor), Washington,DC, Brookings Institution Press, 2010 (forthcoming), pp. 5-6 (chart), p. 7 (quote).

b. Hilsenrath, Jon and Lahart, Justin, Split in EconomyKeeps Lid on Prices, The Wall Street Journal, February18, 2011.

c. Benjamin Graham with New Commentary from JasonZweig, The Intelligent Investor (HarperCollins, RevisedEdition, 2003) pp. 59-60.

d. Parsing Prices. The Economist, February 3, 2011.

e. The Dictionary of Finance and Investment Termsdefines earnings/price ratio as the relationship ofearnings per share to current stock price. Also known asearnings yield, it is used in comparing the relativeattractiveness of stocks, bonds, and money marketinstruments. It is the inverse of price/earnings ratio.

(Downes, John and Goodman, Jordan Elliot, Dictionaryof Finance and Investment Terms, Barrons EducationalSeries, Inc., 4th ed. 1991, page 157.)

Portfolio company data and information contained herein wasgenerally sourced from proprietary research, Wall Streetreports, the companies annual reports, and in some instances,financial press coverage.

Footnotes:

(1) Indexes are unmanaged, and the figures for the indexes showinclude reinvestment of dividends and capital gaindistributions and do not reflect any fees or expenses. Investorcannot invest directly in an index. We strongly recommenthat these factors be considered before an investment decisionis made.

(2) MSCI EAFE Index US$ is an unmanaged capitalization

weighted index of companies representing the stock markets oEurope, Australasia and the Far East. MSCI EAFE IndeHedged consists of the results of the MSCI EAFE Indehedged 100% back into US dollars and accounts for interesrate differentials in forward currency exchange rates. Resultfor both indexes are inclusive of dividends and net of foreigwithholding taxes.

(3) Inception dates for the Global Value Fund, Global ValuFund II Currency Unhedged, Value Fund and WorldwidHigh Dividend Yield Value Fund were June 15, 1993October 26, 2009, December 8, 1993, and September 52007, respectively. Information with respect to MSCI EAFEindexes used is available at month end only; therefore th

closest month end to the Global Value Funds inception dateMay 31, 1993, was used.

(4) The MSCI World Index is a free float-adjusted markecapitalization weighted index that is designed to measure thequity market performance of developed markets. The MSCWorld Index (US$) reflects the return of this index for a USdollar investor. MSCI World Index (Hedged to US$) consistof the results of the MSCI World Index with its foreigncurrency exposure hedged 100% back into US dollars. Thindex accounts for interest rate differentials in forwarcurrency exchange rates. Results for this index are inclusive odividends and net of foreign withholding taxes. We includresults of the MSCI World Index for the Value Fund sinc

November 30, 2006, which was the approximate date of thValue Funds mandate change from a restriction of 20%non-US investments.

(5) S&P 500 Index is an unmanaged capitalization weighteindex composed of 500 widely held common stocks listed onthe New York Stock Exchange, American Stock Exchangand over-the-counter market and includes the reinvestment odividends.

(6) As of March 31, 2011, Tweedy, Browne Global ValuFund, Tweedy, Browne Global Value Fund II CurrencUnhedged, Tweedy, Browne Value Fund and TweedyBrowne Worldwide High Dividend Yield Value Fund hainvested the following percentages of its net assets

respectively, in the following portfolio holdings: Philip MorriIntl (3.6%, 2.3%, 3.7%, 2.7%); British AmericaTobacco (1.6%, 1.4%, 1.6%, 3.0%); Nestle (4.2%3.2%, 4.4%, 1.7%); Diageo (3.3%, 3.0%, 4.2%, 3.3%)Heineken (4.1%, 3.1%, 3.8%, 0.0%); Embotelladora Arca (1.0%, 0.6%, 0.0%, 0.7%); Grupo Continent(Contal) (1.2%, 0.3%, 0.4%, 0.0%); Bangkok Ban(1.1%, 1.0%, 0.0%, 0.0%); Bank of New York Mello(0.0%, 0.0%, 1.0%, 0.0%); Leucadia Natl (0.0%0.0%, 2.9%, 0.0%); Munich Re (3.4%, 3.2%, 3.7%


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3.2%); CNP Assurances (3.5%, 3.3%, 2.0%, 3.4%);Zurich Financial (3.4%, 2.8%, 3.1%, 3.1%); Brown &Brown (0.0%, 0.0%, 1.8%, 0.0%); Axel Springer (4.2%,2.8%, 1.9%, 0.0%); Gestevision Telecinco (2.2%, 0.8%,1.6%, 0.0%); Linde (2.6%, 0.0%, 1.5%, 0.0%); UnionPacific (0.0%, 0.0%, 1.9%, 0.0%); Novartis (2.8%,2.6%, 2.6%, 2.4%); Johnson & Johnson (0.7%, 3.0%,2.5%, 3.4%); Roche (3.0%, 2.6%, 2.6%, 2.9%); Canon(1.5%, 0.6%, 1.4%, 0.0%); T. Hasegawa (0.1%, 0.2%,0.0%, 0.0%); Samchully (0.1%, 0.4%, 0.0%, 0.0%);Genentech (0.0%, 0.0%, 0.0%, 0.0%); Pfizer (0.0%,0.0%, 0.0%, 0.0%); Eli Lilly (0.0%, 0.0%, 0.0%,0.0%); SEC Carbon (0.01%, 0.2%, 0.0%, 0.0%); G4S(0.4%, 1.9%, 0.0%, 1.9%); Cisco (0.0%, 0.0%, 1.3%,0.0%); Lockheed Martin (0.0%, 0.0%, 0.0%, 1.4%);Provident Financial (1.2%, 1.6%, 0.0%, 1.4%); SK Gas(0.04%, 0.5%, 0.0%, 0.0%); Wells Fargo (0.0%, 0.0%,0.9%, 0.0%); Kimberly Clark (0.0%, 0.0%, 0.0%,3.4%); Mediaset (0.6%, 1.7%, 0.0%, 1.9%); Total(3.5%, 3.1%, 3.3%, 3.3%); Exelon (0.0%, 0.0%, 0.0%,3.3%); Home Depot (0.0%, 0.0%, 0.0%, 0.0%);Edipresse (0.0%, 0.0%, 0.0%, 0.0%); Grupo Minerali

(0.0%, 0.0%, 0.0%, 0.0%); Korea Exchange Bank(0.0%, 0.0%, 0.0%, 0.0%); Compagnie FinanciereRichemont (0.8%, 0.0%, 0.0%, 0.0%); Coca-Cola Femsa(2.2%, 0.0%, 0.0%, 0.0%); Comcast (0.0%, 0.0%,1.1%, 0.0%); Emerson Electric (0.0%, 0.0%, 1.9%,1.5%); Henkel KGaA (2.5%, 1.8%, 2.2%, 0.0%);Krones (1.5%, 0.3%, 0.6%, 0.0%); Sysco (0.0%, 0.0%,0.0%, 1.4%); Unilever (3.5%, 2.7%, 3.3%, 3.3%);General Motors (0.0%, 0.0%, 0.0%, 0.0%); Nokia(0.0%, 0.0%, 0.0%, 0.0%); Wal-Mart (0.0%, 0.0%,2.7%, 0.0%); Yiniu Foods Group (0.0%, 0.0%, 0.0%,0.0%); Chinese National Tobacco Corp (0.0%, 0.0%,0.0%, 0.0%).

Morningstar, Inc. All Rights Reserved. The informatiocontained herein: (1) is proprietary to Morningstar and/or itcontent providers; (2) may not be copied or distributed; and(3) is not warranted to be accurate, complete or timely. NeitheMorningstar nor its content providers are responsible for andamages or losses arising from any use of this information. Pasperformance is no guarantee of future results.

Current and future portfolio holdings are subject to riskInvesting in foreign securities involves additional risks beyonthe risks of investing in U.S. securities markets. These riskinclude currency fluctuations; political uncertainty; differenaccounting and financial standards; different regulatorenvironments; and different market and economic factors invarious non-U.S. countries. In addition, the securities of smalless well known companies may be more volatile than thosof larger companies. Value investing involves the risk that thmarket will not recognize a securitys intrinsic value for a lontime, or that a security thought to be undervalued may actuall be appropriately priced when purchased. Please refer to th

Funds prospectus for a description of risk factors associated withinvestments in securities which may be held by the Funds.

This letter contains opinions and statements on investmentechniques, economics, market conditions and other matters. Ocourse there is no guarantee that these opinions and statementwill prove to be correct, and some of them are inherentlyspeculative. None of them should be relied upon as statementof fact.

Tweedy, Browne Global Value Fund, Tweedy, Browne GlobaValue Fund II Currency Unhedged, Tweedy, Browne ValuFund, and Tweedy, Browne Worldwide High Dividend Yield

Value Fund are distributed by Tweedy, Browne Company LLC.

This material must be preceded or accompanied by a prospectufor Tweedy, Browne Fund Inc.


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Tweedy, Browne Global Value FundTweedy, Browne Global Value Fund II - Currency UnhedgedTweedy, Browne Value FundTweedy, Browne Worldwide High Dividend Yield Value Fund

II-1

ANNUAL REPORT

March 31, 2011


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Investment Advisers Note (Unaudited)

II-2

The budget should be balanced, the treasury should be refilled, pub-lic debt should be reduced, the arrogance of officialdom should betempered and controlled, and the assistance to foreign lands shouldbe curtailed lest Rome become bankrupt.

- Cicero, 55 B.C.

To Our Shareholders:

The more things change, the more they seem to stay thesame. This certainly appears to be true in politics and capitalmarkets. Two years from the bottom of perhaps the most seriousfinancial crisis since the Great Depression, the above reputedadmonition of Cicero seems to have taken hold in the bodypolitic around the globe, and with good reason. Perhaps this iswhy global equity markets displayed unusual resiliency in 2010,shrugging off a multitude of worries, including a massive andgrowing fiscal deficit here in the U.S., the BP oil spill, the flashcrash, the financial crisis in Southern Europe, continued

sluggishness in employment and housing, and, at our fiscalyear-end, increasing violence in Northern Africa and theMiddle East together with the disastrous earthquake andtsunami in Japan, to once again finish the year on a high note.

Despite persistent macroeconomic uncertainty, businessesaround the globe have continued to adjust quickly to the neweconomic realities, rationalizing assets, both fixed and human,carefully managing working capital and strengthening balancesheets. Corporate earnings in general are once again quitestrong, and corporate cash reserves remain at or near recordlevels. Equity markets have responded in kind around theglobe, rising like a veritable phoenix over the last two yearsfrom the depths of the Great Recession, and the performanceof the Tweedy, Browne mutual Funds have also respondedfavorably. 2010 was another good year for our shareholders.

Performance Results

The S&P 500 and the MSCI EAFE Index in U.S. dollarsare now up around 100% from the depths of the financial crisisand the lows of early March 2009. Our Funds have performedsurprisingly well during this very robust period in equitymarkets. Our relative outperformance in 2008 was notsurprising, since most value investors like us tend to hold upbetter when the market goes into a tailspin. However, it wasunexpected that our Funds would do as well as they did in 2009and 2010 as the markets returned to risk with a vengeance.This was in part due to our paring back of financials in late

2007 and 2008, and the redeployment of the resulting cash inwhat we consider to be more transparent, better businesses thatwere punished by the market downdraft and became unusuallycheap during the heat of the crisis. In many respects, we thinkit was a generational opportunity to buy wonderful businesses,and we were fortunate to have the cash available to do it.

With the first calendar quarters advance, the TweedyBrowne Global Value Fund is only 6.5% shy of recouping thdecline it experienced during the financial crisis (Oct. 07 Mar. 09), while the Value Fund is already in the black b

roughly 3.5%. The Worldwide High Dividend Yield ValuFund is only 0.28% away from drawing even as well. Markeindices such as the MSCI EAFE Index and the MSCI WorlIndex have considerably further to go to get back to even.

Our two newer Funds, the Tweedy, Browne WorldwidHigh Dividend Yield Value Fund and the Tweedy, BrownGlobal Value Fund II Currency Unhedged, have alsoperformed satisfactorily with each Fund besting its benchmarkindex on an annualized return basis net of fees by 308 and 274basis points, respectively, since inception.

Presented below are investment results of the four TweedyBrowne mutual Funds, through March 31, 2011, withcomparisons to the indices we consider relevant.*


Return after MSCIReturn Taxes on EAFE MSCI

Return after Distributions & Index(1)(2) EAFEPeriod Ended before Taxes on Sale of Fund (Hedged Index(1)(2)

3/31/11 Taxes* Distributions** Shares** to US$) (in US$)

3 Months 1.43% 1.43% 0.93% 0.89% 3.37%

6 Months 8.43 8.49 6.01 6.67 10.20

1 Year 10.59 10.64 7.42 2.28 10.42

3 Years 2.57 1.99 2.28 -1.71 -3.01

5 Years 3.23 2.56 2.89 -1.48 1.30

10 Years 6.53 6.02 5.74 1.41 5.38

15 Years 9.41 8.20 7.88 4.60 4.73

Since Inception

(6/15/93)(3) 10.24 9.16 8.79 5.29 5.53Total Annual Fund Operating Expense Ratios as of 3/31/10 and 3/31/11


Tweedy, Browne Global Value Fund II

Currency Unhedged

Return after MSCIReturn Taxes on MSCI EAFE

Return after Distributions & EAFE Index(1)(2)

Period Ended before Taxes on Sale of Fund Index(1)(2) (Hedged3/31/11 Taxes* Distributions** Shares** (in US$) to US$)

3 Months 3.97% 3.97% 2.58% 3.37% 0.89%

6 Months 9.08 8.96 6.05 10.20 6.67

1 Year 13.00 12.88 8.61 10.42 2.28

Since Inception(10/26/09)(3) 11.02 10.94 9.40 8.28 6.48

Gross Annual Operating Expense Ratios as of 3/31/10 and 3/31/11


Net Annual Operating Expense Ratios as of 3/31/10 and 3/31/11were 1.38% and 1.42%, respectively


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II-3


Return after MSCIReturn Taxes on World

Return after Distributions & Index(1)(4)

Period Ended before Taxes on Sale of Fund (Hedged3/31/11 Taxes* Distributions** Shares** to US$) S&P 500(1)(5)

3 Months 2.80% 2.80% 1.82% 3.53% 5.92%

6 Months 10.57 9.58 8.14 12.18 17.31

1 Year 8.77 7.79 6.95 9.30 15.65

3 Years 4.79 3.74 3.90 0.35 2.36

5 Years 3.81 2.60 3.11 - 2.63

10 Years 3.94 2.98 3.22 - 3.29

15 Years 7.39 6.38 6.25 - 6.79

Since Inception

(12/8/93)(3) 8.69 7.77 7.54 - 8.25



Tweedy, Browne Worldwide

High Dividend Yield Value Fund

Return afterReturn Taxes on MSCI

Return after Distributions & WorldPeriod Ended before Taxes on Sale of Fund Index(1)(4)

3/31/10 Taxes* Distributions** Shares** (in US$)3 Months 5.66% 5.66% 3.68% 4.80%

6 Months 10.45 10.30 6.98 14.18

1 Year 13.03 12.77 9.00 13.45

3 Years 2.05 1.42 1.46 -0.25

Since Inception

(9/5/07)(3) 0.94 0.41 0.57 -2.14

30-Day Standardized Yield (Subsidized) as of 3/31/11: 2.39%

30-Day Standardized Yield (Unsubsidized) as of 3/31/11: 2.36%

Gross Annual Fund Operating Expense Ratios as of 3/31/10 and 3/31/11


Net Annual Operating Expense Ratios as of 3/31/10 and 3/31/11 were 1.38% and

1.38%, respectively

* The preceding performance data represents past performance andis not a guarantee of future results. Total return and principal valueof an investment will fluctuate so that an investors shares, whenredeemed, may be worth more or less than their original cost. Thereturns shown do not reflect the deduction of taxes that a shareholderwould pay on Fund distributions or the redemption of Fund shares.Current performance may be lower or higher than the performancedata shown. Please visit www.tweedy.com to obtain performancedata, which is current to the most recent month end. See page II-5for footnotes 1 through 5, which describe the indices and inceptiondates of the Funds. Results are annualized for all periods greater thanone year.

** After-tax returns are calculated using the historical highestindividual federal marginal income tax rates, and do not reflect theimpact of state and local taxes. Returns after taxes on distributionsare adjusted for federal income taxes associated with funddistributions, but do not reflect the federal income tax impact of gainsor losses recognized when fund shares are sold. Returns after taxeson distributions and sale of fund shares are adjusted for federalincome taxes associated with fund distributions and reflect the federalincome tax impact of gains or losses recognized when fund shares aresold. Actual after-tax returns depend on an investors tax situationand may differ from those shown, and the after-tax returns shown

are not relevant to investors who hold their fund shares through taxdeferred arrangements such as 401(k) plans or individual retiremenaccounts.

The Funds do not impose any front-end or deferred sales chargeHowever, the Tweedy, Browne Global Value Fund, TweedyBrowne Global Value Fund II Currency Unhedged and TweedyBrowne Worldwide High Dividend Yield Value Fund impose a 2%redemption fee on redemption proceeds for redemptions or exchange

made within 60 days of purchase. Performance data does not reflecthe deduction of the redemption fee, and if reflected, the redemptionfee would reduce the performance data quoted for periods of 60 dayor less. The expense ratios shown above reflect the inclusion oacquired fund fees and expenses and may differ from those shown inthe Funds financial statements.

Tweedy, Browne Company LLC (the Adviser) hacontractually agreed to waive its investment advisory feand/or to reimburse expenses of the Worldwide High DividenYield Value Fund and Global Value Fund II CurrencUnhedged to the extent necessary to maintain the total annuafund operating expenses (excluding fees and expenses frominvestments in other investment companies, brokerageinterest, taxes and extraordinary expenses) at no more than1.37%. This arrangement will continue at least throughDecember 31, 2012. In this arrangement the Worldwide HighDividend Yield Value Fund and Global Value Fund II Currency Unhedged have agreed, during the two-year periofollowing any waiver or reimbursement by the Adviser, to repasuch amount to the extent that after giving effect to suchrepayment such adjusted total annual fund operating expensewould not exceed 1.37% on an annualized basis. Thperformance data shown above would be lower had fees andexpenses not been waived and/or reimbursed.

Please note that individual companies discussed herein represenholdings in the Tweedy, Browne Funds, but are not necessarily helin all four Tweedy, Browne Funds. See the attached Portfolios oInvestments for the Funds holdings in each of these companies.

Our Funds Portfolios

Since our last report in September 2010, global equitmarkets have had quite a run. The MSCI World Index is up indouble digits in both hedged and unhedged currency. OuFunds also did quite well during this period. Our returns in locacurrency, i.e., how our stocks performed independent of thimpact of foreign currency, were driven in large part b

continued strong returns in our branded consumer productcompanies. Most notable were tobacco stocks, such as PhiliMorris International and British American Tobacco, and oufood and beverage holdings, including Nestle, DiageoHeineken, and two of our Mexican Coca-Cola bottlersEmbotelladoras Arca and Contal, which announced that thewere merging in January. Our financial stocks also producevery good returns during this period, more specifically, banstocks such as Bangkok Bank and Bank of New York Mellonthe publicly traded diversified holding company, Leucadi


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II-4

National; insurance holdings such as the large Germanreinsurer, Munich Re; the French life insurance company, CNPAssurances; the Swiss multi-line insurer, Zurich Financial; andthe U.S.-based insurance broker, Brown & Brown. Our oil andgas stocks continued to produce strong returns as well, as oilprices continued to increase. As the global economy developedsome momentum, several of our media and industrial holdingscontinued their rather robust recovery, including companiessuch as Axel Springer, the German publishing company;Gestevision Telecinco, the Spanish television broadcaster;Linde, the German industrial gas company; and Union Pacific,the U.S.-based Western rail company.

There were only a modest number of companies in ourFunds portfolios that produced negative returns over the lastsix months. This group included pharmaceutical holdings suchas Novartis, Johnson & Johnson, and Roche, and some of our Japanese and Korean holdings such as Canon, T. Hasegawa,and Samchully. With rising concerns about their future pricingpower and the expiration of patents, pharmaceuticalcompanies these days trade in the stock market like utilitystocks, i.e., at low price/earnings ratios and high dividendyields. Novartis, J&J and Roche all trade today around 10 times

earnings and have dividend yields between 3.5% and 5%, butwe believe characterizing them as utilities would be a mistake.Novartis and J&J have valuable consumer products businessesto complement their ethical drug businesses, and Roche, withits acquisition of Genentech, is the industry leader in biologicalpharmacology. None of these companies face the patent cliffsof companies like Pfizer and Eli Lilly, and all of them haveexciting new drugs in their pipeline. We believe they shouldcontinue to grow as baby boomers move into retirement, andwe are being paid a very attractive and growing dividend whilewe wait for market sentiment to change.

Our rather modest position in Japanese stocks producedsolid returns since our last report despite a relatively smalldecline at quarter end due in large part to the tragic earthquakeand its nuclear aftermath. The Japanese situation is unfolding,and still quite uncertain. The potential for electrical powershortages and the implications it has for production are seriousconcerns, along with the impact on Japanese consumerconsumption. That said, our exposure is reasonable, and we arecomfortable with the investments we have made. The majorityof our Japanese exposure is in companies that are majorexporters, which leaves them less dependent upon domesticdemand. The next couple of quarters will be difficult, but theresilience of the Japanese people and their industries over thelonger term has been enviable.

The Specter of Inflation

Concern over the prospects for inflation seem increasinglywidespread today, with the notable exception of our FederalReserve, where Ben Bernanke continues to print dollars in aneffort to boost what has been, to date, a rather sluggishrecovery. In fact, Bernanke has suggested on more than oneoccasion that we have too little inflation. On the other side ofthe table, Paul Ryan, the Ranking Member of the HouseBudget Committee, said recently, The inflation dynamic canbe quick to materialize and painful to eradicate once it takeshold. Its hard to overstate the consequences of getting thiswrong.b Echoing Ryans concerns, the European Central Bank

(ECB), the Chinese, and even countries such as Brazil, havbegun to raise their interest rates in an attempt to dampen thithreat to purchasing power.

To that end, last Fall in our Semi-Annual Report, we wento great pains to point out the impact that even modest levelof inflation can have on purchasing power over time. As yowill recall, assuming an annual inflation rate of 4% and a tenyear time horizon, $1,000 today would have purchasing powe

of approximately $664.83 in ten years time, representing decline in purchasing power of 33.5%.

While inflation has remained at relatively low levels fomany years now, we have had plenty of inflation in the past anwe think that given our countrys increasing fiscal deficits andaggressive monetary policies, the probabilities that it couldonce again raise its ugly head have increased of late. The lasserious bout of inflation that we faced was back in the 1970sAs we pointed out in our Semi-Annual Report, IbbotsonSinquefield data indicates that for the ten-year period 1973 to1982, inflation was running at an average annual rate of 8.7%per year. From 1977 to 1981 inflation increased at 10.1% peyear. Prices more than doubled over this ten-year periodeffectively wiping out much of our dollars purchasing power

Our country has had other periods of hyper-inflation, includinduring both the Revolutionary and Civil Wars and, accordinto Jason Zweig, we have not been alone. Since 1960, 69% othe worlds market-oriented countries have suffered at least onyear in which inflation ran at an annualized rate of 25% omore. On average, those inflationary periods destroyed 53% oan investors purchasing power.c

Today, there is increasing evidence that inflation may bheaded our way. Inflation rates are climbing all over the worldparticularly in the emerging markets, fueled in large part bsurging commodity and food prices. According to the Februar3, 2011 issue of The Economist, inflation stands at 4.6% inChina, 5.9% in Brazil and almost 10% in India.d Euro-zon

inflation rose to 2.4% in January, above targeted levels. ThUK inflation rate hit 3.7% in December and the Governor othe Bank of England has warned that it is expected to climb toas much as 4% to 5%. This rising tide of inflation has yet toreally hit the beaches of America, where a high unemploymenrate and a soft housing market continue to keep the lid onprices. Nevertheless, according to The Wall Street Journaconsumer prices were up 1.6% in January year over year, whichwas the biggest increase in that index in 8 months. The pricof gasoline, together with many popular food items, has gonup, while service sector inflation remains low, keeping overainflation rates at seemingly benign levels.b

Very truly yours,

TWEEDY, BROWNE COMPANY LLC

William H. Browne

Thomas H. Shrager

John D. Spears

Robert Q. Wyckoff, Jr.

Managing Directors

May 6, 2011


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II-5

References:

a. Kharas, Homi & Gertz, Geoffrey, Wolfensohn Center forDevelopment at Brookings, The New Global Middle Class:A Cross-Over from West to East. Draft version of Chapter2 in Chinas Emerging Middle Class: Beyond EconomicTransformation (Cheng Li, editor), Washington, DC,Brookings Institution Press, 2010 (forthcoming), pp. 5-6(chart), p. 7 (quote).

b. Hilsenrath, John and Lahart, Justin, Split in EconomyKeeps Lid on Prices, The Wall Street Journal, February 18,2011.

c. Benjamin Graham with New Commentary from JasonZweig, The Intelligent Investor (HarperCollins, RevisedEdition, 2003) pp. 59-60.

d. Parsing Prices. The Economist, February 3, 2011.

Portfolio company data and information contained herein wasgenerally sourced from proprietary research, Wall Streetreports, the companies annual reports, and in some instances,financial press coverage.

Footnotes:

(1) Indexes are unmanaged, and the figures for the indexes showninclude reinvestment of dividends and capital gainsdistributions and do not reflect any fees or expenses. Investorscannot invest directly in an index. We strongly recommendthat these factors be considered before an investment decisionis made.

(2) MSCI EAFE Index US$ is an unmanaged capitalization-weighted index of companies representing the stock markets ofEurope, Australasia and the Far East. MSCI EAFE IndexHedged consists of the results of the MSCI EAFE Indexhedged 100% back into US dollars and accounts for interestrate differentials in forward currency exchange rates. Resultsfor both indexes are inclusive of dividends and net of foreignwithholding taxes.

(3) Inception dates for the Global Value Fund, Global ValueFund II Currency Unhedged, Value Fund and WorldwideHigh Dividend Yield Value Fund were June 15, 1993,October 26, 2009, December 8, 1993, and September 5,2007, respectively. Information with respect to MSCI EAFEindexes used is available at month end only; therefore theclosest month end to the Global Value Funds inception date,May 31, 1993, was used.

(4) The MSCI World Index is a free float-adjusted markecapitalization weighted index that is designed to measure thequity market performance of developed markets. The MSCWorld Index (US$) reflects the return of this index for a USdollar investor. MSCI World Index (Hedged to US$) consistof the results of the MSCI World Index with its foreigncurrency exposure hedged 100% back into US dollars. Th

index accounts for interest rate differentials in forwarcurrency exchange rates. Results for this index are inclusive odividends and net of foreign withholding taxes. We includresults of the MSCI World Index for the Value Fund sincNovember 30, 2006, which was the approximate date of thValue Funds mandate change from a restriction of 20%non-US investments.

(5) S&P 500 Index is an unmanaged capitalization weighteindex composed of 500 widely held common stocks listed onthe New York Stock Exchange, American Stock Exchangand over-the-counter market and includes the reinvestment odividends.

Tweedy, Browne Global Value Fund, Tweedy, Browne GlobaValue Fund II Currency Unhedged, Tweedy, Browne ValuFund, and Tweedy, Browne Worldwide High Dividend YieldValue Fund are distributed by Tweedy, Browne Company LLC

Current and future portfolio holdings are subject to risk

Investing in foreign securities involves additional risks beyonthe risks of investing in U.S. securities markets. These riskinclude currency fluctuations; political uncertainty; differenaccounting and financial standards; different regulatorenvironments; and different market and economic factors invarious non-U.S. countries. In addition, the securities of smallless well known companies may be more volatile than thosof larger companies. Value investing involves the risk that thmarket will not recognize a securitys intrinsic value for a lontime, or that a security thought to be undervalued may actuall be appropriately priced when purchased. Please refer to thFunds prospectus for a description of risk factors associated with

investments in securities which may be held by the Funds.

This material must be preceded or accompanied by a prospectufor Tweedy, Browne Fund Inc.


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Expense Information (Unaudited)

II-6

Hypothetical ExpensesActual Expenses (5% Return before Expenses)

Expenses ExpensesBeginning Ending Paid during Beginning Ending Paid duringAccount Account Period* Account Account Period*

Value Value 10/1/10 Value Value 10/1/10 Expense10/1/10 3/31/11 3/31/11 10/1/10 3/31/11 3/31/11 Ratio

Global Value Fund $1,000 $1,106 $7.30 $1,000 $1,018 $6.99 1.39%

Global Value Fund II -Currency Unhedged $1,000 $1,130 $7.28 $1,000 $1,018 $6.89 1.37%

Value Fund $1,000 $1,088 $7.23 $1,000 $1,018 $6.99 1.39%

Worldwide High DividendYield Value Fund $1,000 $1,130 $7.28 $1,000 $1,018 $6.89 1.37%

* Expenses are equal to each Funds annualized expense ratio, multiplied by the average account value over theperiod, multiplied by the number of days in the period, divided by 365 (to reflect the one-half year period).

A shareholder of the Global Value Fund, Global ValueFund II - Currency Unhedged, Value Fund or Worldwide HighDividend Yield Value Fund (collectively, the Funds) incur

57843624 Tweedy Browne 2010 Shareholder Letter

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Transcript of 57843624 Tweedy Browne 2010 Shareholder Letter