Artisan Partners, a high value-added investment management firm, published its ‘Artisan International Value Fund’ second quarter 2021 investor letter – a copy of which can be downloaded here. A return of 6.20% was recorded by its Investor Class: ARTKX, 6.25% by its Advisor Class: APDKX, and 6.27% by its Institutional Class: APHKX for the second quarter of 2021, all outperforming the MSCI EAFE Index that delivered a 5.17% return and the MSCI All Country World ex USA Index that was up by 5.48% for the same period. You can take a look at the fund’s top 5 holdings to have an idea about their top bets for 2021.
In the Q2 2021 investor letter of Artisan Partners, the fund mentioned Imperial Oil Limited (NYSE: IMO) and discussed its stance on the firm. Imperial Oil Limited is a Calgary, Canada-based petroleum refining company with a $19.2 billion market capitalization. IMO delivered a 43.35% return since the beginning of the year, while its 12-month returns are up by 71.03%. The stock closed at $26.15 per share on September 1, 2021.
Here is what Artisan Partners has to say about Imperial Oil Limited in its Q2 2021 investor letter:
“Imperial Oil is Exxon’s Canadian subsidiary. The company owns worldclass oil mining assets that are efficient, operate at large scale with low cash costs and have long useful lives. The company’s share price has recovered from last year’s lows, prompted by a significant increase in the price of oil. In addition, the company’s decision to focus on its existing assets has paid off in terms of improved volume production and free cash flow generation. The share price increased by 27% during the quarter.”
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Based on our calculations, Imperial Oil Limited (NYSE: IMO) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. IMO was in 15 hedge fund portfolios at the end of the first half of 2021, compared to 13 funds in the previous quarter. Imperial Oil Limited (NYSE: IMO) delivered a -19.07% return in the past 3 months.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
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Disclosure: None. This article is originally published at Insider Monkey.
