Polen Capital, an investment management firm, published its “Polen U.S. SMID Company Growth Fund” second quarter 2021 investor letter – a copy of which can be downloaded here. A quarterly gross return of 12.02% was delivered by the fund for the second quarter of 2021, outperforming its Russell 2500 Growth benchmark that delivered a 6.04% gain 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 Polen Capital, the fund mentioned Aspen Technology, Inc. (NASDAQ: AZPN) and discussed its stance on the firm. Aspen Technology, Inc. is a Bedford, Massachusetts-based software company with an $8.7 billion market capitalization. AZPN delivered a -1.32% return since the beginning of the year, while its 12-month returns are up by 2.05%. The stock closed at $127.89 per share on September 8, 2021.
Here is what Polen Capital has to say about Aspen Technology, Inc. in its Q2 2021 investor letter:
“While there were no major outliers during the quarter, the largest detractors (incldues) Aspen Technology. Aspen Technology, the leading supplier of asset optimization software solutions, also performed well fundamentally although is experiencing a more gradual recovery much like Exponent.”
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Based on our calculations, Aspen Technology, Inc. (NASDAQ: AZPN) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. AZPN was in 23 hedge fund portfolios at the end of the first half of 2021, compared to 32 funds in the previous quarter. Aspen Technology, Inc. (NASDAQ: AZPN) delivered a -6.80% 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.
