Baron Funds, an asset management firm, published its “Baron FinTech Fund” second quarter 2021 investor letter – a copy of which can be downloaded here. A return of 16.79% was delivered by the fund’s institutional shares for the Q2 of 2021, outperforming the S&P 500 Index, which appreciated 8.55%, and the FactSet Global FinTech Index which rose 5.40% 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 Baron Funds, the fund mentioned Intuit Inc. (NASDAQ: INTU) and discussed its stance on the firm. Intuit Inc. is a Mountain View, California-based software company with a $153.9 billion market capitalization. INTU delivered a 48.28% return since the beginning of the year, while its 12-month returns are up by 69.09%. The stock closed at $563.25 per share on September 3, 2021.
Here is what Baron Funds has to say about Intuit Inc. in its Q2 2021 investor letter:
“Intuit Inc. is the leading provider of accounting software for small businesses and tax preparation software for individuals and tax professionals. Shares increased on strong quarterly results and raised fullyear guidance. The QuickBooks business is rebounding after last year’s slowdown, the TurboTax business is showing continued share gains and revenue growth, and the recently acquired Credit Karma business generated its highest ever quarterly revenue. We continue to own the stock due to Intuit’s strong competitive position and numerous growth opportunities.”
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Based on our calculations, Intuit Inc. (NASDAQ: INTU) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. INTU was in 66 hedge fund portfolios at the end of the first half of 2021, compared to 68 funds in the previous quarter. Intuit Inc. (NASDAQ: INTU) delivered a 21.93% 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.
