Mawer Investment Management, an investment management firm, published its second-quarter 2021 investor letter – a copy of which can be downloaded here. A return of 3.5% was recorded by the Mawer International Equity Fund for the second quarter of 2021, trailing the International Equity Benchmark, which returned 3.9% for the same period. On the other hand, the Mawer U.S. Equity Fund delivered a 5.7% return, trailing the S&P 500 Index’s 6.9% return for the second quarter. 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 Mawer Investment Management, the fund mentioned Shopify Inc. (NYSE: SHOP) and discussed its stance on the firm. Shopify Inc. is an Ottawa, Canada-based e-commerce company with a $169.9 billion market capitalization. SHOP delivered a 20.20% return since the beginning of the year, while its 12-month returns are up by 32.65%. The stock closed at $1,443.81 per share on September 27, 2021.
Here is what Mawer Investment Management has to say about Shopify Inc. in its Q2 2021 investor letter:
“Many higher growth companies reported strong results amid the pick-up in broad economic activity including Shopify. These higher growth companies tend to have increased sensitivity to a change in discount rates and were supported as long-term interest rates stabilized over the period.”
Photo by Charles Deluvio on Unsplash
Based on our calculations, Shopify Inc. (NYSE: SHOP) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. SHOP was in 85 hedge fund portfolios at the end of the first half of 2021, compared to 91 funds in the previous quarter. Shopify Inc. (NYSE: SHOP) delivered a -7.66% 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.
