ClearBridge Investments, an investment management firm, published its “Global Infrastructure Income Strategy” second quarter 2021 investor letter – a copy of which can be downloaded here. The ClearBridge Global Infrastructure Income Strategy performed within the range of infrastructure indexes, which underperformed
global equities for the 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 ClearBridge Investments, the fund mentioned National Grid plc (NYSE: NGG) and discussed its stance on the firm. National Grid plc is a London, United Kingdom-based utility company with a $43.8 billion market capitalization. NGG delivered a 2.66% return since the beginning of the year, while its 12-month returns are up by 1.13%. The stock closed at $60.60 per share on October 01, 2021.
Here is what ClearBridge Investments has to say about National Grid plc in its Q2 2021 investor letter:
“In Western Europe, U.K. electric utility National Grid contributed the most. National Grid is one of the world’s largest publicly owned utilities, focused on transmission and distribution activities in electricity and gas. It owns and operates regulated electricity and gas network assets in both the U.K. and the U.S., which contribute about 95% of its earnings and equity value. National Grid’s share price increased during the quarter following the announcement of its agreement to acquire WPD, a group of U.K. electricity distribution businesses, and sell part of its U.S. assets. It also announced its intention to dispose of a majority stake in its U.K. gas transmission business.”
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Based on our calculations, National Grid plc (NYSE: NGG) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. NGG was in 7 hedge fund portfolios at the end of the first half of 2021, compared to 9 funds in the previous quarter. National Grid plc (NYSE: NGG) delivered a -5.97% 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.
