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 ABB Ltd (NYSE: ABB) and discussed its stance on the firm. ABB Ltd is a Zürich, Switzerland-based automation company with a $75.3 billion market capitalization. ABB delivered a 34.33% return since the beginning of the year, while its 12-month returns are up by 48.63%. The stock closed at $37.18 per share on September 1, 2021.
Here is what Artisan Partners has to say about ABB Ltd in its Q2 2021 investor letter:
“ABB is a Swiss-based industrial conglomerate. Last year, new management launched a process to improve performance and focus company resources, and it’s paying off. During the quarter, the company reported terrific results exhibiting improvements over both last year’s depressed figures and over the 2019 revenue and profit run rate. Further, management announced plans to simplify the company’s structure by selling off or separately listing several of the company’s non-core businesses.”
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Based on our calculations, ABB Ltd (NYSE: ABB) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. ABB was in 15 hedge fund portfolios at the end of the first half of 2021, compared to 11 funds in the previous quarter. ABB Ltd (NYSE: ABB) delivered an 8.45% 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.
