Artisan Partners, a high value-added investment management firm, published its ‘Artisan Global Discovery Fund’ second quarter 2021 investor letter – a copy of which can be downloaded here. A return of 10.28% was recorded by its Investor Class: APFDX, 10.27% by its Advisor Class: APDDX, and 10.35% by its Institutional Class: APHDX for the second quarter of 2021, all beating the MSCI All Country World Index that delivered a 7.39% return 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 Bentley Systems, Incorporated (NASDAQ: BSY) and discussed its stance on the firm. Bentley Systems, Incorporated is an Exton, Pennsylvania-based software company with an $18.4 billion market capitalization. BSY delivered a 61.47% return since the beginning of the year, while its 12-month returns are up by 95.31%. The stock closed at $64.78 per share on September 21, 2021.
Here is what Artisan Partners has to say about Bentley Systems, Incorporated in its Q2 2021 investor letter:
“Among our top contributors (includes) Bentley Systems. Bentley Systems is the leading provider of infrastructure engineering software used to design roads, bridges, tunnels, rail systems and other public works. We believe there is a meaningful opportunity for infrastructure spend on IT over the next decade given an increased focus on improving the productivity and efficiency of design, build and maintenance. In addition, infrastructure is one of the least digitized verticals of the economy (0.5% of spend is on IT), and there are significant opportunities for software to increase its share. We believe this opportunity is particularly compelling not only in the US, where many roads, bridges, ports and water supply systems were built in the 1950s and 1960s, but also in the Asia Pacific region (China, India), which is expected to represent the bulk of global infrastructure spending over the next couple of decades as the region is forecasted to grow to nearly half of global GDP and population.”
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Based on our calculations, Bentley Systems, Incorporated (NASDAQ: BSY) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. BSY was in 17 hedge fund portfolios at the end of the first half of 2021, compared to 22 funds in the previous quarter. Bentley Systems, Incorporated (NASDAQ: BSY) delivered a 6.08% 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.
