Harding Loevner, an investment management firm, published its “Emerging Markets Equity Fund” second-quarter 2021 investor letter – a copy of which can be downloaded here. A return of 5.62% was recorded by the fund for the Q2 of 2021, above the 5.12% return of the MSCI Emerging Markets Index for the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021. 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 Harding Loevner, the fund mentioned EPAM Systems Inc. (NYSE: EPAM) and discussed its stance on the firm. EPAM Systems Inc. is a Newtown, Pennsylvania-based software engineering company with a $35.1 billion market capitalization. EPAM delivered a 75.20% return since the beginning of the year, while its 12-month returns are up by 94.41%. The stock closed at $629.53 per share on September 23, 2021.
Here is what Harding Loevner has to say about EPAM Systems Inc. in its Q2 2021 investor letter:
“By sector, good stocks in Information Technology (IT) and Consumer Staples were large positive contributors, offset by weaker results in Financials and Consumer Discretionary. EPAM, the Eastern European-centered (but US-Listed) software engineering company, continued to benefit from the acceleration in demand for digital transformation projects and customers’ consolidation of their technology service providers.”
Photo by Danial Igdery on Unsplash
Based on our calculations, EPAM Systems Inc. (NYSE: EPAM) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. EPAM was in 33 hedge fund portfolios at the end of the first half of 2021, compared to 24 funds in the previous quarter. EPAM Systems Inc. (NYSE: EPAM) delivered a 19.93% 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.
