Baron Funds, an asset management firm, published its “Baron Partners Fund” second quarter 2021 investor letter – a copy of which can be downloaded here. An increase of 4.83% was delivered by the fund’s institutional shares for the Q2 of 2021, trailing the Russell Midcap Growth Index which increased 11.07%. 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 Baron Funds, the fund mentioned Manchester United plc (NYSE: MANU) and discussed its stance on the firm. Manchester United plc is an Old Trafford, Stretford-based sports teams and clubs company with a $2.8 billion market capitalization. MANU delivered a 3.35% return since the beginning of the year, while its 12-month returns are up by 14.34%. The stock closed at $17.30 per share on September 3, 2021.
Here is what Baron Funds has to say about Manchester United plc in its Q2 2021 investor letter:
“Manchester United plc is the best-known team in the English Premier League, generating revenue primarily from broadcasting, sponsorship, and licensing. Shares fell on continued pandemic-related impact to commercial and matchday revenues. Investors were also disappointed by the failed attempt to form a new Super League that would have replaced the Champions League and allowed Manchester United to participate each year as a founding member. Despite these setbacks, we view Manchester United as a unique media company with 1.1 billion fans globally and broad appeal that should compound value.”
Photo by Nat Callaghan on Unsplash
Based on our calculations, Manchester United plc (NYSE: MANU) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. MANU was in 12 hedge fund portfolios at the end of the first half of 2021, compared to 16 funds in the previous quarter. Manchester United plc (NYSE: MANU) delivered a 10.54% 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.
