Harding Loevner, an investment management firm, published its “Global Equity Fund” second-quarter 2021 investor letter – a copy of which can be downloaded here. A return of 10.70% was recorded by the fund for the Q2 of 2021, beating its Benchmark, the MSCI World Index, which returned 7.89% 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 Harding Loevner, the fund mentioned NVIDIA Corporation (NASDAQ: NVDA) and discussed its stance on the firm. NVIDIA Corporation is a Santa Clara, California-based computer systems design services company with a $550.2 billion market capitalization. NVDA delivered a 69.14% return since the beginning of the year, while its 12-month returns are up by 71.52%. The stock closed at $220.81 per share on September 23, 2021.
Here is what Harding Loevner has to say about NVIDIA Corporation in its Q2 2021 investor letter:
“Within IT, shares of US-based computer chip developer NVIDIA continued their climb as rising demand across segments-from work-from-home laptops to data centers to cryptocurrency mining rigs-led to shortages that translated into surging prices for its chips. Such was the windfall that NVIDIA even made technical changes to some of its products to make them towards waht it believes are more sustainable uses. Less attractive to cryptocurrency miners, to steer scarce supply viewed by geography, the lion’s share of excess returns came from good stock performance in the US. In addition to the contributions from NVIDIA and our health care holdings, a pair of IT software and service providers also aided relative returns.”
Photo by Javier Esteban on Unsplash
Based on our calculations, NVIDIA Corporation (NASDAQ: NVDA) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. NVDA was in 86 hedge fund portfolios at the end of the first half of 2021, compared to 80 funds in the previous quarter. NVIDIA Corporation (NASDAQ: NVDA) delivered a 16.03% 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.
