Oakmark Funds, an investment management firm, published its “Oakmark International Fund” third quarter 2021 investor letter – a copy of which can be seen here. A return of 42.0% was reported by the fund for the fiscal year ended September 30, 2021, outperforming the MSCI World ex U.S. Index, which was 26.5% over the same period. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.
Oakmark Fund, in its Q3 2021 investor letter, mentioned Vipshop Holdings Limited (NYSE: VIPS) and discussed its stance on the firm. Vipshop Holdings Limited is a Guangzhou, China-based e-commerce company with a $7.4 billion market capitalization. VIPS delivered a -60.80% return since the beginning of the year, while its 12-month returns are down by -48.50%. The stock closed at $11.02 per share on November 5, 2021.
Here is what Oakmark Fund has to say about Vipshop Holdings Limited in its Q3 2021 investor letter:
“Vipshop Holdings ADR (China) offers a differentiated value proposition to its customers via its online product sales and distributions services. We like that the business model is asset-light due to inventory being predominantly on consignment and logistics outsourced to a third party. We believe the company should generate meaningful free cash flow moving forward.”
Based on our calculations, Vipshop Holdings Limited (NYSE: VIPS) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. VIPS was in 36 hedge fund portfolios at the end of the first half of 2021, compared to 54 funds in the previous quarter. Vipshop Holdings Limited (NYSE: VIPS) delivered a -37.74% 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.
