Perpetual Limited, an investment management firm, published its “Perpetual Global Innovation Fund” second quarter 2021 investor letter – a copy of which can be downloaded here. A quarterly portfolio return of 6.9% was recorded by the fund for the second quarter of 2021, and 38.2% for the financial year. You can view the fund’s top 5 holdings to have an idea about their top bets for 2021.
In the Q2 2021 investor letter of Perpetual Limited, the fund mentioned BioNTech SE (NASDAQ: BNTX), and discussed its stance on the firm. BioNTech SE is a Germany-based biotechnology company, that currently has an $82.2 billion market capitalization. BNTX delivered a 317.10% return since the beginning of the year, while its 12-month returns are up by 297.82%. The stock closed at $328.35 per share on July 30, 2021.
Here is what Perpetual Limited has to say about BioNTech SE in its Q2 2021 investor letter:
“BioNTech, the German developer of the Pfizer Covid-19 vaccine, was the biggest contributor to performance during the quarter. We bought a position in February and added to it in April on the thesis that MRNA technology would be the biggest beneficiary of Covid variants and that revenue from the vaccine would be funnelled into an exciting pipeline of oncology treatments, making them one of the world’s best-funded biotech startups. The stock rallied almost 100% from our buy price by June, leading us to reduce the position. We loved BioNTech at $118 but reduced the position above $230 in favour of other positions. However, we continue to be excited about its potential to address variants and its pipeline for the treatment of other diseases.
Based on our calculations, BioNTech SE (NASDAQ: BNTX) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. BNTX was in 18 hedge fund portfolios at the end of the first quarter of 2021, compared to 17 funds in the fourth quarter of 2020. BioNTech SE (NASDAQ: BNTX) delivered a 62.75% 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.
