Artisan Partners, a high value-added investment management firm, published its “Artisan Value Fund” second quarter 2021 investor letter – a copy of which can be downloaded here. A return of 7.77% was recorded by its Investor Class: ARTLX, 7.81% by its Advisor Class: APDLX, and 7.87% by its Institutional Class: APHLX for the second quarter of 2021, all beating the Russell 1000® Value Index that delivered a 5.21% return, but below the Russell 1000® Index that gained 8.54% 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 Artisan Partners, the fund mentioned Air Lease Corporation (NYSE: AL) and discussed its stance on the firm. Air Lease Corporation is a Los Angeles, California-based aircraft leasing company with a $4.4 billion market capitalization. AL delivered a -12.52% return since the beginning of the year, while its 12-month returns are up by 43.18%. The stock closed at $37.38 per share on September 22, 2021.
Here is what Artisan Partners has to say about Air Lease Corporation in its Q2 2021 investor letter:
“Airplane leasing firm Air Lease had performed well in the pandemic reopening trade. Their subsequent weakness reflects that trade’s slowing momentum in Q2 as virus variants surged globally and rising uncertainty weighed on economic growth expectations. Still, we remain confident in this business. Each are leaders in their respective industries with wide moats and superior business economics. Each is led by a battle-tested management team we believe is executing well on appropriately set strategy to deliver shareholder value. They are carefully and wisely financed, and they have undemanding valuations based on normalized earnings power.”
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Based on our calculations, Air Lease Corporation (NYSE: AL) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. AL was in 22 hedge fund portfolios at the end of the first half of 2021, compared to 27 funds in the previous quarter. Air Lease Corporation (NYSE: AL) delivered a -12.44% 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.
