Polen Capital, an investment management firm, has released its second quarter 2021 letter to investors “Polen International Growth” – a copy of which can be found downloaded here. The fund returned 5.57% for the second quarter of 2021, outperforming its benchmark MSCI All Country World which returned 5.47% for the same period. You can check out the top 5 holdings of the fund to get an idea of their top bets for 2021.
In Polen Capital’s Q2 2021 letter to investors, the fund mentions LVMH Moët Hennessy – Louis Vuitton, Société Européenne (NYSE: LVMUY) and discussed his position on the company. LVMH Moët Hennessy – Louis Vuitton, Société Européenne is a luxury goods company based in Paris, France, with a market capitalization of $ 368.3 billion. LVMUY has returned 16.71% year-to-date, extending its 12-month returns to 53.82%. The stock closed at $ 146.95 per share on August 25, 2021.
Here is what Polen Capital has to say about LVMH Moët Hennessy – Louis Vuitton, Société Européenne in its letter to investors Q2 2021:
“Manufacturer of luxury products headquartered in Paris Louis Vuitton Moët Hennessy (LVMH) produced favorable financial results during the last quarter. Although continued coronavirus lockdowns continued until 2021 and kept many LVMH stores closed, these results tell us that the impact of the pandemic is passing. The strength in many categories ranging from fashion and leather goods to wines and spirits and across continents implies, in our opinion, a widespread recovery in demand for luxury goods. In haute couture, Louis Vuitton and Christian Dior have maintained their leadership, which we believe suggests that larger luxury brands continue to take market share from smaller competitors. Tiffany is off to a promising start to the year, but management has warned that the turnaround for this recently acquired company will take “years, not quarters.” Ecommerce continues to drive results during lockdowns. Despite recent strength, LVMH’s online management believes luxury shopping will be an omnichannel experience, with discovery happening online but shopping happening in-store. We believe LVMH is poised to continue increasing its total returns to shareholders at a low double-digit rate over the next five years. “
Based on our calculations, LVMH Moët Hennessy – Louis Vuitton, Société Européenne (NYSE: LVMUY) was unable to secure a place in our list of 30 most popular stocks among hedge funds. LVMUY was in 2 hedge fund portfolios at the end of the first half of 2021. LVMH Moët Hennessy – Louis Vuitton, Société Européenne (NYSE: LVMUY) achieved a return of -8.04% over the past 3 months.
The reputation of hedge funds as savvy investors has been tarnished over the past decade, as their hedged returns could not keep up with the unhedged returns of stock indexes. Our research has shown that small-cap hedge fund stock selection managed to beat the market by double digits every year between 1999 and 2016, but the margin for outperformance has shrunk in recent years. Nonetheless, we were still able to identify in advance a select group of hedge funds that have outperformed S&P 500 ETFs by 115 percentage points since March 2017 (see details here). We were also able to identify in advance a select group of hedge funds that underperformed the market by 10 percentage points per year between 2006 and 2017. Interestingly, the margin of underperformance of these stocks has increased in recent years. Investors who are long in the market and short on these stocks would have reported more than 27% per year 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 was originally published on Monkey initiate.