5 Worst Performing Hedge Funds of 2021

2. Rokos Capital Management

YTD Loss as of December 23, 2021: 25%

Rokos Capital Management is an investment management company based in London. It is managed by Chris Rokos, an Oxford-educated investor with a personal worth of close to $2 billion. One of the main reasons for the lackluster performance of the fund was the bond market upheaval that resulted in losses of around 18% in October alone. The 2021 performance was surprising since the fund had finished 2020, a pandemic-ravaged year, with returns of more than 44%, one of the best years for the firm on record. 

A top holding of Rokos Capital Management is Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), a firm that makes and sells integrated circuits and semiconductors. At the end of the third quarter of 2021, 67 hedge funds in the database of Insider Monkey held stakes worth $9.5 billion in Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), up from 64 in the preceding quarter worth $10 billion. 

In its Q1 2021 investor letter, Bonsai Partners, an asset management firm, highlighted a few stocks and Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) was one of them. Here is what the fund said:

“Taiwan Semiconductor is the world’s largest outsourced foundry of logic semiconductor chips. TSMC’s shares appreciated 8.9% during the quarter.

Similar to last quarter, the supply-demand imbalance in semiconductor chips continues to benefit TSMC. To fuel new technological advances and meet the current supply imbalance, we see significantly increased capital spending across the industry over the coming years.

TSMC has an extraordinary track record of return on these large investments despite their rapid historical cadence of expansion. I remain hopeful that the large capital expenditure plan they now have ($100 billion of investment over the next three years) will be money well spent and not lead to industry oversupply in the medium term. Hopefully, future returns on these investments will look as good as those of the past.”