Artisan Partners Limited Partnership, a high value-added investment management firm, published its ‘Artisan Value Fund’ fourth quarter 2020 investor letter – a copy of which can be downloaded here. A return of 20% was recorded by its Investor Class: ARTLX, 20.05% by its Advisor Class: APDLX, and 20.07% by its Institutional Class: APHLX, in the fourth quarter of 2020, all outperformed its Russell 1000 Value Benchmark that delivered a 16.25% return and its Russel 1000 Index that was up by 13.69% in the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.
Artisan Value Fund, in their Q4 2020 investor letter, mentioned CME Group Inc. (NASDAQ: CME) and emphasized their views on the company. CME Group Inc. is a Chicago, Illinois-based derivatives marketplace that currently has a $73.2 billion market capitalization. Since the beginning of the year, CME delivered an 11.91% return, extending its 12-month gains to 28.62%. As of March 18, 2021, the stock closed at $205.78 per share.
Here is what Artisan Value Fund has to say about CME Group Inc. in their Q4 2020 investor letter:
“New purchases include CME Group. CME Group is a global securities and commodities exchange company, specializing in futures and derivatives. As one of the four big US exchanges, CME is well-positioned to outperform peers who are more concentrated in single stock equities or cash securities transactions. Unlike a single stock which can trade on any venue, futures are unique to the exchange on which they are offered due to margin requirements and proprietary rights, contributing to a wide moat. Interest rate futures and derivatives exhibit cyclical swings within a secular growth path. We purchased CME at what we believe is the trough of its earnings cycle and hope to benefit as the Federal Reserve slowly steps back from markets over time, which should increase interest rate volatility. Ultimately, this is a cash-generative, high margin business with stellar business economics that returns all excess cash flow to shareholders in the form of regular and special annual dividends. With an undemanding valuation on trough earnings, CME is a great example of our process at work.”
Our calculations show that CME Group Inc. (NASDAQ: CME) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, CME Group Inc. was in 58 hedge fund portfolios, compared to 59 funds in the third quarter. CME delivered a 10.70% return in the past 3 months.