Baron Funds: “Lufax Holding Ltd (LU) has a Differentiated Risk-Sharing Model”

Baron Funds, an asset management company, released its “Baron New Asia Fund” second quarter 2022 investor letter. A copy of the same can be downloaded here. The fund declined 7.89% in the second quarter compared to a 9.00% decline for its benchmark index, the MSCI AC Asia ex Japan Index. Driven by the reversal and modest recovery of China-related equities, the fund outperformed its benchmark index and the all-cap growth proxy in the quarter. In addition, you can check the top 5 holdings of the fund to know its best picks in 2022.

Baron Funds discussed stocks like Lufax Holding Ltd (NYSE:LU) in the second quarter investor letter. Headquartered in Shanghai, China, Lufax Holding Ltd (NYSE:LU) provides a financial services platform. On September 9, 2022, Lufax Holding Ltd (NYSE:LU) stock closed at $3.9600 per share. One-month return of Lufax Holding Ltd (NYSE:LU) was -1.00% and its shares lost 50.81% of their value over the last 52 weeks. Lufax Holding Ltd (NYSE:LU) has a market capitalization of $9.052 billion.

Here is what Baron Funds specifically said about Lufax Holding Ltd (NYSE:LU) in its Q2 2022 investor letter:

“As part of our fintech disruption theme, we initiated a position in Lufax Holding Ltd (NYSE:LU) during the quarter. We are encouraged by China’s increased commitment toward policy easing and regulatory support which is creating attractive investment opportunities in several technology related businesses, including Lufax. The company is a leading financial technology platform in China that focuses on lending to underserved small- and medium-sized enterprises (SMEs) and provides wealth management solutions to the middle-income and affluent segments of the population.

In our view, facilitating credit to SMEs is critical for China’s economic success. After a protracted regulatory reboot of the sector, Lufax now stands to benefit from potential government and regulatory support toward the SME segment. The company has an effective distribution strategy and differentiated risk- sharing model compared to traditional lenders, which we believe represents a durable competitive advantage.”

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Lufax Holding Ltd (NYSE:LU) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 15 hedge fund portfolios held Lufax Holding Ltd (NYSE:LU) at the end of the second quarter which was 12 in the previous quarter. In addition, please check out our hedge fund investor letters Q2 2022 page for more investor letters from hedge funds and other leading investors.

Disclosure: None. This article is originally published at Insider Monkey.