Ariel Investments, an investment management firm, published its fourth-quarter 2020 investor letter – a copy of which can be downloaded here. In the fourth quarter of 2020, a return of 31.56% was recorded by Ariel fund, 23.57% by Ariel Appreciation Fund, 21.62% by Ariel Focus Fund, 8.26% by Ariel International Fund, and 9.80% return by Ariel Global Fund. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.
Ariel Investments, in their Q4 2020 investor letter, mentioned BorgWarner Inc. (NYSE: BWA) and emphasized their views on the company. BorgWarner Inc. is a Michigan-based automotive company. It currently has an $10.9 billion market capitalization.
Here is what Ariel Investments has to say about BorgWarner Inc. in their Q4 2020 investor letter:
“BorgWarner, Inc. was essentially flat in the quarter, underperforming a strong market. Many believe BWA will be hurt by a transition from gas powered cars to electric vehicles (“EV’s”). The company’s turbochargers and powertrain products rely on intellectual property tied to petroleum-based technology. Although the company has worked hard to increase its market share in the EV powertrain market, particularly with the acquisition of Delphi Technologies, we believe the company does have negative exposure to the rapid conversion to an all EV new car fleet. But we believe that this conversion will be gradual, giving BorgWarner time to alter its product offerings accordingly. We continue to monitor developments closely.”
Our calculations show that BorgWarner Inc. (NYSE: BWA) 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, BorgWarner Inc. was in 27 hedge fund portfolios, compared to 30 funds in the third quarter. BWA delivered a 27.54% return in the past 3 months.
The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.
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Disclosure: None. This article is originally published at Insider Monkey.