ClearBridge Investments, an investment management firm, published its “Global Infrastructure Value Strategy” second quarter 2021 investor letter – a copy of which can be downloaded here. The ClearBridge Global Infrastructure Value Strategy performed well versus the infrastructure benchmark, which underperformed global equities for the quarter. You can take a look at the fund’s top 5 holdings to have an idea about their top bets for 2021.
In the Q2 2021 investor letter of ClearBridge Investments, the fund mentioned Enbridge Inc. (NYSE: ENB) and discussed its stance on the firm. Enbridge Inc. is a Calgary, Canada-based natural gas distribution company with an $81 billion market capitalization. ENB delivered a 25.10% return since the beginning of the year, while its 12-month returns are up by 38.19%. The stock closed at $40.02 per share on October 01, 2021.
Here is what ClearBridge Investments has to say about Enbridge Inc. in its Q2 2021 investor letter:
“On a regional basis, the U.S. and Canada was the top contributor to quarterly performance, of which Canadian energy infrastructure company Enbridge was one of the lead performers. Enbridge owns and operates one of the largest oil and gas pipeline networks in North America. The company also owns regulated gas distribution utilities in Ontario, Canada. Enbridge’s Line 3 Replacement Project received a favorable court ruling regarding the adequacy of its Environmental Impact Statement. This significantly lowers the execution risk for the project and enables the company to place the project into service later in the year.”
Photo by Viktor Kharlashkin on Unsplash
Based on our calculations, Enbridge Inc. (NYSE: ENB) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. ENB was in 19 hedge fund portfolios at the end of the first half of 2021, compared to 22 funds in the previous quarter. Enbridge Inc. (NYSE: ENB) delivered a -1.65% return in the past 3 months.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually 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 is originally published at Insider Monkey.
