Ariel Investments, an investment management firm, published its “Ariel Focus Fund” fourth quarter 2021 investor letter – a copy of which can be downloaded here. Ariel Focus Fund gained +4.95% in the fourth quarter trailing the Russell 1000 Value Index which increased +7.77% and the S&P 500 Index which gained +11.03%. For the full year 2021, Ariel Focus Fund posted a strong absolute return of +21.15% but trailed both the Russell 1000 Value Index and the S&P 500 which rose +25.16% and +28.71%, respectively Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
Ariel Investments, in its Q4 2021 investor letter, mentioned JPMorgan Chase & Co. (NYSE:JPM) and discussed its stance on the firm. Founded in 1968, JPMorgan Chase & Co. (NYSE:JPM) is a New York, New York-based investment banking company with a $412.3 billion market capitalization, and is currently spearheaded by its CEO, Jamie Dimon. JPMorgan Chase & Co. (NYSE:JPM) delivered a -11.81% return since the beginning of the year, while its 12-month returns are down by -6.56%. The stock closed at $139.65 per share on March 21, 2022.
Here is what Ariel Investments has to say about JPMorgan Chase & Co. (NYSE:JPM) in its Q4 2021 investor letter:
“In our view, inflation will not just be a 2021 phenomenon. Inflationary expectations are only now working themselves into the labor market with historically low unemployment, resurgent labor unions, and higher wages. These labor cost pressures are only starting to show up in the Consumer Price Index. The most recent Producer Price Index showed a +9% year over year increase, the highest since it was created in 2010. Higher input prices generally lead to rising consumer prices.
“In our view, inflation will not just be a 2021 phenomenon.”
Consumer balance sheets are in excellent shape with lower unemployment and banked stimulus checks. A recent analysis from JP Morgan Chase (JPM) showed average checking accounts have 50% higher balances than pre-Covid. The U.S. money supply as measured by M2 (a calculation that includes cash, checking accounts, and “near cash” such as money market securities) is up +38% versus year-end 2019. Higher consumer cash holdings and higher money supply mean more spending and demand for goods. Some emphasize supply issues to explain current inflation. Going forward, we see very strong demand as well, too much money chasing too few goods.”
Our calculations show that JPMorgan Chase & Co. (NYSE:JPM) ranks 17th on our list of the 30 Most Popular Stocks Among Hedge Funds. JPMorgan Chase & Co. (NYSE:JPM) was in 107 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 101 funds in the previous quarter. JPMorgan Chase & Co. (NYSE:JPM) delivered a -10.53% return in the past 3 months.
In February 2022, we also shared another hedge fund’s views on JPMorgan Chase & Co. (NYSE:JPM) in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.
Disclosure: None. This article is originally published at Insider Monkey.
