Baron Funds, an asset management firm, published its “Baron Real Estate Fund” second quarter 2021 investor letter – a copy of which can be downloaded here. A quarterly return of 4.65% was delivered by the fund’s institutional shares for the Q2 of 2021, below both its MSCI Real Estate and MSCI US REIT benchmarks that delivered 6.99% and 11.74% returns respectively for the same period. 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 Baron Funds, the fund mentioned Latham Group, Inc. (NASDAQ: SWIM) and discussed its stance on the firm. Latham Group, Inc. is a Latham, New York-based residential swimming pools manufacturer with a $2.6 billion market capitalization. SWIM delivered a -32.48% return for the past 3 months and it closed at $22.08 per share on August 13, 2021.
Here is what Baron Funds has to say about Latham Group, Inc. in its Q2 2021 investor letter:
“In the most recent quarter, we participated in the IPO of Latham Group, Inc., the largest manufacturer of fabricated pools globally. We believe this company is well positioned to benefit from several multi-year tailwinds including anticipated strength in the U.S. housing market, a cyclical recovery in new pool construction, and a secular growth opportunity as the company’s fiberglass pools offer several advantages versus most other pool options (concrete and vinyl, for example) including lower costs and maintenance, faster build times, and higher manufacturer profitability.”
Photo by Jared Rice on Unsplash
Based on our calculations, Latham Group, Inc. (NASDAQ: SWIM) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. Latham Group, Inc. (NASDAQ: SWIM) delivered a -20.14% return in the past month.
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.
