Polen Capital, an investment management firm, published its “Polen International Growth” second quarter 2021 investor letter – a copy of which can be downloaded here. A return of 5.57% was delivered by the fund for the Q2 of 2021, outperforming its MSCI All Country World benchmark that delivered a 5.47% return 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 Polen Capital, the fund mentioned LVMH Moët Hennessy – Louis Vuitton, Société Européenne (NYSE: LVMUY) and discussed its stance on the firm. LVMH Moët Hennessy – Louis Vuitton, Société Européenne is a Paris, France-based luxury goods company with a $368.3 billion market capitalization. LVMUY delivered a 16.71% return since the beginning of the year, extending its 12-month returns to 53.82%. The stock closed at $146.95 per share on August 25, 2021.
Here is what Polen Capital has to say about LVMH Moët Hennessy – Louis Vuitton, Société Européenne in its Q2 2021 investor letter:
“Paris-headquartered luxury goods maker Louis Vuitton Moet Hennessy (LVMH) delivered favorable financial results during the past quarter. Although rolling coronavirus lockdowns continued into 2021 and kept numerous LVMH stores closed, these results indicate to us that the pandemic’s impact is passing. Strength in numerous categories from Fashion and Leather goods to Wines and Spirits and across continents imply, in our opinion, a broad-based recovery in demand for luxury goods. In high fashion, both Louis Vuitton and Christian Dior maintained their leadership, which we believe suggests that the largest luxury brands are continuing to take market share from smaller competitors. Tiffany is showing a promising start to the year, but management cautioned that turning this recently acquired business around would take “years, not quarters.” E-commerce continues to power results during lockdowns. Despite recent strength, online LVMH management believes luxury shopping will be an omnichannel experience, with discovery happening online but purchases happening in stores. We think LVMH is poised to continue growing its total returns to shareholders at a low double-digit rate over the coming five years.”
Based on our calculations, LVMH Moët Hennessy – Louis Vuitton, Société Européenne (NYSE: LVMUY) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. LVMUY was in 2 hedge fund portfolios at the end of the first half of 2021. LVMH Moët Hennessy – Louis Vuitton, Société Européenne (NYSE: LVMUY) delivered a -8.04% 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.