ClearBridge Investments, an investment management firm, published its “All Cap Growth Strategy” first quarter 2021 investor letter – a copy of which can be downloaded here. The ClearBridge All Cap Growth Strategy outperformed its Russell 3000 Growth Index benchmark during the first quarter. On an absolute basis, the Strategy had gains across eight of the 10 sectors in which it was invested (out of 11 sectors total). You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.
In the Q1 2021 Investor Letter, the fund spoke about two semiconductor stocks NXP Semiconductors N.V. (NASDAQ:NXPI) and ASML Holding NV (NASDAQ:ASML). In the last three months, NXP Semiconductors N.V. (NASDAQ:NXPI) stock gained 1.5%, while ASML Holding NV (NASDAQ:ASML) stock gained 29%. Here is what the fund said:
"Within IT, we have also increased exposure to a cyclical semiconductor industry currently working through a severe supply shortage due to several years of capacity reductions, COVID-19 shutdowns and one-off production delays as well as demand resilience in areas like autos and smartphones. Two recent additions, specialty semiconductor maker NXP Semiconductors and semiconductor capital equipment firm ASML also delivered strong performance in the first quarter. NXP rose as auto production ramped up and electric vehicle sales continued to expand. ASML, which operates in a virtual monopoly for high-end chipmaking equipment, began to exert pricing power as it works through an order backlog that has stretched to over a year. Both are Dutch-based companies and out-of-benchmark names that provide access to different growth profiles than are available in the U.S. The main risk for semiconductors is short-term revenue pressure until capacity catches up with demand, which hurt wireless chipmaker Qualcomm. Looking past current constraints, we expect the industry to see a strong second half and solid growth in 2022."
In Q4 2020, the number of bullish hedge fund positions on NXP Semiconductors N.V. (NASDAQ:NXPI) stock decreased by about 3% from the previous quarter (see the chart here), so a number of other hedge fund managers don't believe in NXPI's growth potential.
In Q4 2020, the number of bullish hedge fund positions on ASML Holding NV (NASDAQ:ASML) stock increased by about 30% from the previous quarter (see the chart here), so a number of other hedge fund managers believe in ASML's growth potential.
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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