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Baron FinTech Fund: “Alibaba (BABA)’s Core Business Remains Highly Profitable”

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Jose Karlo Mari Tottoc
·3 min read
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Baron Funds, an investment management firm, published its fourth quarter 2020 “Baron FinTech Fund” investor letter – a copy of which can be downloaded here. A return of 13.61% was recorded by its Retail Shares, and 13.67% by its Institutional Shares in the fourth quarter of 2020, both below its FactSet Global FinTech Benchmark that delivered a 21.35% return but above its S&P 500 index that was up by 12.15% in the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Baron FinTech Fund, in their Q4 2020 investor letter, mentioned Alibaba Group Holding Limited (NYSE: BABA) and emphasized their views on the company. Alibaba Group Holding Limited is a Hangzhou, China-based e-commerce company that currently has a $654.8 billion market capitalization. Since the beginning of the year, BABA delivered a 3.28% return, impressively extending its 12-month gains to 29.40%. As of March 22, 2021, the stock closed at $237.12 per share.

Here is what Baron FinTech Fund has to say about Alibaba Group Holding Limited in their Q4 2020 investor letter:

"Alibaba Group Holding Limited is the largest retailer and E-commerce company in China. company in China. Alibaba operates shopping platforms Taobao and Tmall and owns 33% of Ant Group, which operates Alipay, China's largest online payment provider. Shares were down on the news that Chinese regulators had launched an investigation into Alibaba for suspected monopolistic behavior. We continue to believe Alibaba's core business remains highly profitable, complemented by rapid growth in the cloud business and inflection in the Cainiao logistics and New Retail segments."

Alibaba Group Holding Ltd (NYSE:BABA), Logo, big sign, People taking photos, offering, ipo, group, stock
Alibaba Group Holding Ltd (NYSE:BABA), Logo, big sign, People taking photos, offering, ipo, group, stock

Christopher Penler / Shutterstock.com

Our calculations show that Alibaba Group Holding Limited (NYSE: BABA) ranks 7th in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, Alibaba Group Holding Limited was in 156 hedge fund portfolios, compared to 166 funds in the third quarter. SQ delivered a -6.14% return in the past 3 months.

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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Disclosure: None. This article is originally published at Insider Monkey.