The curated database of hedge funds that publish investor letters. Research by geography, strategy, and schools of thought.
| # | Fund | Strategy | Style | Geography | AUM | Latest Letter |
|---|---|---|---|---|---|---|
As of Jun 30, 2024
Ensemble Capital's strategy returned 8.02% in the first half of 2024 versus 15.29% for the S&P 500, with the massive disconnect driven by extreme concentration in a handful of mega-cap stocks. The five largest S&P 500 companies now comprise nearly a quarter of the index, the highest concentration in at least half a century, driven by stocks like Nvidia trading at 70x PE. This mirrors the Dot Com bubble when incumbent leaders captured outsized returns before reverting. The manager maintains their two-decade track record of generating just below 10% annual returns by focusing on individual stock selection rather than index concentration. Recent positions include Analog Devices benefiting from semiconductor cycle recovery, Illumina's undervalued genomics platform, and Veeva Systems' expanding life sciences software moat. They sold Chipotle after 370% gains due to excessive valuation. The strategy expects average stocks to outperform as mega-cap valuations normalize, consistent with historical precedent.
Market concentration has reached extreme levels with mega-cap stocks trading at record valuations, creating unprecedented performance dispersion that will eventually revert to historical norms, benefiting the manager's diversified approach focused on average stock performance rather than index concentration.
The manager expects average stocks to outperform the S&P 500 as valuations normalize, consistent with historical patterns. They plan to maintain their long-term approach that has generated just below 10% annual returns for over two decades. The goal remains to exceed the long-term stock market return rate and outperform over most long-term timeframes.
Moderate Conviction Bullish
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