The global economic landscape is presently going through some uncertainities. Inflationary pressures, rising interest rates, geopolitical tensions and high commodity prices are roiling the capital markets and impacting investment value.
To escape this, investments in hedge funds can be a prudent choice. Experienced hedge fund managers’ expertise lies in their ability to effectively manage clients’ money, especially in turbulent times.
In our Expert Spotlight today, we will look at Chuck Akre, a five-star hedge fund manager of Akre Capital Management LLC, and two of the top stocks in his portfolio.
Middleburg, VA-based Charles T. Akre, fondly known as Chuck, is the Founder, Chairman and Chief Investment Officer of Akre Capital Management.
Akre has worked as a CEO and Director of Research at Johnston, Lemon & Co. He started his own firm, Akre Capital Management, in 1989 and operated it as part of Friedman, Billings, Ramsey & Co. until 1999. In 2000, the firm became independent
According to the TipRanks Star Ranking for top hedge fund managers, Akre bags the first spot among the 378 top Hedge Fund managers covered by TipRanks.
An expert’s Star Ranking on TipRanks is based on three factors: success rate on a portfolio, average return on a stock during a particular period, and statistical significance, which pushes the expert’s rank further as the expert’s number of recommendations or transactions go up.
Additionally, a hedge fund manager’s return on a portfolio is best measured by the Sharpe Ratio, which measures the portfolio returns against risks. A Sharpe Ration greater than one means that the portfolio has higher returns than risks. Akre has a Sharpe Ratio of 6.60.
Over the past 10 years, the portfolio under the management of Akre has given a return of 379.6%. The portfolio managed by Akre has also returned more value to investors compared with the S&P 500.
Top Two Stocks in Akre’s Portfolio
With interest rates rising, financial sector stocks can be an area of focus for investors. Notably, Akre’s portfolio has an exposure of 46.3% to the financial sector with the two notable names being Moody’s (NYSE: MCO) and Mastercard (NYSE: MA).
Moody’s
With an exposure of 12.22%, financial services and ratings major Moody’s occupies a significant portion of Akre’s portfolio.
In 2021, Akre sold Moody’s shares three times and bought just one time. As of the last filed date, the total value of Moody’s shares held stood at $2.2 billion.
Moreover, there has been a 0.02% sequential increase in the holdings of Moody’s shares in the fourth quarter of 2021.
Shares of the company have declined 18.8% since the last filing date.
Overall, the TipRanks’ Hedge Fund Trading Activity tool shows that hedge fund confidence in Moody’s is currently Negative. Moreover, the cumulative change in holdings across all 23 hedge funds that were active in the last quarter was a decrease of 239,500 shares.
Mastercard
New York-based financial services major Mastercard holds a substantial portion of Chuck’s portfolio at 11.72%.
In 2021, Akre sold Mastercard’s shares thrice and bought only once. As of the last filed date, the total value of Mastercard’s shares held stood at $2.11 billion.
Moreover, there has been a 0.05% sequential increase in the holdings of Mastercard’s shares in the fourth quarter of 2021.
Since the last filing date, shares of the company have gained 1.4%.
Overall, the TipRanks’ Hedge Fund Trading Activity tool shows that hedge fund confidence in Mastercard is currently Very Positive. Moreover, the cumulative change in holdings across all 66 hedge funds that were active in the last quarter was an increase of 5.7 million shares.
Parting Thoughts
To tackle the impact of the prevailing market volatility on your investments, hedge funds can be an effective option. Market moves of a veteran like Chuck Akre can be taken into consideration to make investment decisions.
To analyze the moves of such experts, our Expert Center brings together the opinions and transaction activities of the world’s top finance experts, which can play an important role in the success of your investment decisions.
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