The AIM Class of 2022 generated nearly 900 bps of alpha in the International Equity Fund during 2021
It was an exceptional year for the student-managers of the AIM International Equity Fund. The Class of 2022 generated a 16.71% total return for the twelve months ending on 12/31/21. This beat the MSCI All World Country Index ex-US (benchmark) return of 8.27% for 2021.
The returns of the International Equity Fund began to beat the benchmark in June and continued the trend throughout the remainder of the year. The performance surged in October with strong returns from the Financial and Technology sector holdings.
Only two sectors detracted substantially from the overall performance - Utilities and Energy. The International Fund had no holdings in the Energy sector during the year and lost nearly 80 bps in overall performance as a result. The students made the decision to avoid any energy holdings - especially those related to fossil fuels.
Unlike the Small Cap Fund, only one stock generated a return in excess of 100% (Endava) during 2021. Nevertheless, there were many strong performing stocks in the technology and financial services sectors. The students were able to avoid any major underperforming holdings during the year.
Overall the AIM International Fund held high quality stocks with stronger, on average, expected earnings growth than the benchmark while maintaining a sector neutral positioning (with the exception of Energy). While the average price multiples were higher than the benchmark average and the European holdings did better than other regions.