雅虎香港財經 Banking Crisis Impacted American International Group (AIG) in Q1
Oakmark Funds, advised by Harris Associates, released its “Oakmark Global Select Fund” first quarter 2023 investor letter. A copy of the same can be downloaded here. The fund generated a 9.1% return in the first quarter compared to a 7.7% return for the MSCI World Index. The fund returned an average of 7.1% since its inception in October 2006 outperforming a 6.4% annualized gain for MSCI World Index (net). In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
Oakmark Global Select Fund highlighted stocks like American International Group, Inc. (NYSE:AIG) in the first quarter 2023 investor letter. Headquartered in New York, New York, American International Group, Inc. (NYSE:AIG) is an insurance company. On April 11, 2023, American International Group, Inc. (NYSE:AIG) stock closed at $51.20 per share. One-month return of American International Group, Inc. (NYSE:AIG) was 6.76%, and its shares lost 18.70% of their value over the last 52 weeks. American International Group, Inc. (NYSE:AIG) has a market capitalization of $37.564 billion.
Oakmark Global Select Fund made the following comment about American International Group, Inc. (NYSE:AIG) in its Q1 2023 investor letter:
"American International Group, Inc. (NYSE:AIG), a U.S.-based multinational finance and insurance corporation, was a top detractor for the period. AIG’s share price declined during the quarter as a result of broader concerns stemming from the banking crisis. We have found that during times of financial stress, AIG tends to trade like a life insurer, even though we attribute only around 20% of its value to Corebridge. We do not agree with the market’s perceived assumption that life insurers’ risk profiles have increased meaningfully and will suffer asset impairments as they did during the global financial crisis. In our view, this panic is quite different from the global financial crisis. Most of today’s problems are the result of an asset and liability mismatch rather than a credit crisis. We believe that AIG’s core general insurance business drives most of the company’s value, and, in our view, underwriting has seen tremendous improvement since CEO Peter Zaffino joined the company. Since 2016, underwriting profits have improved by $7 billion, and $2 billion of that improvement occurred in 2022. The combined ratio in 2022 was in the low 90% range, and Zaffino believes that this can be below 90% in a few years. The company has accomplished this while lowering insurance limits by roughly half, which dramatically narrows the range of underwriting outcomes. In addition, AIG has been going through a major cost savings plan for the last several years in preparation for the separation. Part of this plan is to simplify and collapse the reporting structure for the general insurance operations, and we believe the lower general operating costs will have a positive effect on the combined ratio. Ultimately, we believe the company remains an attractive investment given its discount to our perception of its intrinsic value."
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American International Group, Inc. (NYSE:AIG) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 46 hedge fund portfolios held American International Group, Inc. (NYSE:AIG) at the end of the fourth quarter which was 48 in the previous quarter.
We discussed American International Group, Inc. (NYSE:AIG) in another article and shared Meridian Contrarian Fund’s views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q1 2023 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
