The Russell Midcap ETF and the S&P Midcap ETF rose 0.65% and 0.40% respectively for the quarter, while the L2 Midcap Select Strategy lost -1.26% net. Over the full year, the L2 Midcap Select Strategy rose 26.51% vs. the Russell Midcap ETF rising 15.22% and the S&P Midcap benchmark rising 13.93%. We are satisfied with the results.
The strategy’s underperformance this quarter can be almost entirely explained by two primary acts of omission (things we didn’t own). First, was the boom in cryptocurrency which sent shares of Robinhood, Coinbase, Square, and Microstrategy soaring as much as 71%.1 Those four stocks contributed 0.42% of the benchmark’s 0.65% return. Then there was Palantir – the biggest stock in the benchmark – which doubled, adding a whopping 0.64% gross to the benchmark returns.
We know that Palantir does some very interesting things and counts Peter Thiel as a key founder. The market seems to have decided that Mr. Thiel’s proximity to JD Vance means the sky is the limit for Palantir’s stock price. L2 asks you to remove your political lens for a moment and consider what the data tells us.
L2 Midcap Select Strategy – Q4 2024
Table of contents
When
January 1, 2025
Who
Matthew Malgari
Dr. Sanjeev Bhojraj
Nathan Przybylo
Summary
The Russell Midcap ETF and the S&P Midcap ETF rose 0.65% and 0.40% respectively for the quarter, while the L2 Midcap Select Strategy lost -1.26% net. Over the full year, the L2 Midcap Select Strategy rose 26.51% vs. the Russell Midcap ETF rising 15.22% and the S&P Midcap benchmark rising 13.93%. We are satisfied with the results.
The strategy’s underperformance this quarter can be almost entirely explained by two primary acts of omission (things we didn’t own). First, was the boom in cryptocurrency which sent shares of Robinhood, Coinbase, Square, and Microstrategy soaring as much as 71%.1 Those four stocks contributed 0.42% of the benchmark’s 0.65% return. Then there was Palantir – the biggest stock in the benchmark – which doubled, adding a whopping 0.64% gross to the benchmark returns.
We know that Palantir does some very interesting things and counts Peter Thiel as a key founder. The market seems to have decided that Mr. Thiel’s proximity to JD Vance means the sky is the limit for Palantir’s stock price. L2 asks you to remove your political lens for a moment and consider what the data tells us.