Meet the Artificial Intelligence (AI) Stock That Makes Up 22% of Billionaire Bill Ackman's $11 Billion Portfolio

When it comes to investing, hedge funds generally have a bad reputation -- and for good reason. A report released by The American Enterprise Institute a few years ago helps illustrate why. An analysis of hedge fund returns between 2011 and 2020 found that the S 500 beat the average hedge fund's return every single year, and usually by a wide margin. In fact, during that 10-year stretch, hedge funds returned roughly 5%, on average, compared to 14.4% gains for the S 500.

However, not all hedge fund managers are cut from the same cloth. Billionaire Bill Ackman has developed a reputation for being a different breed of hedge fund manager. He doesn't trade in and out of stocks every quarter in an attempt to buttress his performance. He generally buys high-quality North American companies with limited downside that generate predictable, recurring cash flows. At any given time, he has between eight and 12 stocks, and holds them for the long term.

Ackman helms Pershing Square Capital Management -- the hedge fund he founded -- which had $10.8 billion in assets under management to close out the first quarter. His investing strategy has been extremely successful: Pershing Square has returned 31% annualized over the past five years, nearly twice the returns of the S 500 and vastly outperforming the industry.

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Source Fool.com