Prosper Stars & Stripes, a long/short equity fund, recently released its second quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund underperformed and generated a net return of +9.6% compared to a total return of +8.5% for the long-only small-cap Russell 2000 Index (the “Russell”), and a total return of +5.0% for the long/short equity hedge fund peer group represented by the HFRX Equity Hedge Index (the “HFRX”). For the six months ended 2025, Prosper Stars & Stripes returned a net return of (0.8%) compared to (1.8%) for the Russell and +5.9% for the HFRI. The portfolio demonstrated strong outperformance relative to its net exposure during the quarter. In the second quarter of 2025, US equities reversed the declines seen in the first quarter. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its second-quarter 2025 investor letter, Prosper Stars & Stripes highlighted stocks such as FTAI Aviation Ltd. (NASDAQ:FTAI). FTAI Aviation Ltd. (NASDAQ:FTAI) owns and acquires aviation equipment for the transportation of goods and people. The one-month return of FTAI Aviation Ltd. (NASDAQ:FTAI) was 12.04%, and its shares gained 20.37% of their value over the last 52 weeks. On August 29, 2025, FTAI Aviation Ltd. (NASDAQ:FTAI) stock closed at $153.85 per share, with a market capitalization of $15.781 billion.
Prosper Stars & Stripes stated the following regarding FTAI Aviation Ltd. (NASDAQ:FTAI) in its second quarter 2025 investor letter:
“While the macro backdrop informs our portfolio positioning, our primary focus is on identifying unique businesses we believe can deliver improving profits, leading to higher valuations and superior returns on our long positions. We have consistently invested in the aerospace sector, given its steady growth, attractive margins for value-added suppliers, regulatory barriers to entry, and emphasis on quality and reliability. The fund often finds opportunities that share similar structural dynamics, even if they involve different companies. Our 2023 investment in FTAI Aviation Ltd. (NASDAQ:FTAI) is a representative case. The company was undergoing corporate change while addressing the growing demand for maintenance, repair, and overhaul (“MRO”) services in commercial aerospace. The investment performed very well, and we exited the position after the stock appreciated into the upper end of our valuation range and the investment case had largely matured.”
FTAI Aviation Ltd. (NASDAQ:FTAI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 48 hedge fund portfolios held FTAI Aviation Ltd. (NASDAQ:FTAI) at the end of the second quarter, which was 49 in the previous quarter. While we acknowledge the potential of FTAI Aviation Ltd. (NASDAQ:FTAI) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
