Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Cross Asset Strategy

<p>With the Nikkei 225 index breaking 30k this month, we thought it pertinent to look in more detail at Japan positioning among Global fund managers.  Our data shows that Japan is underowned by Global managers versus its own history and held underweight versus the benchmark MSCI All Country World index.  Current positioning levels are towards their lowest ever levels, yet we are not seeing a sweeping reversal of sentiment in our data just yet, merely a stalling of the declines. </p><p>However, the outperformance of MSCI Japan versus the AC World index over the last 6-months and the psychological breaking of 30,000 in the Nikkei 225 index are both signs that momentum is gathering steam.   We see rising ownership levels in a number of key companies, led by <a href="https://www.smartkarma.com/entities/sony-corp" target="_blank" data-smartkarma-citation="entities:563:1" rel="noopener">Sony Corp (6758 JP)</a> , <a href="https://www.smartkarma.com/entities/nintendo-co-ltd" target="_blank" data-smartkarma-citation="entities:5415:1" rel="noopener">Nintendo Co Ltd (7974 JP)</a> and <a href="https://www.smartkarma.com/entities/tokyo-electron-ltd" target="_blank" data-smartkarma-citation="entities:280:1" rel="noopener">Tokyo Electron (8035 JP)</a> and high conviction in <a href="https://www.smartkarma.com/entities/keyence-corp" target="_blank" data-smartkarma-citation="entities:3077:1" rel="noopener">Keyence Corp (6861 JP)</a> among Global investors.  Outside of these 4 stocks, we would highlight the largest index weight, <a href="https://www.smartkarma.com/entities/toyota-motor-corp" target="_blank" data-smartkarma-citation="entities:73:1" rel="noopener">Toyota Motor (7203 JP)</a> as a laggard and a stock that has the potential to play a much greater role in Global portfolios going forwards.</p><p><em>Analysis taken from our Global active fund research, covering 386 managers with combined AUM of $960bn </em></p>

With the Nikkei 225 index breaking 30k this month, we thought it pertinent to look in more detail at Japan positioning among Global fund managers.  Our data shows that Japan is underowned by Global managers versus its own history and held underweight versus the benchmark MSCI All Country World index.  Current positioning levels are towards their lowest ever levels, yet we are not seeing a sweeping reversal of sentiment in our data just yet, merely a stalling of the declines. However, the outperformance of MSCI Japan versus the AC World index over the last 6-months and the psychological breaking of 30,000 in the Nikkei 225 index are both signs that momentum is gathering steam.   We see rising ownership levels in a number of key companies, led by Sony Corp (6758 JP) , Nintendo Co Ltd (7974 JP) and Tokyo Electron (8035 JP) and high conviction in Keyence Corp (6861 JP) among Global investors.  Outside of these 4 stocks, we would highlight the largest index weight, Toyota Motor (7203 JP) as a laggard and a stock that has the potential to play a much greater role in Global portfolios going forwards.Analysis taken from our Global active fund research, covering 386 managers with combined AUM of $960bn 

Global Fund Positioning in Japan:  Underweight and Underowned

Senior Technology Analyst, Japanese Equities, LightStream Research

Scott Foster

Senior Technology Analyst, Japanese Equities

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

<p>New orders significantly exceeded management's expectations in the three months to December and were also greater than we had expected. The large increase in capital spending recently announced by TSMC and the current shortage of semiconductors should help maintain a strong order flow.</p><p>Consolidated sales were down 5.3% year-on-year in 3Q, but efficiency gains led to an increase in operating profit of nearly 60%. Management raised FY Mar-21 operating profit guidance by 17% while raising sales guidance by only 2%</p><p>Looking out to FY Mar-23, we now expect profits to approach their previous cyclical peaks. This suggests 44% potential upside to ¥12,000.</p>

New orders significantly exceeded management's expectations in the three months to December and were also greater than we had expected. The large increase in capital spending recently announced by TSMC and the current shortage of semiconductors should help maintain a strong order flow.Consolidated sales were down 5.3% year-on-year in 3Q, but efficiency gains led to an increase in operating profit of nearly 60%. Management raised FY Mar-21 operating profit guidance by 17% while raising sales guidance by only 2%Looking out to FY Mar-23, we now expect profits to approach their previous cyclical peaks. This suggests 44% potential upside to ¥12,000.

Screen Holdings (7735 JP): New Orders and Efficiency Gains Greater than Expected

'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

Thematic (Sector/Industry)

<p style="text-align: center;"><strong>• BEST &amp; WORST • </strong></p><p>Our best and worst mega-cap pair from Thursday's 135 results and 64 forecasts/revisions announcements is <a href="https://www.smartkarma.com/entities/japan-exchange-group-inc" target="_blank" data-smartkarma-citation="entities:11266:1" rel="noopener">Japan Exchange (8697 JP)</a> and <a href="https://www.smartkarma.com/entities/tokyo-electron-ltd" target="_blank" data-smartkarma-citation="entities:280:1" rel="noopener">Tokyo Electron (8035 JP)</a>. Amongst large caps, our picks are <a href="https://www.smartkarma.com/entities/paltac-corporation" target="_blank" data-smartkarma-citation="entities:20014:1" rel="noopener">Paltac (8283 JP)</a> and <a href="https://www.smartkarma.com/entities/fancl-corp" target="_blank" data-smartkarma-citation="entities:15862:1" rel="noopener">Fancl (4921 JP)</a>. 69% of companies had improved Results Scores, and 68% of annual revisions scored positively.  Only 10% of companies posted quarterly losses.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/185/303/original/2021-01-29_05-38-04.png?1611866299" class="editor-image img-responsive" data-smartkarma-image-id="185303"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/185/304/original/2021-01-29_05-38-53.png?1611866346" class="editor-image img-responsive" data-smartkarma-image-id="185304"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/185/305/original/2021-01-29_05-39-46.png?1611866397" class="editor-image img-responsive" data-smartkarma-image-id="185305"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/185/306/original/2021-01-29_05-42-15.png?1611866547" class="editor-image img-responsive" data-smartkarma-image-id="185306"></figure></section><div class="content-caption">   Source for all charts &amp; tables: Japan Analytics</div>

• BEST &amp; WORST • Our best and worst mega-cap pair from Thursday's 135 results and 64 forecasts/revisions announcements is Japan Exchange (8697 JP) and Tokyo Electron (8035 JP). Amongst large caps, our picks are Paltac (8283 JP) and Fancl (4921 JP). 69% of companies had improved Results Scores, and 68% of annual revisions scored positively.  Only 10% of companies posted quarterly losses.   Source for all charts &amp; tables: Japan Analytics

🇯🇵 JAPAN • Results & Revisions ​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​01/​​​​​​​​​​​​28 JPX, TEL, Fancl...

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Last Week in Event SPACE: OFAC's Longer List, TOPIX Free Float, PCCW, Jardines, Toa, Guoco, Sansan

<div>
<p><em>This week in StubWorld ...</em></p>
</div>
<div>
<ul>
<li>
<a href="https://www.smartkarma.com/entities/tokyo-electron-ltd" target="_blank" data-smartkarma-citation="entities:280:1" rel="noopener">Tokyo Electron (8035 JP)</a> outperforms as global carmakers face a chip shortage;</li>
<li>
<a href="https://www.smartkarma.com/entities/gulf-energy-development-public-company-limited" target="_blank" data-smartkarma-citation="entities:26038:1" rel="noopener">Gulf Energy Development Public Company (GULF TB)</a> increases its questionable stake in <a href="https://www.smartkarma.com/entities/intouch-holdings-pcl" target="_blank" data-smartkarma-citation="entities:17638:1" rel="noopener">Intouch Holdings (INTUCH TB)</a>; and</li>
<li>
<a href="https://www.smartkarma.com/entities/jardine-matheson-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19718:1" rel="noopener">Jardine Matheson Holdings (JM SP)</a>'s ramps up its buybacks.</li>
</ul>
</div>
<hr>
<div>
<p>Preceding my comments on these holdcos are the weekly setup/unwind tables for Asia-Pacific Holdcos.</p>
</div>
<div>
<p>These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.</p>
</div>


This week in StubWorld ...




Tokyo Electron (8035 JP) outperforms as global carmakers face a chip shortage;

Gulf Energy Development Public Company (GULF TB) increases its questionable stake in Intouch Holdings (INTUCH TB); and

Jardine Matheson Holdings (JM SP)'s ramps up its buybacks.




Preceding my comments on these holdcos are the weekly setup/unwind tables for Asia-Pacific Holdcos.


These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.


StubWorld: TBS/Tokyo Electron, Intouch/Gulf, Jardines' Buybacks

Japan

Tokyo Electron Limited manufactures and sells industrial electronics products, such as semiconductor manufacturing machines, computer system, and electronic components.  The Company products are sold in US, Taiwan, and others as well as in Japan.

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Tokyo Electron Ltd Unsp Adr (TOELY US)

Global Fund Positioning in Japan: Underweight and Underowned

With the Nikkei 225 index breaking 30k this month, Global managers remain under-invested and underweight Japan versus the benchmark MSCI All...

Steven Holden

Screen Holdings (7735 JP): New Orders and Efficiency Gains Greater than Expected

New orders and profits both exceeded expectations in 3Q. FY Mar-21 guidance has been raised. Looking out to FY Mar-23, profits should approach...

Scott Foster

🇯🇵 JAPAN • Results & Revisions 01/28 JPX, TEL, Fancl...

69% of companies had improved Results Scores, and 68% of annual revisions scored positively. Only 10% of companies posted quarterly losses.

Campbell Gunn

Last Week in Event SPACE: OFAC's Longer List, TOPIX Free Float, PCCW, Jardines, Toa, Guoco, Sansan

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

StubWorld: TBS/Tokyo Electron, Intouch/Gulf, Jardines' Buybacks

Tokyo Electron (8035 JP) outperforms as global carmakers face a chip shortage; Gulf Energy increases its questionable stake in Intouch; and Jardine...

David Blennerhassett

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Global Fund Positioning in Japan: Underweight and Underowned

With the Nikkei 225 index breaking 30k this month, Global managers remain under-invested and underweight Japan versus the benchmark MSCI All...

Steven Holden

Screen Holdings (7735 JP): New Orders and Efficiency Gains Greater than Expected

New orders and profits both exceeded expectations in 3Q. FY Mar-21 guidance has been raised. Looking out to FY Mar-23, profits should approach...

Scott Foster

🇯🇵 JAPAN • Results & Revisions ​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​01/​​​​​​​​​​​​28 JPX, TEL, Fancl...

69% of companies had improved Results Scores, and 68% of annual revisions scored positively. Only 10% of companies posted quarterly losses.

Campbell Gunn

Last Week in Event SPACE: OFAC's Longer List, TOPIX Free Float, PCCW, Jardines, Toa, Guoco, Sansan

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

StubWorld: TBS/Tokyo Electron, Intouch/Gulf, Jardines' Buybacks

Tokyo Electron (8035 JP) outperforms as global carmakers face a chip shortage; Gulf Energy increases its questionable stake in Intouch; and Jardine...

David Blennerhassett

🇯🇵 JAPAN • Results & Revisions 01/28 JPX, TEL, Fancl...