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

Thematic (Sector/Industry)

Among active Global managers, Japan Consumer Discretionary stocks are the 3rd largest country/sector holding in the Asia region.  Average fund weights sit behind Taiwan Tech and Japan Industrials at 1.07%, with 57.1% of the 380 funds in our analysis invested in the sector with combined AUM of $9.18bn.Measured against other Asian country/sectors, changes in fund ownership have been positive and among the highest across all measures over the last 6-months.  Against a backdrop of plummeting exposure in China Consumer Discretionary stocks, average weights, funds invested, cash flows and the balance of buyers vs sellers were all positive for Japan Consumer Discretionary stocks.  Infact, across most ownership metrics, Japan Consumer Discretionary stocks have overtaken, or at least closed to gap to China Consumer Discretionary stocks since the 'Tech Crackdown' in October of 2020.  We can see evidence of this rotation on a fund level, with Aberdeen's Global Unconstrained Fund, LBPAM's Actions Monde and BNY Mellon's Global Opportunities Fund examples of managers rotating from China Consumer Discretionary and into Japan since October 2020.Analysis taken from our Global research, covering 380 active Global strategies with combined AUM of $1.1bn

Among active Global managers, Japan Consumer Discretionary stocks are the 3rd largest country/sector holding in the Asia region.  Average fund weights sit behind Taiwan Tech and Japan Industrials at 1.07%, with 57.1% of the 380 funds in our analysis invested in the sector with combined AUM of $9.18bn.Measured against other Asian country/sectors, changes in fund ownership have been positive and among the highest across all measures over the last 6-months.  Against a backdrop of plummeting exposure in China Consumer Discretionary stocks, average weights, funds invested, cash flows and the balance of buyers vs sellers were all positive for Japan Consumer Discretionary stocks.  Infact, across most ownership metrics, Japan Consumer Discretionary stocks have overtaken, or at least closed to gap to China Consumer Discretionary stocks since the 'Tech Crackdown' in October of 2020.  We can see evidence of this rotation on a fund level, with Aberdeen's Global Unconstrained Fund, LBPAM's Actions Monde and BNY Mellon's Global Opportunities Fund examples of managers rotating from China Consumer Discretionary and into Japan since October 2020.Analysis taken from our Global research, covering 380 active Global strategies with combined AUM of $1.1bn

Japan Consumer Discretionary:  Benefiting from China's Downfall

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

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

Maruti reported 1Q results yesterday missing consensus as the company narrowly avoided generating an operating loss. OP was just INR0.78bn and in addition to material cost inflation we pointed to, labour cost was also surprisingly high, illustrating Maruti’s negative sensitivity to inflationary pressures.

Maruti reported 1Q results yesterday missing consensus as the company narrowly avoided generating an operating loss. OP was just INR0.78bn and in addition to material cost inflation we pointed to, labour cost was also surprisingly high, illustrating Maruti’s negative sensitivity to inflationary pressures.

Suzuki – Maruti Weakness Makes Our Predicted Miss Likely

While we expect results to be broadly strong for Japanese automakers thanks to favourable forex trends and strong unit volumes in North America, Suzuki unfortunately does not benefit greatly from these. Rather, it is highly negatively impacted by commodity prices, and we believe consensus does not adequately reflect this.

While we expect results to be broadly strong for Japanese automakers thanks to favourable forex trends and strong unit volumes in North America, Suzuki unfortunately does not benefit greatly from these. Rather, it is highly negatively impacted by commodity prices, and we believe consensus does not adequately reflect this.

Suzuki – Could Be the Only J-Auto to Miss at 1Q

Suzuki reported its 4QFY21 results on Thursday which saw revenues increase YoY by 16% and operating profits of ¥56bn (+25% YoY) implying an OPM of 5.6%.The reported results were 6.8%% and 0.6% higher than consensus revenue and OP respectively, but a lack of guidance combined with deteriorating conditions in India and rising cost inflation are likely to keep the stock in check despite some nice signs in its peripheral businesses.<table class="table table-striped"><tbody>
<tr>
<td style="width: 44.28%;">In ¥bn</td>
<td style="width: 15.48%;">Revenue </td>
<td style="width: 22.88%;">OP</td>
<td style="width: 17.36%;">OPM</td>
</tr>
<tr>
<td style="width: 44.28%;">Actual Results - 4QFY21</td>
<td style="width: 15.48%;">1,003</td>
<td style="width: 22.88%;">56</td>
<td style="width: 17.36%;">5.6%</td>
</tr>
<tr>
<td style="width: 44.28%;">Consensus - 4QFY21</td>
<td style="width: 15.48%;">939</td>
<td style="width: 22.88%;">55</td>
<td style="width: 17.36%;">5.9%</td>
</tr>
<tr>
<td style="width: 44.28%;">Surprise</td>
<td style="width: 15.48%;">6.8%</td>
<td style="width: 22.88%;">0.6%</td>
<td style="width: 17.36%;">-0.3%</td>
</tr>
<tr>
<td style="width: 44.28%;"> </td>
<td style="width: 15.48%;"> </td>
<td style="width: 22.88%;"> </td>
<td style="width: 17.36%;"> </td>
</tr>
<tr>
<td style="width: 44.28%;">Actual Results - FY21</td>
<td style="width: 15.48%;">3,178</td>
<td style="width: 22.88%;">194</td>
<td style="width: 17.36%;">6.1%</td>
</tr>
<tr>
<td style="width: 44.28%;">Guidance - FY21</td>
<td style="width: 15.48%;">3,000</td>
<td style="width: 22.88%;">160</td>
<td style="width: 17.36%;">5.3%</td>
</tr>
<tr>
<td style="width: 44.28%;">Surprise</td>
<td style="width: 15.48%;">5.9%</td>
<td style="width: 22.88%;">21.5%</td>
<td style="width: 17.36%;">0.8%</td>
</tr>
</tbody></table><div style="text-align: left;" class="content-caption">Source: Company disclosures, CapIQ</div>

Suzuki reported its 4QFY21 results on Thursday which saw revenues increase YoY by 16% and operating profits of ¥56bn (+25% YoY) implying an OPM of 5.6%.The reported results were 6.8%% and 0.6% higher than consensus revenue and OP respectively, but a lack of guidance combined with deteriorating conditions in India and rising cost inflation are likely to keep the stock in check despite some nice signs in its peripheral businesses.

In ¥bn
Revenue 
OP
OPM


Actual Results - 4QFY21
1,003
56
5.6%


Consensus - 4QFY21
939
55
5.9%


Surprise
6.8%
0.6%
-0.3%


 
 
 
 


Actual Results - FY21
3,178
194
6.1%


Guidance - FY21
3,000
160
5.3%


Surprise
5.9%
21.5%
0.8%

Source: Company disclosures, CapIQ

Equity L/S Analyst | Forensic Accounting | India, Yellowstone Equity

Ankit Agrawal, CFA

Equity L/S Analyst | Forensic Accounting | India

Quantitative Analysis

Since our Original on <a href="https://www.smartkarma.com/insights/asia-buyback-forecasting-which-companies-are-likely-to-raise-cut-buybacks" target="_blank" data-smartkarma-citation="insights:47196" rel="noopener">Asia Buyback Forecasting | Which Companies Are Likely to Raise/Cut Buybacks?</a>, published on Jan 31 2021, this is our first quarterly update. Below we provide updated results from our models based on latest reported fiscal year-end financials. We also discuss companies where there is notable change in our conviction level based on updated data.
At the webinar in March, there was also a request for conducting price movement analysis corresponding to our buyback raise/cut outlook for our back-test results. This analysis is now available. Our results show a decent outperformance/underperformance corresponding to buyback raise/cut prediction, suggesting that users of our models will benefit from guiding their investment decisions based on our buyback raise/cut outlook.

Since our Original on Asia Buyback Forecasting | Which Companies Are Likely to Raise/Cut Buybacks?, published on Jan 31 2021, this is our first quarterly update. Below we provide updated results from our models based on latest reported fiscal year-end financials. We also discuss companies where there is notable change in our conviction level based on updated data.
At the webinar in March, there was also a request for conducting price movement analysis corresponding to our buyback raise/cut outlook for our back-test results. This analysis is now available. Our results show a decent outperformance/underperformance corresponding to buyback raise/cut prediction, suggesting that users of our models will benefit from guiding their investment decisions based on our buyback raise/cut outlook.

Asia Buyback Forecasting | Quarterly Update 1.0

Japan

Suzuki Motor Corporation manufactures automobiles, motorcycles, and their related parts. The Company has production facilities in USA, Japan, Taiwan, India, Pakistan, Indonesia, Thailand, and Hungary.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Suzuki Motor (7269 JP)

Japan Consumer Discretionary: Benefiting from China's Downfall

Against a backdrop of plummeting exposure in China Consumer Discretionary stocks, active Global managers have pivoted towards the Japan Consumer...

Steven Holden

Suzuki – Maruti Weakness Makes Our Predicted Miss Likely

Maruti results showed that in addition to the material cost inflation we pointed to, labour cost was also surprisingly high, illustrating the...

Mio Kato

Suzuki – Could Be the Only J-Auto to Miss at 1Q

Commodity inflation and seasonality could result in a 1Q earnings miss for Suzuki which consensus does not appear to have caught onto.

Mio Kato

Suzuki – Waiting on India

Suzuki results came in marginally above consensus, but less so on margins as cost inflation pressured profits in India. Despite some nice signs in...

Mio Kato

Asia Buyback Forecasting | Quarterly Update 1.0

This is our first quarterly update since our Original on Buyback Forecasting. We provide updated results based on latest year-end financials.

Ankit Agrawal, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)