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

Quantitative Analysis

<ul>
<li>The latest in stock ownership data among active GEM Equity investors.</li>
<li>Latest aggregate positioning, most widely held stocks, over/underweights, unloved and avoided companies</li>
<li>Largest fund level stock positions(weight and USD), aggregate stock ownership changes, fund level stock ownership Changes</li>
</ul>


The latest in stock ownership data among active GEM Equity investors.
Latest aggregate positioning, most widely held stocks, over/underweights, unloved and avoided companies
Largest fund level stock positions(weight and USD), aggregate stock ownership changes, fund level stock ownership Changes


Emerging Markets Stock Positioning Chart Pack

Cross Asset Strategy

<ul>
<li>Average returns among GEM active managers came in at -7.02% for April, lower than the MSCI EM Index by -1.46% with 21.2% of funds outperforming.</li>
<li>This year’s underperformance of -3.69% ranks as the worst start to the year for over a decade, worse than the first 4 months of both 2009 (-2.70%) and 2015 (-2.71%).</li>
<li>Russian Financials (overweight) and Saudi Arabian Financials (underweight) accounted for nearly 1% of the performance deficit, with Singapore Comm’ Services, Taiwan Technology and Indian Utilities further dragging on relative returns.</li>
</ul>


Average returns among GEM active managers came in at -7.02% for April, lower than the MSCI EM Index by -1.46% with 21.2% of funds outperforming.
This year’s underperformance of -3.69% ranks as the worst start to the year for over a decade, worse than the first 4 months of both 2009 (-2.70%) and 2015 (-2.71%).
Russian Financials (overweight) and Saudi Arabian Financials (underweight) accounted for nearly 1% of the performance deficit, with Singapore Comm’ Services, Taiwan Technology and Indian Utilities further dragging on relative returns.


GEM Fund Performance.  April Compounds Woes for Active Managers

<ul>
<li>Saudi Arabia overtakes China is the largest country underweight among EM active investors.</li>
<li>Despite exposure among active managers reaching all-time highs and new funds entering the market, index weights are outpacing active increases.</li>
<li>Nearly 3/4 of the 246 funds in our analysis are still without Saudi Arabia exposure. In our view, the rising ownership trend has a long way to run.</li>
</ul>


Saudi Arabia overtakes China is the largest country underweight among EM active investors.
Despite exposure among active managers reaching all-time highs and new funds entering the market, index weights are outpacing active increases.
Nearly 3/4 of the 246 funds in our analysis are still without Saudi Arabia exposure. In our view, the rising ownership trend has a long way to run.


Saudi Arabia:  Takes Underweight Crown from China

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<ul>
<li>Commodities (ex. precious metals) and global yields are on the rise as the US dollar (DXY) deteriorates. Additionally, EM equities (EEM-US) display a bullish RS reversal relative to MSCI ACWI. </li>
<li>These are all important risk-on signals for global equities that continue to support our neutral yet constructive outlook. We expect more consolidation and mixed markets ahead.</li>
<li>Two Sectors that stand to benefit most from rising rates include Energy and Financials. We recommend adding exposure to these Sectors as we see a shift in favor of value.</li>
</ul>


Commodities (ex. precious metals) and global yields are on the rise as the US dollar (DXY) deteriorates. Additionally, EM equities (EEM-US) display a bullish RS reversal relative to MSCI ACWI. 
These are all important risk-on signals for global equities that continue to support our neutral yet constructive outlook. We expect more consolidation and mixed markets ahead.
Two Sectors that stand to benefit most from rising rates include Energy and Financials. We recommend adding exposure to these Sectors as we see a shift in favor of value.


Value Sectors Take The Lead On Rising Global Yields; Buying Energy and Financials

<ul>
<li>MENA stocks hit record underweight among active Emerging Market managers</li>
<li>Only half of active managers have exposure to the region, less than 3% overweight.</li>
<li>Al Rajhi Bank is the investor favourite, though all stocks remain underinvested vs benchmark</li>
</ul>


MENA stocks hit record underweight among active Emerging Market managers
Only half of active managers have exposure to the region, less than 3% overweight.
Al Rajhi Bank is the investor favourite, though all stocks remain underinvested vs benchmark


Saudi Arabia

National Commercial Bank (NCB) provides commercial banking services. The Bank offers current, savings, time, and other deposit accounts, auto leases, home financing, corporate loans, currency exchange, money transfer, asset management, share brokerage, initial public offering subscription services, and private banking services. NCB operates in Saudi Arabia, with branches worldwide.

Riyad Bank attracts deposits and offers commercial and retail banking services. The Bank offers automobile and other consumer, business, and syndicated loans, private banking services, risk analysis, trade finance, asset management, and treasury services, sponsors Visa credit cards, and manages mutual funds.

Saudi Awwal Bank operates as a bank. The Bank offers debit and credit cards, wealth management, investment, treasury, financing and saving products, trade finance, equity and debt wholesale banking, and corporate and private banking services. Saudi Awwal Bank serves customers worldwide.

Alinma Bank is a Shariah law-compliant, commercial Islamic bank.

Banque Saudi Fransi attracts deposits and offers retail and corporate banking services. The Bank offers automobile, home renovation, trade finance, structured finance, and syndicated loans. Banque Saudi also advises on mergers, acquisitions and private placements, treasury services, and securities brokerage services.

Arab National Bank attracts deposits and offers commercial and retail banking services. The Bank offers retail, corporate, commercial, investment, private banking services, and treasury services.

Bank Albilad is a full-service bank. The Bank offers a wide range of banking products and services including business banking, retail banking, and investment products.

The Saudi Investment Bank attracts deposits and offers retail and commercial banking services. The Bank offers consumer, corporate, industrial, and trade finance loans, lease financing, and asset management, foreign exchange, and securities brokerage services, and sponsors the American Express Card.

Bank Al-Jazira attracts deposits and offers commercial banking services.  The Bank offers lease financing, export financing, foreign exchange services, treasury services, business and personal loans, asset management services, manages mutual funds, sponsors American Express and Visa credit cards, and offers securities brokerage services.

Kingdom Holding Company is a diversified investment company based in Saudi Arabia. The Company's interests include banking, real estate, telecommunications, broadcasting and media, entertainment, hospitality, computers and electronics, agriculture, restaurants, upscale fashion, retailing, supermarkets, tourism, travel, and automotive manufacturing.

National Australia Bank Limited is an international banking group which operates in Australia, New Zealand, Europe, Asia and the United States.  The Group offers banking services, credit and access card facilities, leasing, housing and general finance, international and investment banking, wealth and funds management, life insurance and custodian, trustee and nominee services.

DBS Group Holdings Limited and its subsidiaries provide a variety of financial services.  The Company offers services including mortgage financing, lease and hire purchase financing, nominee and trustee, funds management, corporate advisory and brokerage .  DBS Group also acts as the primary dealer in Singapore government securities.

United Overseas Bank Limited provides a wide range of financial services including personal financial services, wealth management, private banking, commercial and corporate banking, transaction banking, investment banking, corporate finance, capital market activities, treasury services, futures broking, asset management, venture capital management and insurance.

Oversea-Chinese Banking Corporation Limited offers a comprehensive range of financial services.  The Company's services include deposit-taking, corporate, enterprise and personal lending, international trade financing, investment banking, private banking, treasury, stockbroking, insurance, credit cards, cash management, asset management and other financial and related services.

Kotak Mahindra Bank Limited is a full service commercial bank. The Bank offers a wide range of products and services such as personal, commercial, and corporate banking services, including deposit accounts, loans, and investments. Kotak Mahindra Bank serves customers in India.

State Bank of India provides a wide range of banking and financial services to corporate, institutional, commercial, agricultural, industrial and individual customers throughout India.  The Bank also provides international banking to its Indian customers and has operations in other countries.

Sumitomo Mitsui Financial Group, Inc. manages financial operations for its subsidiaries. The Company provides commercial banking and a variety of financial services.

Sumitomo Mitsui Financial Group (8316 JP)

Mitsubishi UFJ Financial Group, Inc. (MUFG) is a holding company established through the merger of Mitsubishi Tokyo Financial Group and UFJ Holdings. As a financial group, the Company provides a variety of financial and investment services including commercial banking, trust banking, international finance, and assets management services.

Mitsubishi UFJ Financial (MUFG) (8306 JP)

Mizuho Financial Group, Inc. provides comprehensive financial services through its subsidiaries. The Group provides variety of financial services such as general banking, securities brokerage, trust banking, and assets management.

PNC Financial Services Group, Inc. is a diversified financial services organization.  The Company provides regional banking, wholesale banking, and asset management services nationally and in the Company's primary regional markets.

Al Rajhi Bank provides banking services. The Bank offers services such as credit cards, insurance, car finance, loans, online and phone banking, and current accounts. Al Rajhi Bank serves customers in Saudi Arabia.

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Al Rajhi Bank (RJHI AB)

Emerging Markets Stock Positioning Chart Pack

The latest in stock ownership data among active Global Emerging Markets Equity funds. Most Widely Held, Over/Underweights, Unloved and Avoided...

Steven Holden

GEM Fund Performance. April Compounds Woes for Active Managers

It has been one of the worst starts to the year for active EM managers in over a decade. We analyze recent performance, attribution and how this...

Steven Holden

Saudi Arabia: Takes Underweight Crown from China

Saudi Arabia overtakes China is the largest country underweight among EM active investors. Despite exposure among managers reaching all-time...

Steven Holden

Value Sectors Take The Lead On Rising Global Yields; Buying Energy and Financials

Two Sectors that stand to benefit most from rising rates include Energy and Financials. We recommend adding exposure to these Sectors as we see a...

Vermilion Research

Record MENA Underweight

MENA stocks hit record underweight among active Emerging Market managers. Only half of active EM managers are exposed to the region and less than...

Steven Holden

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