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)

<ul>
<li>A record 80.7% of China managers have exposure to the Semiconductor sector at an average weight of 3.68%, or +2.58% overweight the MSCI China benchmark.</li>
<li>Over the last 6-months, Semiconductor allocations have remained largely unchanged, whilst rebalancing occurs among other key industry groups.</li>
<li>With record overweights and stalling ownership growth, active China managers should consider whether overweight is the right stance, at this juncture.</li>
</ul>


A record 80.7% of China managers have exposure to the Semiconductor sector at an average weight of 3.68%, or +2.58% overweight the MSCI China benchmark.
Over the last 6-months, Semiconductor allocations have remained largely unchanged, whilst rebalancing occurs among other key industry groups.
With record overweights and stalling ownership growth, active China managers should consider whether overweight is the right stance, at this juncture.


MSCI China Funds: Semiconductor Growth Stalls

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyze the weekly Hong Kong Connect flows with our data engine.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We note that weekly inflows into Hua Hong Semiconductor was at 52 week high. </li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We note that weekly inflows into Hua Hong Semiconductor was at 52 week high. 


Hong Kong Connect Flows: Hua Hong Semicon Inflow at 52 Week High

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

The Hang Seng Indexes Company Limited (HSIL) announced the results of its review of the Hang Seng Family of Indexes post market close on 20 August. The constituent changes will be effective after the close of trading on 3 September.For the <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">Hang Seng Tech Index (HSTECH INDEX)</a> there is one set of changes with Trip.com (9961 HK) / <a href="https://www.smartkarma.com/entities/trip-com-group-ltd" target="_blank" data-smartkarma-citation="entities:180:1" rel="noopener">Trip.com (TCOM US)</a> replacing <a href="https://www.smartkarma.com/entities/koolearn-technology-holding" target="_blank" data-smartkarma-citation="entities:27796:1" rel="noopener">Koolearn (1797 HK)</a>.One-way turnover is estimated at 6.29% and will result in a one-way trade of HK$2.12bn.There will be over 2 days of ADV to trade on Trip.com while the impact of passive fund selling on <a href="https://www.smartkarma.com/entities/koolearn-technology-holding" target="_blank" data-smartkarma-citation="entities:27796:1" rel="noopener">Koolearn (1797 HK)</a> will be a lot smaller.Hang Seng has also announced that a market review and feedback will result in 'Autonomous' being added to the list of eligible technology themes for index inclusion. This means that <a href="https://www.smartkarma.com/entities/xpeng-inc-4cc65854-d10c-4d20-bf7e-ca0e016715ff" target="_blank" data-smartkarma-citation="entities:33772:1" rel="noopener">XPeng (9868 HK)</a> and <a href="https://www.smartkarma.com/entities/li-auto-inc-3dbe6187-544f-40dd-b9f9-72fba9c0110e" target="_blank" data-smartkarma-citation="entities:33811:1" rel="noopener">Li Auto (2015 HK)</a> will be eligible for inclusion in the index at the December rebalance.

The Hang Seng Indexes Company Limited (HSIL) announced the results of its review of the Hang Seng Family of Indexes post market close on 20 August. The constituent changes will be effective after the close of trading on 3 September.For the Hang Seng Tech Index (HSTECH INDEX) there is one set of changes with Trip.com (9961 HK) / Trip.com (TCOM US) replacing Koolearn (1797 HK).One-way turnover is estimated at 6.29% and will result in a one-way trade of HK$2.12bn.There will be over 2 days of ADV to trade on Trip.com while the impact of passive fund selling on Koolearn (1797 HK) will be a lot smaller.Hang Seng has also announced that a market review and feedback will result in 'Autonomous' being added to the list of eligible technology themes for index inclusion. This means that XPeng (9868 HK) and Li Auto (2015 HK) will be eligible for inclusion in the index at the December rebalance.

HSTECH Index Rebalance: One Change; More at the Next Review

China managers continue to increase their Semiconductor exposures.  Average fund weights stand at a record 3.20% with a new high of 73.3% of funds invested in the sector.  This places active China managers overweight the MSCI China benchmark by +2.29%.
<a href="https://www.smartkarma.com/entities/longi-green-energy-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:12703:1" rel="noopener">LONGi Green Energy Technology (601012 CH)</a> is the most widely held stock, with 25% of the funds in our analysis holding a position.  <a href="https://www.smartkarma.com/entities/will-semiconductor-ltd" target="_blank" data-smartkarma-citation="entities:28274:1" rel="noopener">Will Semiconductor Ltd (603501 CH)</a> and <a href="https://www.smartkarma.com/entities/hua-hong-semiconductor-ltd" target="_blank" data-smartkarma-citation="entities:7201:1" rel="noopener">Hua Hong Semiconductor (1347 HK)</a> have been the key drivers of recent increases, with a further 7.8% and 6.0% of funds adding to exposure respectively
Analysis taken from our China research, which covers 116 active China managers with combined AUM of $68bn

China managers continue to increase their Semiconductor exposures.  Average fund weights stand at a record 3.20% with a new high of 73.3% of funds invested in the sector.  This places active China managers overweight the MSCI China benchmark by +2.29%.
LONGi Green Energy Technology (601012 CH) is the most widely held stock, with 25% of the funds in our analysis holding a position.  Will Semiconductor Ltd (603501 CH) and Hua Hong Semiconductor (1347 HK) have been the key drivers of recent increases, with a further 7.8% and 6.0% of funds adding to exposure respectively
Analysis taken from our China research, which covers 116 active China managers with combined AUM of $68bn

China Semiconductors:  Rising up the Ranks

Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

The bloodbath in Hong Kong and H-shares in the first week of July 2021 was mainly caused by the perceived worsening corporate governance to invest in Chinese companies as the Chinese regulator has gone more draconian on the new listing of the Chinese companies, especially for tech companies.  This will inevitably put downward pressure on the share prices of the tech companies but it will increase trading volume in the HK exchange, on the short term basis at least. In the long term, <a href="https://www.smartkarma.com/entities/hong-kong-exchanges-clearing" target="_blank" data-smartkarma-citation="entities:490:1" rel="noopener">HKEX (388 HK)</a> may be the only Exchange approved by the Chinese government for Chinese companies to raise money from foreign investors. Maintain Buy.

The bloodbath in Hong Kong and H-shares in the first week of July 2021 was mainly caused by the perceived worsening corporate governance to invest in Chinese companies as the Chinese regulator has gone more draconian on the new listing of the Chinese companies, especially for tech companies.  This will inevitably put downward pressure on the share prices of the tech companies but it will increase trading volume in the HK exchange, on the short term basis at least. In the long term, HKEX (388 HK) may be the only Exchange approved by the Chinese government for Chinese companies to raise money from foreign investors. Maintain Buy. 

HK Exchange (388): Beneficiary of HK Tech Crack Down

China

Hua Hong Semiconductor Limited manufactures semiconductors on 200mm wafers for specialty applications. The Company's products are used in the consumer electronic, communication, computing and industrial, and automotive industries.

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Hua Hong Semiconductor (1347 HK)

MSCI China Funds: Semiconductor Growth Stalls

With near record overweights and stalling ownership growth, active China managers should consider whether overweight Semiconductors is the right...

Steven Holden

Hong Kong Connect Flows: Hua Hong Semicon Inflow at 52 Week High

We highlight inflows into Kuaishou Technology (1024 HK), Hua Hong Semiconductor (1347 HK), Meituan (3690 HK), as well as outflows from Tencent (700...

Ke Yan, CFA, FRM

HSTECH Index Rebalance: One Change; More at the Next Review

Trip.com replaces Koolearn in the HSTECH Index. Alibaba's weight will drop by over 3%. Benchmarked assets have risen a lot. One-way turnover is...

Brian Freitas

China Semiconductors: Rising up the Ranks

China managers continue to increase their Semiconductor exposures. Average fund weights stand at a record 3.20% with a new high of 73.3% of funds...

Steven Holden

HK Exchange (388): Beneficiary of HK Tech Crack Down

HKEX (388 HK) may be the only Exchange approved by the Chinese government for Chinese companies to raise money from foreign investors. Maintain Buy

Henry Soediarko

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