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

<ul>
<li>Global Active Funds make tentative moves back in to Japanese equities after a 5-year decline.</li>
<li>Buying seen in Daiichi Sankyo, Keyence Corp and Sumitomo Mitsui Financial Group, with Japan capturing $1.3bn of new fund investment since September 2022.</li>
<li>Ownership levels still near record lows, with clear potential for further ownership growth from here.</li>
</ul>


Global Active Funds make tentative moves back in to Japanese equities after a 5-year decline.
Buying seen in Daiichi Sankyo, Keyence Corp and Sumitomo Mitsui Financial Group, with Japan capturing $1.3bn of new fund investment since September 2022.
Ownership levels still near record lows, with clear potential for further ownership growth from here.


Japan: Early Signs of a Potential Re-Weight

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

S&P BSE SENSEX Index / Technical Analysis

<ul>
<li>Our 2023 outlook remains unchanged as we continue to expect broad-based consolidation with $93 capping upside on MSCI ACWI (ACWI-US), while important downside targets are $86, $84, and $75-77.</li>
<li>We still recommend tactical overweight to defensives including gold miners and MSCI ACWI Staples, Health Care, and Utilities, given ACWI-US remains near the top of our expected 2023 trading range.</li>
<li>We are now starting to see broad-based improvement, particularly in Japan and India, but also in Taiwan and South Korea. Most of today's buy recommendations are cyclicals in these countries.</li>
</ul>


Our 2023 outlook remains unchanged as we continue to expect broad-based consolidation with $93 capping upside on MSCI ACWI (ACWI-US), while important downside targets are $86, $84, and $75-77.
We still recommend tactical overweight to defensives including gold miners and MSCI ACWI Staples, Health Care, and Utilities, given ACWI-US remains near the top of our expected 2023 trading range.
We are now starting to see broad-based improvement, particularly in Japan and India, but also in Taiwan and South Korea. Most of today's buy recommendations are cyclicals in these countries.


Broad-Based Improvement in India, Add Exposure/Overweight. Buys: Cyclicals in Japan, India, & Taiwan

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

TSE Tokyo Price Index TOPIX / Event-Driven

<ul>
<li>Every year it's the same trade. But it isn't really. But it kinda is. This year it is Wednesday and Thursday. There are risks to the analysis - notably allocation.</li>
<li>But, ceteris paribus, it is still possibly a ¥1,580,876,450,407 buying spree to take place on one day into the close later this month. Or something close to it.</li>
<li>And for a two-day period, over the last ten years, the average return is 1.60% on these two days with a 9:1 win ratio. Lots of angles here.</li>
</ul>


Every year it's the same trade. But it isn't really. But it kinda is. This year it is Wednesday and Thursday. There are risks to the analysis - notably allocation.
But, ceteris paribus, it is still possibly a ¥1,580,876,450,407 buying spree to take place on one day into the close later this month. Or something close to it.
And for a two-day period, over the last ten years, the average return is 1.60% on these two days with a 9:1 win ratio. Lots of angles here.


The BIG March 2023 "Wednesday Thursday Trade"

Japan Specialist

Mark Chadwick

Thematic (Sector/Industry)

<ul>
<li>OVERSEAS.  US stocks rally on Fed paus(ing); Duration gets extended spurring +5% SOX move; AMD results provide comfort for Semis; Meta Beats !  Off to the races!</li>
<li>JAPAN.  NKY Futs +0.2% vs Cash; Yen Stronger at USDJPY 129.02 post Fed;  BOJ shows commitment buying  $180 bn JGBs in Jan;   Earnings: Positive Keyence; Negative Kyocera; Disaster Sumi Chemicals. </li>
<li>DAILY NUGGETS. Race for Talent. Japan retail major lifts wages, as (wage) hike momentum gathers. Issue for Japan is lack of workers !</li>
</ul>


OVERSEAS.  US stocks rally on Fed paus(ing); Duration gets extended spurring +5% SOX move; AMD results provide comfort for Semis; Meta Beats !  Off to the races!
JAPAN.  NKY Futs +0.2% vs Cash; Yen Stronger at USDJPY 129.02 post Fed;  BOJ shows commitment buying  $180 bn JGBs in Jan;   Earnings: Positive Keyence; Negative Kyocera; Disaster Sumi Chemicals. 
DAILY NUGGETS. Race for Talent. Japan retail major lifts wages, as (wage) hike momentum gathers. Issue for Japan is lack of workers !


Good Morning Japan | Blast off ! "Disinflation Process Has Started";AMD Spurs Tech Rally; Meta Beats

Equity Bottom-Up

<ul>
<li>Keyence is a structural growth stock that has fallen by 31% over the past year reflecting near term risks to growth</li>
<li>Although Keyence is a major beneficiary of continued investment in industrial automation, the company would need to grow significantly quicker than the industry to justify the current valuation</li>
<li>We analyse Keyence’s core value drivers – revenue, margins, risk and reinvestment – but see better risk/reward in other growth stocks</li>
</ul>


Keyence is a structural growth stock that has fallen by 31% over the past year reflecting near term risks to growth
Although Keyence is a major beneficiary of continued investment in industrial automation, the company would need to grow significantly quicker than the industry to justify the current valuation
We analyse Keyence’s core value drivers – revenue, margins, risk and reinvestment – but see better risk/reward in other growth stocks


Keyence (6861) | Better Risk/Reward at Peers

Japan

KEYENCE CORPORATION develops, manufactures, and sells sensors and measuring instruments used for factory automation (FA) and high technology hobby products. The Company's products include fiber optic sensors, photoelectric sensors, programmable logic controllers (PLC), laser scan micrometers, bar code readers, and radio-controlled model cars.

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Keyence Corp (6861 JP)

Japan: Early Signs of a Potential Re-Weight

Global Equity Funds make tentative moves back in to Japan after a 5-year decline. Ownership levels remain near record lows, so potential for...

Steven Holden

Broad-Based Improvement in India, Add Exposure/Overweight. Buys: Cyclicals in Japan, India, & Taiwan

Seeing broad-based improvement in India #SENSEX -- overweight/add exposure. We still recommend a tactical overweight to ACWI defensives with $ACWI...

Vermilion Research

The BIG March 2023 "Wednesday Thursday Trade"

This year, there is a US$12bn buy to do on 29 March at the close. Historically, performance is pretty good both on a 2-day period, then slumps....

Travis Lundy

Good Morning Japan | Blast off ! "Disinflation Process Has Started";AMD Spurs Tech Rally; Meta Beats

NKY Futs +0.2% vs Cash;USDJPY 129.02 post-Fed. Watch our homegrown SPE names today to follow the lead of the SOX. Today, Sony is on tap. Watching...

Mark Chadwick

Keyence (6861) | Better Risk/Reward at Peers

Keyence is a key beneficiary of continued investment in industrial automation. However, we believe that the company would have to significantly...

Mark Chadwick

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