Research on Tech Companies

Evelyn Zhang

Thematic (Sector/Industry)

<ul>
<li>Prices for Neon have been rising rapidly recently, in the short term, global semiconductor companies have 6 months inventory of the noble gas.</li>
<li>China, as a major steel producer, has mature purification technology and production process for these noble gases,  around 30% of noble gases for wafers above 8-inch  are Chinese suppliers. </li>
<li>It takes 3 to 6 months to find replacement due to the complex process of chip lithography; this crisis will accelerate the domestic substitution  of Chinese semiconductor material manufacturers.</li>
</ul>


Prices for Neon have been rising rapidly recently, in the short term, global semiconductor companies have 6 months inventory of the noble gas.
China, as a major steel producer, has mature purification technology and production process for these noble gases,  around 30% of noble gases for wafers above 8-inch  are Chinese suppliers. 
It takes 3 to 6 months to find replacement due to the complex process of chip lithography; this crisis will accelerate the domestic substitution  of Chinese semiconductor material manufacturers.


How Semiconductor Supply Chain in China Stands to Benefit from Ukraine Crisis

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>The changes to the <a href="https://www.smartkarma.com/entities/s-p-500-index" target="_blank" data-smartkarma-citation="entities:22886:1" rel="noopener">S&amp;P 500 INDEX (SPX INDEX)</a>, S&amp;P400 Index and S&amp;P600 Index will be announced after market close on Friday.</li>
<li>The conclusions of the market consultation to change the index weighting methodology for the Select Sector Indices to reduce concentration and avoid reverse turnover should also be announced.</li>
<li>Changes in the index weighting methodology will result in a round-trip trade of US$35bn across the Select Sector indices. The largest turnover is in the <a href="https://www.smartkarma.com/entities/consumer-staples-select-sector-spdr-fund" target="_blank" data-smartkarma-citation="entities:27536:1" rel="noopener">XLP</a> and <a href="https://www.smartkarma.com/entities/technology-select-sector-spdr" target="_blank" data-smartkarma-citation="entities:27543:1" rel="noopener">XLK</a>.</li>
</ul>


The changes to the S&amp;P 500 INDEX (SPX INDEX), S&amp;P400 Index and S&amp;P600 Index will be announced after market close on Friday.
The conclusions of the market consultation to change the index weighting methodology for the Select Sector Indices to reduce concentration and avoid reverse turnover should also be announced.
Changes in the index weighting methodology will result in a round-trip trade of US$35bn across the Select Sector indices. The largest turnover is in the XLP and XLK.


Select Sector Indices - Updated Flows as Round-Trip Trade Hits US$35bn

<ul>
<li>Constituent changes to the <a href="https://www.smartkarma.com/entities/s-p-500-index" target="_blank" data-smartkarma-citation="entities:22886:1" rel="noopener">S&amp;P 500 INDEX</a> and weight changes as a result of the market consultation proposals being adopted will result in a round-trip trade of US$31.5bn.</li>
<li>The largest one-way turnover is expected in the <a href="https://www.smartkarma.com/entities/consumer-staples-select-sector-spdr-fund" target="_blank" data-smartkarma-citation="entities:27536:1" rel="noopener">Consumer Staples Select Sector SPDR Fund</a>, <a href="https://www.smartkarma.com/entities/technology-select-sector-spdr" target="_blank" data-smartkarma-citation="entities:27543:1" rel="noopener">Technology Select Sector SPDR</a>, <a href="https://www.smartkarma.com/entities/materials-select-sector-spdr" target="_blank" data-smartkarma-citation="entities:27541:1" rel="noopener">Materials Select Sector SPDR</a> and <a href="https://www.smartkarma.com/entities/communication-services-select-sector-spdr-fund" target="_blank" data-smartkarma-citation="entities:27534:1" rel="noopener">Communication Services Select Sector SPDR Fund</a>.</li>
<li>The inflows to <a href="https://www.smartkarma.com/entities/apple-inc" target="_blank" data-smartkarma-citation="entities:666:1" rel="noopener">Apple (AAPL US)</a>, <a href="https://www.smartkarma.com/entities/palantir-technologies-inc" target="_blank" data-smartkarma-citation="entities:27728:1" rel="noopener">Palantir Technologies (PLTR US)</a> and <a href="https://www.smartkarma.com/entities/dell-technologies-inc" target="_blank" data-smartkarma-citation="entities:32189:1" rel="noopener">Dell Technologies (DELL US)</a> will add to the buying from the <a href="https://www.smartkarma.com/entities/s-p-500-index" target="_blank" data-smartkarma-citation="entities:22886:1" rel="noopener">S&amp;P 500 INDEX (SPX INDEX)</a> trackers.</li>
</ul>


Constituent changes to the S&amp;P 500 INDEX and weight changes as a result of the market consultation proposals being adopted will result in a round-trip trade of US$31.5bn.
The largest one-way turnover is expected in the Consumer Staples Select Sector SPDR Fund, Technology Select Sector SPDR, Materials Select Sector SPDR and Communication Services Select Sector SPDR Fund.
The inflows to Apple (AAPL US), Palantir Technologies (PLTR US) and Dell Technologies (DELL US) will add to the buying from the S&amp;P 500 INDEX (SPX INDEX) trackers.


Select Sector Indices: Inflows to Apple, Palantir, Dell Will Add to SPX Buying

<ul>
<li>S&amp;P DJI have started a market consultation to change the index weighting methodology for the Select Sector Indices to reduce concentration and avoid reverse turnover.</li>
<li>There is US$281bn tracking the Select Sector Indices from the SPDR ETFs. The market consultation will have a larger impact on indices where there is a high degree of concentration.</li>
<li>The largest inflows are expected in <a href="https://www.smartkarma.com/entities/apple-inc" target="_blank" data-smartkarma-citation="entities:666:1" rel="noopener">Apple</a>, <a href="https://www.smartkarma.com/entities/conocophillips" target="_blank" data-smartkarma-citation="entities:18090:1" rel="noopener">Conocophillips</a>, <a href="https://www.smartkarma.com/entities/amazon-com-inc" target="_blank" data-smartkarma-citation="entities:409:1" rel="noopener">Amazon.com</a> and <a href="https://www.smartkarma.com/entities/netflix-inc" target="_blank" data-smartkarma-citation="entities:20451:1" rel="noopener">Netflix</a> while the largest outflows will be from <a href="https://www.smartkarma.com/entities/microsoft-corp" target="_blank" data-smartkarma-citation="entities:15273:1" rel="noopener">Microsoft</a>, <a href="https://www.smartkarma.com/entities/nvidia-corp" target="_blank" data-smartkarma-citation="entities:5891:1" rel="noopener">NVIDIA</a>, <a href="https://www.smartkarma.com/entities/chevron-corp" target="_blank" data-smartkarma-citation="entities:11091:1" rel="noopener">Chevron</a>, <a href="https://www.smartkarma.com/entities/procter-gamble-co" target="_blank" data-smartkarma-citation="entities:978:1" rel="noopener">Procter &amp; Gamble</a>, <a href="https://www.smartkarma.com/entities/exxon-mobil-corp" target="_blank" data-smartkarma-citation="entities:811:1" rel="noopener">Exxon Mobil</a>, <a href="https://www.smartkarma.com/entities/costco-wholesale-corp" target="_blank" data-smartkarma-citation="entities:18404:1" rel="noopener">Costco Wholesale</a> and <a href="https://www.smartkarma.com/entities/meta-platforms-inc-class-a-facebook" target="_blank" data-smartkarma-citation="entities:665:1" rel="noopener">Meta Platforms</a>.</li>
</ul>


S&amp;P DJI have started a market consultation to change the index weighting methodology for the Select Sector Indices to reduce concentration and avoid reverse turnover.
There is US$281bn tracking the Select Sector Indices from the SPDR ETFs. The market consultation will have a larger impact on indices where there is a high degree of concentration.
The largest inflows are expected in Apple, Conocophillips, Amazon.com and Netflix while the largest outflows will be from Microsoft, NVIDIA, Chevron, Procter &amp; Gamble, Exxon Mobil, Costco Wholesale and Meta Platforms.


Select Sector Indices - HUGE Impact of Proposed Constituent Weighting Changes

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 equity funds are heavily overweight in UK stock heading in to the election on July 4th.</li>
<li>Compared to the SPDRs MSCI ACWI ETF benchmark, UK allocations are at a record overweight of +2.64%, with 69% of investors positioned ahead of the benchmark.</li>
<li>All sectors in the UK are held net overweight, led by Industrials and Consumer Staples. Key stocks like AstraZeneca, Linde, and Unilever are among the most widely held.</li>
</ul>


Global equity funds are heavily overweight in UK stock heading in to the election on July 4th.
Compared to the SPDRs MSCI ACWI ETF benchmark, UK allocations are at a record overweight of +2.64%, with 69% of investors positioned ahead of the benchmark.
All sectors in the UK are held net overweight, led by Industrials and Consumer Staples. Key stocks like AstraZeneca, Linde, and Unilever are among the most widely held.


United Kingdom:  Record Overweights in Run Up to Election

United States

Linde PLC operates as an industrial gas and engineering company. The company offers industrial gases, technologies, and gas processing solutions that are used in production of clean hydrogen and carbon capture systems for energy transition, medical oxygen, and specialty gases for electronics. Linde serves customers worldwide.

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Linde (LIN US)

How Semiconductor Supply Chain in China Stands to Benefit from Ukraine Crisis

As the Ukraine standoff intensifies, a little-known industry is set for an upset, leaving western buyers in a lurch and Chinese producers...

Evelyn Zhang

Select Sector Indices - Updated Flows as Round-Trip Trade Hits US$35bn

US$300bn tracks the Select Sector Indices. Implementation of proposed changes will set off a US$35bn trade. Apple could be bought by multiple...

Brian Freitas

Select Sector Indices: Inflows to Apple, Palantir, Dell Will Add to SPX Buying

Constituent changes to the SPX and the market consultation proposals being adopted result in a round-trip trade of US$31.5bn. Apple and...

Brian Freitas

Select Sector Indices - HUGE Impact of Proposed Constituent Weighting Changes

The market consultation to change the index weighting methodology will set off a US$28bn trade in Sep. Inflows to Apple, Conocophillips, Amazon.com...

Brian Freitas

United Kingdom: Record Overweights in Run Up to Election

Global equity fund managers are heading into the UK election with a significant overweight position compared to the SPDRs MSCI ACWI ETF benchmark.

Steven Holden

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