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)

Energy is a lightly held sector, a bit part player in a world dominated by Tech, Financials and the EM Consumer.  The average holding weight among the active EM funds in our analysis stands at just 3.81%, underweight the benchmark by -2.11% on average.The fact that nearly a quarter of active EM managers have no exposure to the Energy sector is perhaps the most telling statistic of just how under-owned the sector is.  Part of that reason, we believe, lies in the risk of not holding Energy when index weights are so low. With Oil prices at multi-year highs, the Energy sector has started to outperform in a big way, with EM Energy outperforming the broader MSCI EM index by over 30% over the last 12 months.  With just 22.7% of funds overweight the benchmark, active EM managers are feeling the pinch.  The risk of being underweight or avoiding the sector completely has moved significantly higher.One of the factors that has driven Energy to the margins of EM investment is the rise of secular growth opportunities in Technology, Consumer Discretionary and Communication Services.  Indeed, the current investor base in Energy is heavily skewed towards the Value and Yield end of the spectrum.  Instead, Aggressive Growth managers have rotated towards the secular growth opportunities within Packaged Software, Internet Retail, Biotechnology and Internet Software/Services.Can the lure of a cyclical growth opportunity such as Energy be enough to win back investment from Growth investors?  If Energy keeps outperforming it will undoubtedly push Growth investors to look for opportunities within the sector.  We identify 2 stocks that already have an investor base among both Aggressive Growth and Growth funds, whilst also appealing to Value investors.  As such, we would expect both to be on the shortlist of the many underweights and non-investors looking to ramp up allocations in the Energy sector as we shift to a new ownership regime.Analysis taken from our EM research, covering 247 active GEM funds with combined AUM of $500bn

Energy is a lightly held sector, a bit part player in a world dominated by Tech, Financials and the EM Consumer.  The average holding weight among the active EM funds in our analysis stands at just 3.81%, underweight the benchmark by -2.11% on average.The fact that nearly a quarter of active EM managers have no exposure to the Energy sector is perhaps the most telling statistic of just how under-owned the sector is.  Part of that reason, we believe, lies in the risk of not holding Energy when index weights are so low. With Oil prices at multi-year highs, the Energy sector has started to outperform in a big way, with EM Energy outperforming the broader MSCI EM index by over 30% over the last 12 months.  With just 22.7% of funds overweight the benchmark, active EM managers are feeling the pinch.  The risk of being underweight or avoiding the sector completely has moved significantly higher.One of the factors that has driven Energy to the margins of EM investment is the rise of secular growth opportunities in Technology, Consumer Discretionary and Communication Services.  Indeed, the current investor base in Energy is heavily skewed towards the Value and Yield end of the spectrum.  Instead, Aggressive Growth managers have rotated towards the secular growth opportunities within Packaged Software, Internet Retail, Biotechnology and Internet Software/Services.Can the lure of a cyclical growth opportunity such as Energy be enough to win back investment from Growth investors?  If Energy keeps outperforming it will undoubtedly push Growth investors to look for opportunities within the sector.  We identify 2 stocks that already have an investor base among both Aggressive Growth and Growth funds, whilst also appealing to Value investors.  As such, we would expect both to be on the shortlist of the many underweights and non-investors looking to ramp up allocations in the Energy sector as we shift to a new ownership regime.Analysis taken from our EM research, covering 247 active GEM funds with combined AUM of $500bn

Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Independent, Fundamental Quantitative Research

Propitious Research

Fully independent, fundamental and quantitative equity research, focused on companies in the Telecommunication, Media, Technology, Internet and Healthcare sectors in the Global Emerging Markets. Idea generation focused on Quality stocks, trading below their intrinsic Value, with sound Corporate Governance.

Quantitative Analysis

This insight provides the output, and an overview of our, machine learning-driven, proprietary GEM screening model, which takes a three-pronged approach to find the best medium-term long ideas within the top100 largest stocks in the MSCI GEM Index. The model is based on 1) a typical quantitative multifactor screening model, enhanced by two Artificial Intelligence Technology-based approaches using 2) a Deep Neural Network model, and 3) a Recurrent Neural Network model. This model, which has been developed and tweaked over the past 3 years (and implemented in its current state for 17 months), has a solid real-world performance track record, which I set out in the detail below. Notable new entrants to the top decile this month include the beaten-down Chinese tech names such as <a href="https://www.smartkarma.com/entities/xiaomi-corp" target="_blank" data-smartkarma-citation="entities:24409:1" rel="noopener">Xiaomi Corp (1810 HK)</a>, <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a>, <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> , and <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com Inc. (9618 HK)</a> as well as two Brazilian large caps in <a href="https://www.smartkarma.com/entities/vale-sa-7721577f-6c6a-4536-a829-92551c2bcd7f" target="_blank" data-smartkarma-citation="entities:27725:1" rel="noopener">Vale SA (VALE3 BZ)</a> and <a href="https://www.smartkarma.com/entities/ambev-sa" target="_blank" data-smartkarma-citation="entities:24454:1" rel="noopener">Ambev SA (ABEV3 BZ)</a>.<table class="table table-striped">
<colgroup>
<col>
<col>
<col>
<col>
<col>
</colgroup>
<tbody>
<tr>
<td style="text-align: center; width: 48pt;">rank</td>
<td style="width: 169pt;">Name</td>
<td style="width: 119pt;">Sector</td>
<td style="width: 95pt;">Location</td>
<td style="text-align: center; width: 48pt;">prev.</td>
</tr>
<tr>
<td style="text-align: center;">1</td>
<td>
<a href="https://www.smartkarma.com/entities/new-oriental-education-technology-group" target="_blank" data-smartkarma-citation="entities:32210:1" rel="noopener">New Oriental Education &amp; Technology Group (9901 HK)</a> </td>
<td>Consumer Discretionary</td>
<td>China</td>
<td style="text-align: center;">10</td>
</tr>
<tr>
<td style="text-align: center;">2</td>
<td>
<a href="https://www.smartkarma.com/entities/netease" target="_blank" data-smartkarma-citation="entities:29030:1" rel="noopener">NetEase (9999 HK)</a> </td>
<td>Communication</td>
<td>China</td>
<td style="text-align: center;">5</td>
</tr>
<tr>
<td style="text-align: center;">3</td>
<td>
<a href="https://www.smartkarma.com/entities/samsung-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:191:1" rel="noopener">Samsung Electronics (005930 KS)</a> </td>
<td>Information Technology</td>
<td>Korea (South)</td>
<td style="text-align: center;">16</td>
</tr>
<tr>
<td style="text-align: center;">4</td>
<td>
<a href="https://www.smartkarma.com/entities/xiaomi-corp" target="_blank" data-smartkarma-citation="entities:24409:1" rel="noopener">Xiaomi Corp (1810 HK)</a> </td>
<td>Information Technology</td>
<td>China</td>
<td style="text-align: center;">91</td>
</tr>
<tr>
<td style="text-align: center;">5</td>
<td>
<a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a> </td>
<td>Consumer Discretionary</td>
<td>China</td>
<td style="text-align: center;">34</td>
</tr>
<tr>
<td style="text-align: center;">6</td>
<td>
<a href="https://www.smartkarma.com/entities/vale-sa-7721577f-6c6a-4536-a829-92551c2bcd7f" target="_blank" data-smartkarma-citation="entities:27725:1" rel="noopener">Vale SA (VALE3 BZ)</a> </td>
<td>Materials</td>
<td>Brazil</td>
<td style="text-align: center;">38</td>
</tr>
<tr>
<td style="text-align: center;">7</td>
<td>
<a href="https://www.smartkarma.com/entities/ambev-sa" target="_blank" data-smartkarma-citation="entities:24454:1" rel="noopener">Ambev SA (ABEV3 BZ)</a> </td>
<td>Consumer Staples</td>
<td>Brazil</td>
<td style="text-align: center;">35</td>
</tr>
<tr>
<td style="text-align: center;">8</td>
<td>
<a href="https://www.smartkarma.com/entities/ambev-sa" target="_blank" data-smartkarma-citation="entities:24454:1" rel="noopener">Ambev SA (ABEV3 BZ)</a> </td>
<td>Communication</td>
<td>China</td>
<td style="text-align: center;">43</td>
</tr>
<tr>
<td style="text-align: center;">9</td>
<td>
<a href="https://www.smartkarma.com/entities/ping-an-insurance-grp-co-of-china-ltd" target="_blank" data-smartkarma-citation="entities:12880:1" rel="noopener">Ping An Insurance (H) (2318 HK)</a> </td>
<td>Financials</td>
<td>China</td>
<td style="text-align: center;">23</td>
</tr>
<tr>
<td style="text-align: center;">10</td>
<td>
<a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com Inc. (9618 HK)</a> </td>
<td>Consumer Discretionary</td>
<td>China</td>
<td style="text-align: center;">79</td>
</tr>
<tr><td colspan="5" style="text-align: left;">Source: FactSet financial data and analytics, my estimates and calculations, Tensorflow, Keras, Google Colaboratory, pandas</td></tr>
</tbody>
</table>As usual, please feel free to reach out for the full output table, any questions, clarifications needed or suggestions.

This insight provides the output, and an overview of our, machine learning-driven, proprietary GEM screening model, which takes a three-pronged approach to find the best medium-term long ideas within the top100 largest stocks in the MSCI GEM Index. The model is based on 1) a typical quantitative multifactor screening model, enhanced by two Artificial Intelligence Technology-based approaches using 2) a Deep Neural Network model, and 3) a Recurrent Neural Network model. This model, which has been developed and tweaked over the past 3 years (and implemented in its current state for 17 months), has a solid real-world performance track record, which I set out in the detail below. Notable new entrants to the top decile this month include the beaten-down Chinese tech names such as Xiaomi Corp (1810 HK), Alibaba Group (9988 HK), Tencent (700 HK) , and JD.com Inc. (9618 HK) as well as two Brazilian large caps in Vale SA (VALE3 BZ) and Ambev SA (ABEV3 BZ).









rank
Name
Sector
Location
prev.


1

New Oriental Education &amp; Technology Group (9901 HK) 
Consumer Discretionary
China
10


2

NetEase (9999 HK) 
Communication
China
5


3

Samsung Electronics (005930 KS) 
Information Technology
Korea (South)
16


4

Xiaomi Corp (1810 HK) 
Information Technology
China
91


5

Alibaba Group (9988 HK) 
Consumer Discretionary
China
34


6

Vale SA (VALE3 BZ) 
Materials
Brazil
38


7

Ambev SA (ABEV3 BZ) 
Consumer Staples
Brazil
35


8

Ambev SA (ABEV3 BZ) 
Communication
China
43


9

Ping An Insurance (H) (2318 HK) 
Financials
China
23


10

JD.com Inc. (9618 HK) 
Consumer Discretionary
China
79

Source: FactSet financial data and analytics, my estimates and calculations, Tensorflow, Keras, Google Colaboratory, pandas

As usual, please feel free to reach out for the full output table, any questions, clarifications needed or suggestions. 

Cross Asset Strategy

The last decade has seen EMEA allocations in active GEM portfolios drift ever lower, with Asia becoming the dominant weight.  However, the recent rhetoric from China has seen Asian allocations fall from their peak and EMEA allocations rally from their lows.  Average weights in EMEA stocks stand at 13.72%, marginally overweight the iShares MSCI Emerging Markets ETF by 0.24%, with just under half of the active managers in our analysis overweight. <ul>
<li>Over the course of the last decade, exposure to each EMEA sector has either fallen dramatically or at best stayed largely unchanged.  Those that have seen a big decline in investment are led by EMEA Industrials and Health Care, with over 40% of investors closing exposure.  </li>
<li>The largest sector exposure, EMEA Financials allocations sit towards the lower-end of their historical range.  Top holdings are <a href="https://www.smartkarma.com/entities/sberbank-of-russia-pjsc" target="_blank" data-smartkarma-citation="entities:24142:1" rel="noopener">Sberbank Of Russia Pjsc (SBER LI)</a> and <a href="https://www.smartkarma.com/entities/otp-bank-nyrt" target="_blank" data-smartkarma-citation="entities:28806:1" rel="noopener">OTP Bank Nyrt (OTP HB)</a> with 59% and 31% of funds invested respectively.  <a href="https://www.smartkarma.com/entities/tcs-group-holding-plc" target="_blank" data-smartkarma-citation="entities:28148:1" rel="noopener">TCS Group Holding PLC (TCS LI)</a> and <a href="https://www.smartkarma.com/entities/capitec-bank-holdings-ltd" target="_blank" data-smartkarma-citation="entities:27628:1" rel="noopener">Capitec Bank Holdings Ltd (CPI SJ)</a> saw ownership levels increase the most over the last 6-months.</li>
<li>Consumer Discretionary weights hit another all-time high this month of 1.46%, representing a 1.04% overweight versus the iShares MSCI EM ETF.  Underpinning the overweight are out-of-benchmark holdings in <a href="https://www.smartkarma.com/entities/prosus-nv" target="_blank" data-smartkarma-citation="entities:28104:1" rel="noopener">Prosus (PRX NA)</a> and Fix Price Group, though in general stocks in the sector are not widely held.  Funds with big overweights are led by Comgest's GEM Promising Companies Fund (8.98%) and Van Eck's Emerging Markets Fund (7.21%).  </li>
<li>With active ownership declining throughout 2020, <a href="https://www.smartkarma.com/entities/gazprom-pjsc" target="_blank" data-smartkarma-citation="entities:23749:1" rel="noopener">Gazprom PJSC (GAZP RX)</a> has finally been the recipient of some inflows.  Over the last 6-months, 2% of funds added Gazprom to their portfolios with a combined $217m in inflows.  Leading those were Fidelity (2.7%), Virtus Allianz (2.67%) and JP Morgan ($64m).</li>
</ul>The analysis looks in detail at all sectors in the EMEA region, together with some of the key stocks that underpin investment in the region.Analysis taken from our GEM fund research, covering 250 active GEM strategies with combined AUM of $500bn

The last decade has seen EMEA allocations in active GEM portfolios drift ever lower, with Asia becoming the dominant weight.  However, the recent rhetoric from China has seen Asian allocations fall from their peak and EMEA allocations rally from their lows.  Average weights in EMEA stocks stand at 13.72%, marginally overweight the iShares MSCI Emerging Markets ETF by 0.24%, with just under half of the active managers in our analysis overweight. 
Over the course of the last decade, exposure to each EMEA sector has either fallen dramatically or at best stayed largely unchanged.  Those that have seen a big decline in investment are led by EMEA Industrials and Health Care, with over 40% of investors closing exposure.  
The largest sector exposure, EMEA Financials allocations sit towards the lower-end of their historical range.  Top holdings are Sberbank Of Russia Pjsc (SBER LI) and OTP Bank Nyrt (OTP HB) with 59% and 31% of funds invested respectively.  TCS Group Holding PLC (TCS LI) and Capitec Bank Holdings Ltd (CPI SJ) saw ownership levels increase the most over the last 6-months.
Consumer Discretionary weights hit another all-time high this month of 1.46%, representing a 1.04% overweight versus the iShares MSCI EM ETF.  Underpinning the overweight are out-of-benchmark holdings in Prosus (PRX NA) and Fix Price Group, though in general stocks in the sector are not widely held.  Funds with big overweights are led by Comgest's GEM Promising Companies Fund (8.98%) and Van Eck's Emerging Markets Fund (7.21%).  
With active ownership declining throughout 2020, Gazprom PJSC (GAZP RX) has finally been the recipient of some inflows.  Over the last 6-months, 2% of funds added Gazprom to their portfolios with a combined $217m in inflows.  Leading those were Fidelity (2.7%), Virtus Allianz (2.67%) and JP Morgan ($64m).
The analysis looks in detail at all sectors in the EMEA region, together with some of the key stocks that underpin investment in the region.Analysis taken from our GEM fund research, covering 250 active GEM strategies with combined AUM of $500bn

EMEA Sectors Deep-Dive.  Active Positioning in the EMEA Region

This insight provides the output, and an overview of our, machine learning-driven, proprietary GEM screening model, which takes a three-pronged approach to find the best medium-term long ideas within the top100 largest stocks in the MSCI GEM Index. The model is based on 1) a typical quantitative multifactor screening model, enhanced by two Artificial Intelligence Technology-based approaches using 2) a Deep Neural Network model, and 3) a Recurrent Neural Network model. This model, which has been developed and tweaked over the past 24 months (and implemented in its current state for &gt;12 months), has a solid real-world performance track record, which I set out in the detail below. Notable new entrants to the top decile this month include a host of energy plays (<a href="https://www.smartkarma.com/entities/gazprom-pjsc" target="_blank" data-smartkarma-citation="entities:23749:1" rel="noopener">Gazprom PJSC (GAZP RX)</a>, <a href="https://www.smartkarma.com/entities/lukoil-pjsc-2bfe0130-461e-4ff3-af12-93bec12e6325" target="_blank" data-smartkarma-citation="entities:27148:1" rel="noopener">LUKOIL (LKOH RM)</a>, <a href="https://www.smartkarma.com/entities/ptt-pcl" target="_blank" data-smartkarma-citation="entities:197:1" rel="noopener">PTT PCL (PTT TB)</a>,  and <a href="https://www.smartkarma.com/entities/cnooc-ltd" target="_blank" data-smartkarma-citation="entities:175:1" rel="noopener">CNOOC Ltd (883 HK)</a>) as well as a return for South African banking group <a href="https://www.smartkarma.com/entities/firstrand-ltd" target="_blank" data-smartkarma-citation="entities:24971:1" rel="noopener">FirstRand Ltd (FSR SJ)</a>, and a recovery call for Chinese online gaming powerhouse <a href="https://www.smartkarma.com/entities/netease" target="_blank" data-smartkarma-citation="entities:29030:1" rel="noopener">NetEase (9999 HK)</a>.<table class="table table-striped">
<colgroup>
<col>
<col>
<col>
<col>
<col>
</colgroup>
<tbody>
<tr>
<td style="text-align: center; width: 48pt;">rank</td>
<td style="width: 169pt;">Name</td>
<td style="width: 119pt;">Sector</td>
<td style="width: 95pt;">Location</td>
<td style="text-align: center; width: 48pt;">prev.</td>
</tr>
<tr>
<td style="text-align: center;">1</td>
<td>
<a href="https://www.smartkarma.com/entities/gazprom-pjsc-6a7231a9-d5e4-4da4-bf21-aa1b9d50fbf8" target="_blank" data-smartkarma-citation="entities:27578:1" rel="noopener">Gazprom PJSC (GAZP RM)</a> </td>
<td>Energy</td>
<td>Russian Federation</td>
<td style="text-align: center;">12</td>
</tr>
<tr>
<td style="text-align: center;">2</td>
<td>
<a href="https://www.smartkarma.com/entities/lukoil-pjsc-2bfe0130-461e-4ff3-af12-93bec12e6325" target="_blank" data-smartkarma-citation="entities:27148:1" rel="noopener">LUKOIL (LKOH RM)</a> </td>
<td>Energy</td>
<td>Russian Federation</td>
<td style="text-align: center;">28</td>
</tr>
<tr>
<td style="text-align: center;">3</td>
<td>
<a href="https://www.smartkarma.com/entities/ptt-pcl" target="_blank" data-smartkarma-citation="entities:197:1" rel="noopener">PTT PCL (PTT TB)</a> </td>
<td>Energy</td>
<td>Thailand</td>
<td style="text-align: center;">30</td>
</tr>
<tr>
<td style="text-align: center;">4</td>
<td>
<a href="https://www.smartkarma.com/entities/china-resources-land-ltd" target="_blank" data-smartkarma-citation="entities:418:1" rel="noopener">China Resources Land (1109 HK)</a> </td>
<td>Real Estate</td>
<td>China</td>
<td style="text-align: center;">5</td>
</tr>
<tr>
<td style="text-align: center;">5</td>
<td>
<a href="https://www.smartkarma.com/entities/netease" target="_blank" data-smartkarma-citation="entities:29030:1" rel="noopener">NetEase (9999 HK)</a> </td>
<td>Communication</td>
<td>China</td>
<td style="text-align: center;">47</td>
</tr>
<tr>
<td style="text-align: center;">6</td>
<td>
<a href="https://www.smartkarma.com/entities/firstrand-ltd" target="_blank" data-smartkarma-citation="entities:24971:1" rel="noopener">FirstRand Ltd (FSR SJ)</a> </td>
<td>Financials</td>
<td>South Africa</td>
<td style="text-align: center;">68</td>
</tr>
<tr>
<td style="text-align: center;">7</td>
<td>
<a href="https://www.smartkarma.com/entities/cnooc-ltd" target="_blank" data-smartkarma-citation="entities:175:1" rel="noopener">CNOOC Ltd (883 HK)</a> </td>
<td>Energy</td>
<td>China</td>
<td style="text-align: center;">25</td>
</tr>
<tr>
<td style="text-align: center;">8</td>
<td>
<a href="https://www.smartkarma.com/entities/bank-of-china-ltd-h" target="_blank" data-smartkarma-citation="entities:656:1" rel="noopener">Bank Of China Ltd (H) (3988 HK)</a> </td>
<td>Financials</td>
<td>China</td>
<td style="text-align: center;">51</td>
</tr>
<tr>
<td style="text-align: center;">9</td>
<td>
<a href="https://www.smartkarma.com/entities/mmc-norilsk-nickel-pjsc-dcb09449-eb24-4747-b1c9-77fbf35e8398" target="_blank" data-smartkarma-citation="entities:33242:1" rel="noopener">MMC Norilsk Nickel PJSC (GMKN RX)</a> </td>
<td>Materials</td>
<td>Russian Federation</td>
<td style="text-align: center;">22</td>
</tr>
<tr>
<td style="text-align: center;">10</td>
<td>
<a href="https://www.smartkarma.com/entities/new-oriental-education-technology-group" target="_blank" data-smartkarma-citation="entities:32210:1" rel="noopener">New Oriental Education &amp; Technology Group (9901 HK)</a> </td>
<td>Consumer Discretionary</td>
<td>China</td>
<td style="text-align: center;">3</td>
</tr>
<tr><td colspan="5" style="text-align: left;">Source: FactSet financial data and analytics, my estimates and calculations, Tensorflow, Keras, Google Colaboratory, pandas</td></tr>
</tbody>
</table>As usual, please feel free to reach out for the full output table, any questions, clarifications needed or suggestions.

This insight provides the output, and an overview of our, machine learning-driven, proprietary GEM screening model, which takes a three-pronged approach to find the best medium-term long ideas within the top100 largest stocks in the MSCI GEM Index. The model is based on 1) a typical quantitative multifactor screening model, enhanced by two Artificial Intelligence Technology-based approaches using 2) a Deep Neural Network model, and 3) a Recurrent Neural Network model. This model, which has been developed and tweaked over the past 24 months (and implemented in its current state for &gt;12 months), has a solid real-world performance track record, which I set out in the detail below. Notable new entrants to the top decile this month include a host of energy plays (Gazprom PJSC (GAZP RX), LUKOIL (LKOH RM), PTT PCL (PTT TB),  and CNOOC Ltd (883 HK)) as well as a return for South African banking group FirstRand Ltd (FSR SJ), and a recovery call for Chinese online gaming powerhouse NetEase (9999 HK).









rank
Name
Sector
Location
prev.


1

Gazprom PJSC (GAZP RM) 
Energy
Russian Federation
12


2

LUKOIL (LKOH RM) 
Energy
Russian Federation
28


3

PTT PCL (PTT TB) 
Energy
Thailand
30


4

China Resources Land (1109 HK) 
Real Estate
China
5


5

NetEase (9999 HK) 
Communication
China
47


6

FirstRand Ltd (FSR SJ) 
Financials
South Africa
68


7

CNOOC Ltd (883 HK) 
Energy
China
25


8

Bank Of China Ltd (H) (3988 HK) 
Financials
China
51


9

MMC Norilsk Nickel PJSC (GMKN RX) 
Materials
Russian Federation
22


10

New Oriental Education &amp; Technology Group (9901 HK) 
Consumer Discretionary
China
3

Source: FactSet financial data and analytics, my estimates and calculations, Tensorflow, Keras, Google Colaboratory, pandas

As usual, please feel free to reach out for the full output table, any questions, clarifications needed or suggestions. 

In this analysis, we provide a detailed overview of investor positioning among 250 active Global Emerging Market funds with combined AUM of $500bn.  Highlights:<ul>
<li>Asia the dominant region but also net underweight.  Managers move to underweight EMEA and strengthen overweight in the Americas.</li>
<li>China the dominant weight but allocations move lower.  Mexico and Russia the key overweights, China, Saudi Arabia and Taiwan the largest underweights.</li>
<li>Allocations in China Consumer Discretionary continue to head lower from their peak in October 2020 of 13.9%.  The underweight of -2.33% is towards the lowest on record and is driven by lighter than benchmark holdings in <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba Group (BABA US)</a>, <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> and <a href="https://www.smartkarma.com/entities/nio-inc" target="_blank" data-smartkarma-citation="entities:27399:1" rel="noopener">NIO Inc (NIO US)</a>.</li>
<li>The rise in Russian Consumer Discretionary ownership driven by Fix Price Group, with 16.1% of funds buying in to the stock after it's IPO back in March.  A quarter of funds now have exposure to the sector, the largest in its history.</li>
<li>Turkish Financials exposure continues to dwindle, with only 16.1% of funds invested.  The most widely held stocks in the sector are <a href="https://www.smartkarma.com/entities/haci-omer-sabanci-holding-as" target="_blank" data-smartkarma-citation="entities:27708:1" rel="noopener">Haci Omer Sabanci Holding AS (SAHOL TI)</a> and <a href="https://www.smartkarma.com/entities/akbank-tas" target="_blank" data-smartkarma-citation="entities:25033:1" rel="noopener">Akbank TAS (AKBNK TI)</a>, but both are held by just 6% of the funds in our analysis.  <a href="https://www.smartkarma.com/entities/turkiye-garanti-bankasi-as" target="_blank" data-smartkarma-citation="entities:25026:1" rel="noopener">Turkiye Garanti Bankasi As (GARAN TI)</a> is now held by 4% of funds after 4% closed positions in the last 6-months. </li>
<li>
<a href="https://www.smartkarma.com/entities/contemporary-amperex-techn-a" target="_blank" data-smartkarma-citation="entities:24404:1" rel="noopener">CATL (A) (300750 CH).</a> Ownership continues to rise among EM managers, with today's investment levels the highest on record across all metrics.  Recent buyers in to the name include JP Morgan, TT International and American Century.</li>
<li><a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a>.  Ownership remains on an upward trajectory with no signs of that slowing down.  Over the last 6-months, a further 6.8% of funds added exposure, including Fidelity EM Opportunity, Aberdeen Emerging Markets and Ashmore EM Active Equity.  GQG Partners was the only closure after cashing in on a position held since early 2020.</li>
<li>
<a href="https://www.smartkarma.com/entities/anhui-conch-cement-co-ltd" target="_blank" data-smartkarma-citation="entities:159:1" rel="noopener">Anhui Conch Cement (914 HK)</a>. Outflows have been severe, with 26.9% of funds invested 6-months ago, now down to just 16.9%.  Among those closing positions were Ashmore Emerging Markets Active, Pictet EM Sustainable and Dunham Emerging Markets.</li>
<li>
<a href="https://www.smartkarma.com/entities/credicorp-ltd" target="_blank" data-smartkarma-citation="entities:25963:1" rel="noopener">Credicorp Ltd (BAP US).  </a>Once among the larger holdings in EM active portfolios, <a href="https://www.smartkarma.com/entities/credicorp-ltd" target="_blank" data-smartkarma-citation="entities:25963:1" rel="noopener">Credicorp Ltd (BAP US)</a> has moved out of favour with EM fund managers.  In a slide that started in late 2019, the percentage of funds with investment in <a href="https://www.smartkarma.com/entities/credicorp-ltd" target="_blank" data-smartkarma-citation="entities:25963:1" rel="noopener">Credicorp Ltd (BAP US)</a> fell a further 6.4% over the last 6-months.  Closures were led by Liontrust, Matthews and HSBC.</li>
</ul>

In this analysis, we provide a detailed overview of investor positioning among 250 active Global Emerging Market funds with combined AUM of $500bn.  Highlights:
Asia the dominant region but also net underweight.  Managers move to underweight EMEA and strengthen overweight in the Americas.
China the dominant weight but allocations move lower.  Mexico and Russia the key overweights, China, Saudi Arabia and Taiwan the largest underweights.
Allocations in China Consumer Discretionary continue to head lower from their peak in October 2020 of 13.9%.  The underweight of -2.33% is towards the lowest on record and is driven by lighter than benchmark holdings in Alibaba Group (BABA US), Meituan (3690 HK) and NIO Inc (NIO US).
The rise in Russian Consumer Discretionary ownership driven by Fix Price Group, with 16.1% of funds buying in to the stock after it's IPO back in March.  A quarter of funds now have exposure to the sector, the largest in its history.
Turkish Financials exposure continues to dwindle, with only 16.1% of funds invested.  The most widely held stocks in the sector are Haci Omer Sabanci Holding AS (SAHOL TI) and Akbank TAS (AKBNK TI), but both are held by just 6% of the funds in our analysis.  Turkiye Garanti Bankasi As (GARAN TI) is now held by 4% of funds after 4% closed positions in the last 6-months. 

CATL (A) (300750 CH). Ownership continues to rise among EM managers, with today's investment levels the highest on record across all metrics.  Recent buyers in to the name include JP Morgan, TT International and American Century.
Sea Ltd (SE US).  Ownership remains on an upward trajectory with no signs of that slowing down.  Over the last 6-months, a further 6.8% of funds added exposure, including Fidelity EM Opportunity, Aberdeen Emerging Markets and Ashmore EM Active Equity.  GQG Partners was the only closure after cashing in on a position held since early 2020.

Anhui Conch Cement (914 HK). Outflows have been severe, with 26.9% of funds invested 6-months ago, now down to just 16.9%.  Among those closing positions were Ashmore Emerging Markets Active, Pictet EM Sustainable and Dunham Emerging Markets.

Credicorp Ltd (BAP US).  Once among the larger holdings in EM active portfolios, Credicorp Ltd (BAP US) has moved out of favour with EM fund managers.  In a slide that started in late 2019, the percentage of funds with investment in Credicorp Ltd (BAP US) fell a further 6.4% over the last 6-months.  Closures were led by Liontrust, Matthews and HSBC.


EM Fund Positioning:  All You Need to Know

Russia

LUKOIL PJSC explores for, produces, refines, transports, and markets oil and gas mainly from Western Siberia. The Company also manufactures petrochemicals, fuels, and other petroleum products. LUKOIL operates refineries, and gasoline filling stations in Russia and the United States. The Company transports oil through pipelines, and petroleum products with its fleet of ships.

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LUKOIL PJSC (LKOD LI)

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