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

Equity Bottom-Up

<ul>
<li>The percentage of US active funds invested in Tesla has risen sharply over the course of the year.  A total of 18%, or 88 out of the 496 funds in our US analysis hold a position in Telsa.  Average fund weights across all funds is 0.42%, across Telsa holders is 2.34%.  </li>
<li>Total dollar holdings are at peak levels among the funds in our analysis, with combined AUM in <a href="https://www.smartkarma.com/entities/tesla-motors-inc" target="_blank" data-smartkarma-citation="entities:20279:1" rel="noopener">Tesla Motors (TSLA US)</a> of $37.6bn among the 88 holders.  </li>
<li>Current holders have tended to sell in to strength this year, with $4.4bn in outflows as managers keep Telsa from dominating portfolios if left unchecked.</li>
<li>At current levels, <a href="https://www.smartkarma.com/entities/tesla-motors-inc" target="_blank" data-smartkarma-citation="entities:20279:1" rel="noopener">Tesla Motors (TSLA US)</a> will join the ranks as one of the top underweight holdings among active US managers, currently led by <a href="https://www.smartkarma.com/entities/apple-inc" target="_blank" data-smartkarma-citation="entities:666:1" rel="noopener">Apple Inc (AAPL US)</a> and <a href="https://www.smartkarma.com/entities/microsoft-corp" target="_blank" data-smartkarma-citation="entities:15273:1" rel="noopener">Microsoft Corp (MSFT US)</a> .  If no further buying occurs, Tesla will likely slot in to 4th place behind <a href="https://www.smartkarma.com/entities/amazon-com-inc" target="_blank" data-smartkarma-citation="entities:409:1" rel="noopener">Amazon.com Inc (AMZN US</a> (assuming an inclusion weight of ~1.5%).</li>
<li>We expect buying pressure from benchmark aligned funds who are currently not invested in the stock.  Estimates of $5.8bn when analysing previous index inclusions <a href="https://www.smartkarma.com/entities/facebook-inc-a" target="_blank" data-smartkarma-citation="entities:665:1" rel="noopener">Facebook Inc A (FB US)</a> and <a href="https://www.smartkarma.com/entities/berkshire-hathaway-inc-cl-b" target="_blank" data-smartkarma-citation="entities:8635:1" rel="noopener">Berkshire Hathaway Inc Cl B (BRK/B US)</a> .</li>
<li>Potential $37bn of selling from active US funds, though current holders are long-term holders and not guaranteed to sell in to the rebalance.  We see an imbalance of buying from passive funds who may need to push prices significantly higher to entice these long-term holders to sell.</li>
</ul>Analysis taken from our US research, covering 496 active US equity funds with a combined AUM of $3.4tr.


The percentage of US active funds invested in Tesla has risen sharply over the course of the year.  A total of 18%, or 88 out of the 496 funds in our US analysis hold a position in Telsa.  Average fund weights across all funds is 0.42%, across Telsa holders is 2.34%.  
Total dollar holdings are at peak levels among the funds in our analysis, with combined AUM in Tesla Motors (TSLA US) of $37.6bn among the 88 holders.  
Current holders have tended to sell in to strength this year, with $4.4bn in outflows as managers keep Telsa from dominating portfolios if left unchecked.
At current levels, Tesla Motors (TSLA US) will join the ranks as one of the top underweight holdings among active US managers, currently led by Apple Inc (AAPL US) and Microsoft Corp (MSFT US) .  If no further buying occurs, Tesla will likely slot in to 4th place behind Amazon.com Inc (AMZN US (assuming an inclusion weight of ~1.5%).
We expect buying pressure from benchmark aligned funds who are currently not invested in the stock.  Estimates of $5.8bn when analysing previous index inclusions Facebook Inc A (FB US) and Berkshire Hathaway Inc Cl B (BRK/B US) .
Potential $37bn of selling from active US funds, though current holders are long-term holders and not guaranteed to sell in to the rebalance.  We see an imbalance of buying from passive funds who may need to push prices significantly higher to entice these long-term holders to sell.
Analysis taken from our US research, covering 496 active US equity funds with a combined AUM of $3.4tr.

Tesla Inclusion.  What Will Active US Funds Do?

Founder & CEO Bond Angle, LLC, Bond Angle, LLC

Vicki Bryan

Founder & CEO Bond Angle, LLC

Bond Angle, LLC

Insightful commentary and analysis on bond markets and market movers, including financial, economic, and industry catalysts and management shenanigans. 

High yield market investment research

Credit

<a href="https://www.smartkarma.com/entities/tesla-motors-inc" target="_blank" data-smartkarma-citation="entities:20279:1" rel="noopener">Tesla Motors (TSLA US)</a> CEO Elon Musk should be having a great week. But then the stock dropped on news the company plans to raise another $5 billion from selling stock. Then he complained to the <a href="https://www.wsj.com/articles/elon-musk-decries-m-b-a-ization-of-america-11607548589" target="_blank" rel="noopener">Wall Street Journal</a> that there were too many MBA-types paying too much attention to financial performance of companies and not enough on producing quality products.Which is very interesting because this seems to me to be exactly what Tesla does, not that it seemed to deter investors one bit from gobbling up its $5 billion secondary offering.<a href="https://www.barrons.com/articles/the-jobs-report-was-ugly-but-it-may-be-good-news-for-stocks-51607130127" target="_blank" rel="noopener">Barron's</a> noticed it too, and how much Tesla,<a href="https://www.smartkarma.com/entities/doordash-inc" target="_blank" data-smartkarma-citation="entities:28881:1" rel="noopener">DoorDash Inc (DASH US)</a>, and <a href="https://www.smartkarma.com/entities/airbnb-inc" target="_blank" data-smartkarma-citation="entities:431:1" rel="noopener">Airbnb Inc (ABNBUS)</a> and other similarly inflated deals out this week felt like 1999—and not in a good way.

Tesla Motors (TSLA US) CEO Elon Musk should be having a great week. But then the stock dropped on news the company plans to raise another $5 billion from selling stock. Then he complained to the Wall Street Journal that there were too many MBA-types paying too much attention to financial performance of companies and not enough on producing quality products.Which is very interesting because this seems to me to be exactly what Tesla does, not that it seemed to deter investors one bit from gobbling up its $5 billion secondary offering.Barron's noticed it too, and how much Tesla,DoorDash Inc (DASH US), and Airbnb Inc (ABNBUS) and other similarly inflated deals out this week felt like 1999—and not in a good way.

Barron's Weighs in On "Frenzied Pops" Like Tesla Vs Wary Skeptics Like...

IPO and L/S equity, 2015 Starmine top stock picker, Global Equity Research Ltd

Rickin Thakrar

IPO and L/S equity, 2015 Starmine top stock picker

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Meta Platforms (Facebook) / Equity Bottom-Up

NY Attorney General Letitia James filed an anti-trust lawsuit against <a href="https://www.smartkarma.com/entities/facebook-inc-a" target="_blank" data-smartkarma-citation="entities:665:1" rel="noopener">Facebook Inc A (FB US)</a> which is co-sponsored by Federal Trade Commission and 46 US states. This is not dissimilar to historical legal anti-trust challenges to break up big companies such as Microsoft and AT&amp;T.  While we believe this is unlikely to be resolved soon, we believe Facebook and Big Tech have drawn bipartisan ire due to concerns about anti-competitive behaviour and the spread of disinformation. Our thoughts on the litigation as well as operational concerns are below the fold. 
Our previous research on US regulatory matters and Facebook can be found here
<a href="https://www.smartkarma.com/insights/us-congress-passes-bill-that-could-lead-to-the-delisting-of-chinese-companies-on-us-exchanges" target="_blank" data-smartkarma-citation="insights:46004" rel="noopener">US Congress Passes Bill that Could Lead to the Delisting of Chinese Companies on US Exchanges</a> 
<a href="https://www.smartkarma.com/insights/lvmh-tiffany-oh-bernie-not-like-this" target="_blank" data-smartkarma-citation="insights:43151" rel="noopener">LVMH-Tiffany: Oh Bernie, Not like This.</a> 
<a href="https://www.smartkarma.com/insights/facebook-4q-results-an-easy-beat-has-zuck-turned-the-tanker" target="_blank" data-smartkarma-citation="insights:27657" rel="noopener">Facebook 4Q Results: An Easy Beat - Has Zuck Turned the Tanker?</a> 
<a href="https://www.smartkarma.com/insights/facebook-3q-results-are-the-fangs-safe-for-now" target="_blank" data-smartkarma-citation="insights:25513" rel="noopener">Facebook 3Q Results: Are the FANGS Safe...for Now?</a>

NY Attorney General Letitia James filed an anti-trust lawsuit against Facebook Inc A (FB US) which is co-sponsored by Federal Trade Commission and 46 US states. This is not dissimilar to historical legal anti-trust challenges to break up big companies such as Microsoft and AT&amp;T.  While we believe this is unlikely to be resolved soon, we believe Facebook and Big Tech have drawn bipartisan ire due to concerns about anti-competitive behaviour and the spread of disinformation. Our thoughts on the litigation as well as operational concerns are below the fold. 
Our previous research on US regulatory matters and Facebook can be found here
US Congress Passes Bill that Could Lead to the Delisting of Chinese Companies on US Exchanges 
LVMH-Tiffany: Oh Bernie, Not like This. 
Facebook 4Q Results: An Easy Beat - Has Zuck Turned the Tanker? 
Facebook 3Q Results: Are the FANGS Safe...for Now? 

Facebook and Antitrust - The Beginning of the End for Big-Tech?

Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

The US Federal Trade Commission (FTC) and almost four dozen US states and territories have filed antitrust suits against <a href="https://www.smartkarma.com/entities/facebook-inc-a" target="_blank" data-smartkarma-citation="entities:665:1" rel="noopener">Facebook Inc A (FB US)</a>, seeking to force the social giant to divest its Instagram and Whatsapp functions. For the suits against FB to succeed, the plaintiffs must establish that FB a) enjoys monopoly power that it has used to stifle smaller rivals and that b) consumers have been harmed as a result. Proving that consumers have been harmed will likely prove especially, in our opinion. For its part, FB executives have made it clear they view efforts to break up the company as an "existential threat".So how will the suits play out? The US government's case appears to have bi-partisan and popular support, and FB has made it clear they intend to fight. We expect this case to move slowly, perhaps requiring years to resolve. A clear win for the US government is unlikely; a more likely outcome would be a settlement in which FB agrees to limit its expansion in certain areas and/or its commercial use of user data. Increased scrutiny of FB's practices and a potential settlement could slow FB's growth, but is this really a growth stock? In Q320, OP increased by just 12% on 22% revenue growth, and consensus estimates for 2021e call for similar growth. In our view, the suits represent a likely headache for FB, but not much more, and are thus unlikely to have much impact beyond the company, either.

The US Federal Trade Commission (FTC) and almost four dozen US states and territories have filed antitrust suits against Facebook Inc A (FB US), seeking to force the social giant to divest its Instagram and Whatsapp functions. For the suits against FB to succeed, the plaintiffs must establish that FB a) enjoys monopoly power that it has used to stifle smaller rivals and that b) consumers have been harmed as a result. Proving that consumers have been harmed will likely prove especially, in our opinion. For its part, FB executives have made it clear they view efforts to break up the company as an "existential threat".So how will the suits play out? The US government's case appears to have bi-partisan and popular support, and FB has made it clear they intend to fight. We expect this case to move slowly, perhaps requiring years to resolve. A clear win for the US government is unlikely; a more likely outcome would be a settlement in which FB agrees to limit its expansion in certain areas and/or its commercial use of user data. Increased scrutiny of FB's practices and a potential settlement could slow FB's growth, but is this really a growth stock? In Q320, OP increased by just 12% on 22% revenue growth, and consensus estimates for 2021e call for similar growth. In our view, the suits represent a likely headache for FB, but not much more, and are thus unlikely to have much impact beyond the company, either. 

US FTC & States' Suits Against Facebook Unlikely to Result in Breakup, but Could Slow Expansion

<a href="https://www.smartkarma.com/entities/tesla-motors-inc" target="_blank" data-smartkarma-citation="entities:20279:1" rel="noopener">Tesla Motors (TSLA US)</a> announced Tuesday morning that it plans to raise up to <a href="https://www.wsj.com/articles/tesla-plans-stock-sale-closing-year-of-soaring-gains-11607444177?mod=article_inline" target="_blank" rel="noopener">$5 billion in new sales of stock</a> over time at prevailing market prices. As the third offering this year, including just three months ago, Tesla stands to raise more than $12 billion.And why not, say Tesla fans. With the stock up 674% so far this year, it has become only the <a href="https://www.barrons.com/articles/tesla-becomes-only-the-sixth-company-to-top-600-billion-in-value-51607377650" target="_blank" rel="noopener">sixth company ever to hit $600 </a><a href="https://www.barrons.com/articles/tesla-becomes-only-the-sixth-company-to-top-600-billion-in-value-51607377650" target="_blank" rel="noopener">billion</a> in market value. <a href="https://www.wsj.com/articles/tesla-to-be-added-to-s-p-500-index-11605566006?mod=article_inline" target="_blank" rel="noopener">In two weeks it will added</a> to the <a href="https://www.smartkarma.com/entities/s-p-500" target="_blank" data-smartkarma-citation="entities:22886:1" rel="noopener">S&amp;P 500 (SPX INDEX)</a>.Such blind enthusiasm dismisses Tesla's problematic sales trends, its chronic lack of core unprofitability and free cash flow, it's increasingly threatened prospects, and more.Or that Tesla needs to borrow every quarter and stretch its payables and sell record amounts of stock after reporting last January that it had “<a href="https://tesla-cdn.thron.com/static/O7WXQA_TSLA_Update_Letter_2019-4Q_BPWOH4.pdf" target="_blank" rel="noopener">grown to the point of being self-funding</a>.” Not even close.Yet investors remain unconcerned, and Tesla knows it.<div class="content-highlight">The full Bond Angle report continues below.</div>

Tesla Motors (TSLA US) announced Tuesday morning that it plans to raise up to $5 billion in new sales of stock over time at prevailing market prices. As the third offering this year, including just three months ago, Tesla stands to raise more than $12 billion.And why not, say Tesla fans. With the stock up 674% so far this year, it has become only the sixth company ever to hit $600 billion in market value. In two weeks it will added to the S&amp;P 500 (SPX INDEX).Such blind enthusiasm dismisses Tesla's problematic sales trends, its chronic lack of core unprofitability and free cash flow, it's increasingly threatened prospects, and more.Or that Tesla needs to borrow every quarter and stretch its payables and sell record amounts of stock after reporting last January that it had “grown to the point of being self-funding.” Not even close.Yet investors remain unconcerned, and Tesla knows it.The full Bond Angle report continues below.

Tesla to Sell Another $5 Billion in Stock—Might As Well

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Meta Platforms Inc. operates as a social technology company. The Company builds applications and technologies that help people connect, find communities, and grow businesses. meta Platform is also involved in advertisements, augmented and virtual reality.

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Meta Platforms (Facebook) (META US)

Tesla Inclusion. What Will Active US Funds Do?

What are the current levels of ownership in Tesla Motors? We analyse 496 US active funds with a combined AUM of $3.4tr to find out.

Steven Holden

Barron's Weighs in On "Frenzied Pops" Like Tesla Vs Wary Skeptics Like...

Barron's notes "frenzied" deals this week like Tesla, DoorDash, and AirBnB seem like 1999 exuberance all over again, but there also are "skilled"...

Vicki Bryan

Facebook and Antitrust - The Beginning of the End for Big-Tech?

NY Attorney General Letitia James filed an anti-trust lawsuit against Facebook Inc A (FB US) which is co-sponsored by Federal Trade Commission and...

Rickin Thakrar

US FTC & States' Suits Against Facebook Unlikely to Result in Breakup, but Could Slow Expansion

We believe the US government is unlikely to get a clear win against FB. A drawn-out trial may end in a settlement, but this could take two+ years....

Tracking Traffic

Tesla to Sell Another $5 Billion in Stock—Might As Well

Tesla is selling another $5 billion in stock—because it can and, surprisingly, it probably needs the cash. That doesn't mean investors should buy.

Vicki Bryan

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