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

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

Post market close on 23 August, the Index Maintenance Sub-Committee (IMSC) of NSE Indices announced the results of the September index review for the NIFTY family of indices. The rebalance will be effective after the close of trading on 29 September and passive funds will need to trade at the close (VWAP over the last 30 minutes of trading) on the day.There are no changes to the <a href="https://www.smartkarma.com/entities/nifty-index" target="_blank" data-smartkarma-citation="entities:23617:1" rel="noopener">NIFTY Index (NIFTY INDEX)</a>, in line with what we expected.There are 5 changes to the NIFTY Next 50 Index. <a href="https://www.smartkarma.com/entities/bank-of-baroda" target="_blank" data-smartkarma-citation="entities:545:1" rel="noopener">Bank Of Baroda (BOB IN)</a>, <a href="https://www.smartkarma.com/entities/cholamandalam-investment-and-finance" target="_blank" data-smartkarma-citation="entities:17583:1" rel="noopener">Cholamandalam Investment and Finance (CIFC IN)</a>, <a href="https://www.smartkarma.com/entities/jindal-steel-power-ltd" target="_blank" data-smartkarma-citation="entities:6614:1" rel="noopener">Jindal Steel &amp; Power (JSP IN)</a>, <a href="https://www.smartkarma.com/entities/pi-industries-ltd" target="_blank" data-smartkarma-citation="entities:6040:1" rel="noopener">Pi Industries (PI IN)</a> and <a href="https://www.smartkarma.com/entities/steel-authority-of-india" target="_blank" data-smartkarma-citation="entities:14323:1" rel="noopener">Steel Authority of India (SAIL IN)</a> will be included in the index, while <a href="https://www.smartkarma.com/entities/abbott-india-ltd" target="_blank" data-smartkarma-citation="entities:9687:1" rel="noopener">Abbott India (BOOT IN)</a>, <a href="https://www.smartkarma.com/entities/alkem-laboratories-ltd" target="_blank" data-smartkarma-citation="entities:26928:1" rel="noopener">Alkem Laboratories Ltd (ALKEM IN)</a>, <a href="https://www.smartkarma.com/entities/mrf-ltd" target="_blank" data-smartkarma-citation="entities:2930:1" rel="noopener">Mrf Ltd (MRF IN)</a>, <a href="https://www.smartkarma.com/entities/petronet-lng-ltd" target="_blank" data-smartkarma-citation="entities:15235:1" rel="noopener">Petronet LNG (PLNG IN)</a> and <a href="https://www.smartkarma.com/entities/united-breweries-ltd" target="_blank" data-smartkarma-citation="entities:18080:1" rel="noopener">United Breweries (UBBL IN)</a> will be deleted from the index.While the headline impact in terms of ADV looks low, a look at the impact compared to the delivery volumes paints a different picture.There are a whole bunch of changes to constituents of other indices too. However, the assets tracking these indices are small and there will be negligible impact on the stocks.There is an expansion of the index universe for the NIFTY indices with REITs and Infrastructure Investment Trusts (InvITs) becoming eligible for inclusion in the indices.

Post market close on 23 August, the Index Maintenance Sub-Committee (IMSC) of NSE Indices announced the results of the September index review for the NIFTY family of indices. The rebalance will be effective after the close of trading on 29 September and passive funds will need to trade at the close (VWAP over the last 30 minutes of trading) on the day.There are no changes to the NIFTY Index (NIFTY INDEX), in line with what we expected.There are 5 changes to the NIFTY Next 50 Index. Bank Of Baroda (BOB IN), Cholamandalam Investment and Finance (CIFC IN), Jindal Steel &amp; Power (JSP IN), Pi Industries (PI IN) and Steel Authority of India (SAIL IN) will be included in the index, while Abbott India (BOOT IN), Alkem Laboratories Ltd (ALKEM IN), Mrf Ltd (MRF IN), Petronet LNG (PLNG IN) and United Breweries (UBBL IN) will be deleted from the index.While the headline impact in terms of ADV looks low, a look at the impact compared to the delivery volumes paints a different picture.There are a whole bunch of changes to constituents of other indices too. However, the assets tracking these indices are small and there will be negligible impact on the stocks.There is an expansion of the index universe for the NIFTY indices with REITs and Infrastructure Investment Trusts (InvITs) becoming eligible for inclusion in the indices.

NIFTY NEXT50 Index Rebalance: More Beneath The Surface

External broker reports(aggregated public sources), Geojit BNP Paribas

Geojit

External broker reports(aggregated public sources)

Equity Bottom-Up

LNG demand is expected to grow further in fertilizer, refining and transport sectors. Petronet's overall performance is recovering to preCOVID levels. We remain positive on the stock with strong momentum in demand/volumes and healthy pipeline. Hence, we reiterate our BUY rating with a revised TP of Rs. 272 based on 12.0x FY23E adj. EPS. Strong performance supported by demand recovery Consolidated revenues for Q1FY22 grew 13.5% QoQ (+76.1% YoY) to Rs. 8,598cr with volumes maintained at 209 TBTU levels (vs.<div class="content-highlight">Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</div>

LNG demand is expected to grow further in fertilizer, refining and transport sectors. Petronet's overall performance is recovering to preCOVID levels. We remain positive on the stock with strong momentum in demand/volumes and healthy pipeline. Hence, we reiterate our BUY rating with a revised TP of Rs. 272 based on 12.0x FY23E adj. EPS. Strong performance supported by demand recovery Consolidated revenues for Q1FY22 grew 13.5% QoQ (+76.1% YoY) to Rs. 8,598cr with volumes maintained at 209 TBTU levels (vs.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Petronet LNG: Strong Quarter; Outlook Intact

External broker reports(aggregated public sources), ICICI Securities Ltd

ICICI Securities Limited

Petronet LNG is India's leading play in import of LNG in the country and will be a beneficiary of the government's aim to increase the share of natural gas in the energy basket to 15% over the long term The 17.5 mmtpa Dahej terminal has been booked for 15.75 mmtpa under long term, thus providing visibility to long term volumes. Increase in Kochi terminal volumes on commissioning of Kochi-Mangalore pipeline...
<div class="content-highlight">Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</div>

Petronet LNG is India's leading play in import of LNG in the country and will be a beneficiary of the government's aim to increase the share of natural gas in the energy basket to 15% over the long term The 17.5 mmtpa Dahej terminal has been booked for 15.75 mmtpa under long term, thus providing visibility to long term volumes. Increase in Kochi terminal volumes on commissioning of Kochi-Mangalore pipeline...
Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Petronet LNG: Steady Performance; Expansion Plans Moderated

External broker reports(aggregated public sources), HDFC Securities

HDFC Securities

Sobha: Sobha's (SDL) Q1FY22 was subdued with presales volume at 0.9msf (38%/-33% YoY/QoQ). Presales value declined by 36.3% QoQ to INR 6.8bn. Real estate collections slipped to INR 5.5bn (vs INR 7.2bn in Q4FY21). The launch pipeline is robust at 12.6msf with 56% of launches planned for Bengaluru. To tame the commodity inflation and protect margins, SDL reversed discounts and took selective 2-3% price hikes in a few projects. Net debt reduced marginally by 1% QoQ to INR 28.2bn and is expected to reduce further, led by sales momentum, forthcoming launches, and a stable pricing environment.
<div class="content-highlight">Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</div>

Sobha: Sobha's (SDL) Q1FY22 was subdued with presales volume at 0.9msf (38%/-33% YoY/QoQ). Presales value declined by 36.3% QoQ to INR 6.8bn. Real estate collections slipped to INR 5.5bn (vs INR 7.2bn in Q4FY21). The launch pipeline is robust at 12.6msf with 56% of launches planned for Bengaluru. To tame the commodity inflation and protect margins, SDL reversed discounts and took selective 2-3% price hikes in a few projects. Net debt reduced marginally by 1% QoQ to INR 28.2bn and is expected to reduce further, led by sales momentum, forthcoming launches, and a stable pricing environment.
Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

HSIE Results Daily: Petronet LNG , NHPC, Sobha

India

Petronet LNG Ltd. was formed by the Government of India to import liquefied natural gas (LNG) into the country. The Company is a joint venture between GAIL, ONGC, IOC and BPCL. Petronet LNG has also selected GAZ de France as a strategic partner. The Company has set up LNG receiving ports in Dahej (Gujarat) and Kochi (Kerala).

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Petronet LNG (PLNG IN)

EM Energy: Regime Shift

A quarter of active EM managers have no exposure to the Energy sector and only 23% are overweight. With Oil prices at multi-year highs, active EM...

Steven Holden

NIFTY NEXT50 Index Rebalance: More Beneath The Surface

There are 5 changes to the NIFTY Next 50 Index that will be implemented at the close on 29 September. The impact is quite large compared to the...

Brian Freitas

Petronet LNG: Strong Quarter; Outlook Intact

LNG demand is expected to grow further in fertilizer, refining and transport sectors. Petronet's overall performance is recovering to preCOVID...

Geojit

Petronet LNG: Steady Performance; Expansion Plans Moderated

Petronet LNG is India's leading play in import of LNG in the country and will be a beneficiary of the government's aim to increase the share of...

ICICI Securities Limited

HSIE Results Daily: Petronet LNG , NHPC, Sobha

Sobha's (SDL) Q1FY22 was subdued with presales volume at 0.9msf (38%/-33% YoY/QoQ). Presales value declined by 36.3% QoQ to INR 6.8bn. Real estate...

HDFC Securities

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