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)

<ul>
<li>Among active Global equity funds, exposure to Banking stocks is at the lower end of the decade long range</li>
<li>Over the last 6-months, Banks experienced the largest drop in average fund weight of -0.4%, suffered fund outflows of $-1.98bn and had 40 more sellers than buyers over the period.</li>
<li>The failure of SVB Financial, First Republic and Signature Bank has effected sentiment in US Banks, but elsewhere we see strong momentum in Singaporean Banks, Indonesian Banks and Indian Banks.  </li>
</ul>


Among active Global equity funds, exposure to Banking stocks is at the lower end of the decade long range
Over the last 6-months, Banks experienced the largest drop in average fund weight of -0.4%, suffered fund outflows of $-1.98bn and had 40 more sellers than buyers over the period.
The failure of SVB Financial, First Republic and Signature Bank has effected sentiment in US Banks, but elsewhere we see strong momentum in Singaporean Banks, Indonesian Banks and Indian Banks.  


Head of Research and Global Chief Strategist, Steno Research

Andreas Steno

Head of Research and Global Chief Strategist

Macro and Geopolitical Research House

Steno Research

Steno Research is a new macro and geopolitical research house. We are based out of Copenhagen, Denmark, but have an international team and a strong network of sources and partners around the world. The team is lead by Andreas Steno, previous global head of strategy at Nordea Bank, and Mikkel Rosenvold, former chief consultant in the Danish Ministry of Finance.

Cross Asset Strategy

<ul>
<li>Confidence in the US banking system has been under immense stress, and some contagion crossed the Atlantic and struck Europe as well.</li>
<li>At the moment, all banks are trading below their 52w highs – some more notably than others (median -25.82%).</li>
<li>Deposit flights are driven by the inverted yield curve and particularly regional banks are vulnerable to it.</li>
</ul>


Confidence in the US banking system has been under immense stress, and some contagion crossed the Atlantic and struck Europe as well.
At the moment, all banks are trading below their 52w highs – some more notably than others (median -25.82%).
Deposit flights are driven by the inverted yield curve and particularly regional banks are vulnerable to it.


Equity Watch: Fire-Sale or Outright Fire in US Bank Stocks

Chief Economist & Political Strategist, CrossASEAN Research

Prasenjit K. Basu

Chief Economist & Political Strategist

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Macroeconomics

<ul>
<li>With CPI inflation still 6%YoY and core CPI +5.5%YoY (annualised 6%MoM) in Feb'23, the Fed will be obliged to hike 25bp, and likely also reintroduce a reserve requirement for banks. </li>
<li>Unemployment at 3.6% is far below the long-accepted NAIRU of 4.5%, reflected also in average wages still rising 4.6%YoY in Feb'23. M2 declined in Dec'22-Jan'23 but needs to contract more. </li>
<li>A 50bp hike would've been warranted, but the collapse of 3 tech-related banks obliges the Fed to be a bit circumspect. The disappearance of CS can't influence the FOMC decision. </li>
</ul>


With CPI inflation still 6%YoY and core CPI +5.5%YoY (annualised 6%MoM) in Feb'23, the Fed will be obliged to hike 25bp, and likely also reintroduce a reserve requirement for banks. 
Unemployment at 3.6% is far below the long-accepted NAIRU of 4.5%, reflected also in average wages still rising 4.6%YoY in Feb'23. M2 declined in Dec'22-Jan'23 but needs to contract more. 
A 50bp hike would've been warranted, but the collapse of 3 tech-related banks obliges the Fed to be a bit circumspect. The disappearance of CS can't influence the FOMC decision. 


US: Elevated Inflation and Tight Labour Market to Force Hikes Despite Bank Turmoil

Independent Asian Credit Research, Bondcritic

Warut Promboon

Independent Asian Credit Research

Asian Fixed Income/Frontier Market Research

Bondcritic

Bondcritic, established in 2009, is designed to be an independent credit research voice that helps investors gain insights and unbiased analyses on Asian fixed income market. Our mission is to discover deep-value Asian high-yield and distressed bonds with a bottom-up approach, together with the help of our proprietary ESG (Environmental, Social Development, and Governance) model. At the same time, we focus on bringing investment cases of unrated and unloved issuers to the general public.

<ul>
<li>FDIC’s decision to put <a href="https://www.smartkarma.com/entities/svb-financial-group" target="_blank" data-smartkarma-citation="entities:6017:1" rel="noopener">Svb Financial (SIVB US) </a>and <a href="https://www.smartkarma.com/entities/signature-bank" target="_blank" data-smartkarma-citation="entities:3489:1" rel="noopener">Signature Bank (SBNY US)</a> under receivership created the worldwide market panic.</li>
<li>We believe the contagion will be limited to US regional banks which could see rising funding costs and a deposit flight to larger US banks.</li>
<li>The Fed’s multiple rate hikes in 2022 have finally broken the US regional banks and we expect this event to slow down the rate hikes even further.</li>
</ul>


FDIC’s decision to put Svb Financial (SIVB US) and Signature Bank (SBNY US) under receivership created the worldwide market panic.
We believe the contagion will be limited to US regional banks which could see rising funding costs and a deposit flight to larger US banks.
The Fed’s multiple rate hikes in 2022 have finally broken the US regional banks and we expect this event to slow down the rate hikes even further.


Bond Market Monitor: A Contempt Against Depositors

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<ul>
<li>Svb Financial has collapsed and Credit Suisse is on the verge of collapse. We discuss a trading strategy on Korean banks amid the ongoing turbulence on the global banking system.</li>
<li>Our trading strategy is to go long on a basket of three largest banks in Korea (KB, Shinhan, Hana) and go short on a basket of five smaller banks. </li>
<li>Post collapse of SVB Financial, one clear signal appears to be increasing global capital allocation to the "too big to fail banks" and reduced capital allocation to regional banks.</li>
</ul>


Svb Financial has collapsed and Credit Suisse is on the verge of collapse. We discuss a trading strategy on Korean banks amid the ongoing turbulence on the global banking system.
Our trading strategy is to go long on a basket of three largest banks in Korea (KB, Shinhan, Hana) and go short on a basket of five smaller banks. 
Post collapse of SVB Financial, one clear signal appears to be increasing global capital allocation to the "too big to fail banks" and reduced capital allocation to regional banks.


Investors' Capital Allocation Shift Among Korean Banks Post Collapse of SVB Financial

United States

Penns Woods Bancorp, Inc. is a bank holding company of Jersey Shore State Bank. The Company provides a variety of commercial and consumer banking services to individual, business, public, and institutional customers.  Penns Woods operates a network of offices in north central Pennsylvania.

First Guaranty Bancshares, Inc. is a full-service bank.  The bank accepts deposits, makes loans and provides other services for the public.

Investar Holding Corporation is a bank holding company owning or controlling one or more banks. The Company, through subsidiaries, provides commercial banking products. Invest Holding offers its services to individuals and small to medium sized businesses located in Louisiana.

C&F Financial Corporation, through its wholly-owned subsidiary Citizens and Farmers Bank, offers general banking services to individuals, professionals, and small businesses. The Banks originate and sell residential mortgages, and also offer trust, brokerage, and title insurance services. C&F operates in the area between Williamsburg and Richmond, Virginia.

The Community Financial Corporation serves as the holding company of Community Bank of Tri-County.  The Bank conducts full service commercial banking operations throughout the southern Maryland area.  The primary financial services provided include mortgage loans on residential, construction and commercial real estate and various types of consumer lending.

Meridian Bank of Malvern, Pennsylvania operates as a bank. The Bank offers deposit accounts, credit products, real estate financing, residential mortgages, investment and wealth management, and electronic payments processing services. Meridian Bank serves customers in the State of Pennsylvania.

Ames National Corporation is a multi-bank holding corporation.  The Banks offer commercial banking, personal banking, agricultural lending and deposit account services along with trust services and Internet banking services.  Ames affiliates have locations throughout the state of Iowa.

National Bankshares, Inc. is a holding company for the National Bank of Blacksburg.  The Bank attracts deposits from the general public and use these funds to originate commercial, real estate, and consumer loans.  National Bankshares operates in Montgomery, Giles, Carroll,Tazewell, and Grayson counties in Virginia, and Mercer county West Virginia.

Bankwell Financial Group Inc. operates a regional bank in Connecticut. The Bank provides banking and other financial services to private individuals and local businesses. Bankwell Financial also offers credits and loans, as well as electronic banking and online banking services.

Provident Bancorp, Inc. of Maryland provides banking services. The Company offers commercial and small business lending, working capital loans, export credit insurance loans, term financing, and depository services. Provident Bancorp operates in the United States.

PT Bank QNB Indonesia Tbk operates a commercial bank. The Company acquires deposits from the general public and uses those funds to originate a variety of loans.

PT Bank Bumi Arta Tbk provides commercial banking services.

Dhanlaxmi Bank Ltd. accepts deposits and offers commercial banking services. The bank offers personal loans; loans collateralized against future rent income, gold and bonds; home appliance financing loans; agricultural assistance loans; import - export assistance loans; and industrial and trade advance loans.

PT Bank Panin Syariah tbk. provides Islamic banking services. The Bank offers conventional banking services such as savings account, credit cards, financing, and investment services as well as full Islamic banking services in compliance with Shariah law. Bank Panin Syariah serves businesses and personal clients throughout Indonesia.

Public Financial Holdings Ltd, through its subsidiaries, operates in the deposit taking, personal and commercial lending, credit card, mortgage financing, stockbroking, and property investment businesses.  The Company also provides financing to purchasers of taxis and public light buses, leases taxis, and trades taxi cabs and taxi licenses.

PT Bank MNC Internasional TBK, also known as MNC Bank, provides an integrated banking products and services to both corporate and consumer markets. The Bank focuses on consumer and retail banking, including credit card, remittance, cash management, payrolls and many others. MNC Bank is supported by branch & cash offices, payment points & automated teller machines (ATMs) throughout Indonesia.

Bank Of Taipei was founded in 2007. The Company's line of business includes the operation of commercial banks.

The Kita-Nippon Bank, Ltd. is a regional bank based in Tohoku area.  The Bank provides banking services such as deposits, loans, and foreign exchange transactions.  The Kita-Nippon Bank also provides financial services such as leasing, credit cards, and letter of credit, and develops computer software.

PT Bank Capital Indonesia Tbk provides commercial banking services.

The Shimizu Bank, Ltd. is a regional bank based in Shizuoka Prefecture. The Bank provides banking services such as deposits, loans, foreign exchange transactions, and securities investments. The Shimizu Bank provides financial services such as leasing, letter of credit, credit cards, and factoring services, develops computer software.

Signature Bank is a full service commercial bank that serves privately owned business clients and their owners and senior managers. The Bank offers business and personal banking products and services as well as investment, brokerage, asset management and insurance products through its subsidiary, Signature Securities Group Corp.

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Signature Bank (SBNY US)

Global Banks: Positioning Deep Dive

Positioning in the Banking industry group among Global equity funds stalls after US Banking failures, but non-US sentiment is improving.

Steven Holden

Equity Watch: Fire-Sale or Outright Fire in US Bank Stocks

Confidence in the US banking system has been under stress, and contagion struck Europe as well. The troubles have for now been backstopped, but is...

Steno Research

US: Elevated Inflation and Tight Labour Market to Force Hikes Despite Bank Turmoil

CPI inflation of 6%YoY & core CPI rising 6%MoM annualized leave no room for the FOMC to abjure a rate hike. The collapse of 3 techy banks will mean...

Prasenjit K. Basu

Bond Market Monitor: A Contempt Against Depositors

We believe the SVB-SBNY contagion will be limited to US regional banks which could see rising funding costs and a deposit flight to larger US banks.

Bondcritic

Investors' Capital Allocation Shift Among Korean Banks Post Collapse of SVB Financial

Svb Financial has collapsed and Credit Suisse is on the verge of collapse. We discuss a trading strategy on Korean banks amid the ongoing...

Douglas Kim

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