Consumer Staples:  EM Managers Positioned at All-Time Lows

Consumer Staples allocations have fallen to their lowest levels in over a decade. The Consumer Staples sector is now the 5th largest sector holding among active Global Emerging Market managers, well behind the heavyweights of Tech, Financials and their Discretionary peers.

A 5-year decline in Consumer Staples exposure was compounded by negative fund activity over the course of 2021. Consumer Staples stocks saw average weights decline by 0.41%, overweights decline by 0.16% and 5.4% of managers move to underweight, all aided by a net -$475m in fund outflows from the sector over the period.

The most widely held stock in the 'Staples sector is Wal-Mart de Mexico SAB de CV (WALMEX* MM EQUITY), held by 34.6% of the funds in our analysis at an average weight of 0.35%. LG Household & Health Care (051900 KS),Kweichow Moutai (600519 CH) and Fomento De Construcciones Y Co (FCC SM) make up the 2nd tier. With all 4 held overweight on average, these stocks are clearly well liked by the active EM investor base.

The size and scale of the exodus over a relatively short time-period, the sustained period of underperformance and potentially a dampening of inflation risks could prompt managers to readdress their allocations.