Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Steven Holden is the CEO and Founder of Copley Fund Research, an independent provider of research on equity fund positioning and performance.  Set up in 2014, Copley focuses on global, global emerging market, US, Asia Ex-Japan and China active equity funds, covering over $4tr in assets across 1300 active managers.  The company provides data and analysis on market trends, manager exposures and active fund performance to an audience of investment managers, pension funds and fund selectors worldwide.  Mr Holden’s 14-year investment banking career started in 2000, where he worked for Morgan Stanley as an equity derivative trader focused on emerging markets in London.  Following this, he spent 4 years at Citibank in London and Hong Kong as an Executive Director in derivative sales, focused again on emerging markets.

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)

Kenya Energy / Thematic (Sector/Industry)

<ul>
<li>The fallout from the Oil price wars has sent Energy allocations in GEM active portfolios towards their all-time lows. The average EM fund now holds a 4.33% weight in Energy stocks, close to the low of 4.06% in December 2015.</li>
<li>Sentiment in EM Energy stocks is by far the worst of any sector, with positioning at the very low end of the historical range, coupled with negative manager activity since the end of 2019.</li>
<li>Allocations are dominated by the BRIC nations of Russia, India, China and Brazil. Together, they account for 83% of all exposure in the Energy sector and are the mostly widely held countries by far.</li>
<li>On a company level, <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> 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> are the most widely owned stocks, held by 57% and 39% of funds respectively. <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> is the only significant overweight holding (+0.32%) whilst GEM managers hold sizeable underweights in <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> (-0.33%) and <a href="https://www.smartkarma.com/entities/reliance-industries-ltd" target="_blank" data-smartkarma-citation="entities:198:1" rel="noopener">Reliance Industries (RIL IN)</a> (-0.38%).</li>
<li>On a style basis, holding levels are largely correlated to investor style, with Value funds the largest Energy holders followed by Yield, GARP and Growth investors. All style groups are holding close to their lowest allocations in Energy since 2007.  </li>
<li>
<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> and <a href="https://www.smartkarma.com/entities/reliance-industries-ltd" target="_blank" data-smartkarma-citation="entities:198:1" rel="noopener">Reliance Industries (RIL IN)</a> are emerging as the favorite stocks among EM investors and have seen funds buying in to recent weakness.  They are both also notable holdings among Aggressive Growth and Growth investors. <a href="https://www.smartkarma.com/entities/cnooc-ltd" target="_blank" data-smartkarma-citation="entities:175:1" rel="noopener">CNOOC Ltd (883 HK)</a> is preferred by the more Value oriented funds</li>
</ul>


The fallout from the Oil price wars has sent Energy allocations in GEM active portfolios towards their all-time lows. The average EM fund now holds a 4.33% weight in Energy stocks, close to the low of 4.06% in December 2015.
Sentiment in EM Energy stocks is by far the worst of any sector, with positioning at the very low end of the historical range, coupled with negative manager activity since the end of 2019.
Allocations are dominated by the BRIC nations of Russia, India, China and Brazil. Together, they account for 83% of all exposure in the Energy sector and are the mostly widely held countries by far.
On a company level, LUKOIL (LKOH RM) and CNOOC Ltd (883 HK) are the most widely owned stocks, held by 57% and 39% of funds respectively. LUKOIL (LKOH RM) is the only significant overweight holding (+0.32%) whilst GEM managers hold sizeable underweights in Gazprom PJSC (GAZP RM) (-0.33%) and Reliance Industries (RIL IN) (-0.38%).
On a style basis, holding levels are largely correlated to investor style, with Value funds the largest Energy holders followed by Yield, GARP and Growth investors. All style groups are holding close to their lowest allocations in Energy since 2007.  

LUKOIL (LKOH RM) and Reliance Industries (RIL IN) are emerging as the favorite stocks among EM investors and have seen funds buying in to recent weakness.  They are both also notable holdings among Aggressive Growth and Growth investors. CNOOC Ltd (883 HK) is preferred by the more Value oriented funds


Tupras-Turkiye Petrol Rafinerileri (TUPRS TI)

EM Energy:  Sentiment Depressed.  Reliance Industries/Lukoil Bucking the Trend