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

Global Metals and Mining:  Reluctantly Grinding Higher

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 Metals and mining / Thematic (Sector/Industry)

Surging fund inflows have pushed average holding weights in Metals and Mining stocks to their highest allocation in over 7 years.Changes in stock ownership have been overwhelmingly positive.  The percentage of funds invested in <a href="https://www.smartkarma.com/entities/china-hongqiao-group-ltd" target="_blank" data-smartkarma-citation="entities:1909:1" rel="noopener">China Hongqiao (1378 HK)</a> , <a href="https://www.smartkarma.com/entities/posco" target="_blank" data-smartkarma-citation="entities:208:1" rel="noopener">Posco (005490 KS)</a>, <a href="https://www.smartkarma.com/entities/cap-sa" target="_blank" data-smartkarma-citation="entities:24551:1" rel="noopener">CAP SA (CAP CI)</a> and <a href="https://www.smartkarma.com/entities/china-molybdenum-co-ltd-d9c46a67-e31f-431f-9f5f-02222265d701" target="_blank" data-smartkarma-citation="entities:8585:1" rel="noopener">China Molybdenum Co Ltd H (3993 HK)</a> increased by over 4% in the last 6-months.  EM investors scaled back exposures in <a href="https://www.smartkarma.com/entities/gold-fields-ltd" target="_blank" data-smartkarma-citation="entities:25109:1" rel="noopener">Gold Fields Ltd (GFI SJ)</a> and Koza Altin Isletmeleri.Despite the recent squeeze in exposure, there is plenty of room for EM funds to increase positioning further, with the potential to keep prices well supported.We highlight <a href="https://www.smartkarma.com/entities/baoshan-iron-steel-co-a" target="_blank" data-smartkarma-citation="entities:3891:1" rel="noopener">Baoshan Iron &amp; Steel Co A (600019 CH)</a> , <a href="https://www.smartkarma.com/entities/cap-sa" target="_blank" data-smartkarma-citation="entities:24551:1" rel="noopener">CAP SA (CAP CI)</a> , <a href="https://www.smartkarma.com/entities/polymetal-international-plc" target="_blank" data-smartkarma-citation="entities:22095:1" rel="noopener">Polymetal International (POLY LN)</a> , <a href="https://www.smartkarma.com/entities/china-hongqiao-group-ltd" target="_blank" data-smartkarma-citation="entities:1909:1" rel="noopener">China Hongqiao (1378 HK)</a> and <a href="https://www.smartkarma.com/entities/sibanye-stillwater" target="_blank" data-smartkarma-citation="entities:982:1" rel="noopener">Sibanye-Stillwater (SGL SJ)</a> as stocks towards the higher end of their ownership ranges whilst also seeing ownership levels increase among active EM investors.  Previously well held Stocks such as <a href="https://www.smartkarma.com/entities/posco" target="_blank" data-smartkarma-citation="entities:208:1" rel="noopener">Posco (005490 KS)</a> , <a href="https://www.smartkarma.com/entities/grupo-mexico-sab-de-cv" target="_blank" data-smartkarma-citation="entities:24685:1" rel="noopener">Grupo Mexico Sab De Cv (GMEXICOB MM)</a> , <a href="https://www.smartkarma.com/entities/kghm-polska-miedz-sa" target="_blank" data-smartkarma-citation="entities:25186:1" rel="noopener">Kghm Polska Miedz Sa (KGH PW)</a> , <a href="https://www.smartkarma.com/entities/gerdau-sa" target="_blank" data-smartkarma-citation="entities:24538:1" rel="noopener">Gerdau SA (GGBR4 BZ)</a> , <a href="https://www.smartkarma.com/entities/china-steel-corp" target="_blank" data-smartkarma-citation="entities:962:1" rel="noopener">China Steel (2002 TT)</a> and <a href="https://www.smartkarma.com/entities/hyundai-steel-company" target="_blank" data-smartkarma-citation="entities:963:1" rel="noopener">Hyundai Steel (004020 KS)</a> are starting to attract growing interest from EM active managers.From a performance perspective, the EM Metals and Mining index has outperformed the broader market index by 40% over the last 12 months, but there has been some consolidation in June.  Could this be an opportunity to scale up exposure?Analysis taken from our Emerging Markets research, covering 242 active EM strategies with combined AUM of $500bn

Surging fund inflows have pushed average holding weights in Metals and Mining stocks to their highest allocation in over 7 years.Changes in stock ownership have been overwhelmingly positive.  The percentage of funds invested in China Hongqiao (1378 HK) , Posco (005490 KS), CAP SA (CAP CI) and China Molybdenum Co Ltd H (3993 HK) increased by over 4% in the last 6-months.  EM investors scaled back exposures in Gold Fields Ltd (GFI SJ) and Koza Altin Isletmeleri.Despite the recent squeeze in exposure, there is plenty of room for EM funds to increase positioning further, with the potential to keep prices well supported.We highlight Baoshan Iron &amp; Steel Co A (600019 CH) , CAP SA (CAP CI) , Polymetal International (POLY LN) , China Hongqiao (1378 HK) and Sibanye-Stillwater (SGL SJ) as stocks towards the higher end of their ownership ranges whilst also seeing ownership levels increase among active EM investors.  Previously well held Stocks such as Posco (005490 KS) , Grupo Mexico Sab De Cv (GMEXICOB MM) , Kghm Polska Miedz Sa (KGH PW) , Gerdau SA (GGBR4 BZ) , China Steel (2002 TT) and Hyundai Steel (004020 KS) are starting to attract growing interest from EM active managers.From a performance perspective, the EM Metals and Mining index has outperformed the broader market index by 40% over the last 12 months, but there has been some consolidation in June.  Could this be an opportunity to scale up exposure?Analysis taken from our Emerging Markets research, covering 242 active EM strategies with combined AUM of $500bn

EM Metals and Mining:  Active Fund Ownership Surges to 7-Year High