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

Cross Asset Strategy

Multiple Countries / Cross Asset Strategy

Active Global managers are running record underweights in Emerging Market stocks.  The average Emerging Markets allocation among the active Global funds in our analysis stands at 9.44%, underweight -4.56% compared to the MSCI ACWI weight with 78.3% of funds underweight the benchmark.
Whilst India Financials are the largest overweight, China &amp; HK Consumer Discretionary and Health Care, Taiwan Financials and Saudi Financials have driven the underweight to all-time highs.
On a stock level, <a href="https://www.smartkarma.com/entities/taiwan-semiconductor-manufacturing-company" target="_blank" data-smartkarma-citation="entities:11230:1" rel="noopener">TSMC (2330 TT)</a> is the most widely held stock, owned by 48% of the 383 active Global managers in our analysis.  The top 6 most widely held stocks, which are <a href="https://www.smartkarma.com/entities/taiwan-semiconductor-manufacturing-company" target="_blank" data-smartkarma-citation="entities:11230:1" rel="noopener">TSMC (2330 TT)</a> , <a href="https://www.smartkarma.com/entities/aia-group-ltd" target="_blank" data-smartkarma-citation="entities:14895:1" rel="noopener">AIA Group Ltd (1299 HK)</a> , <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba Group (BABA US)</a> , <a href="https://www.smartkarma.com/entities/samsung-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:191:1" rel="noopener">Samsung Electronics (005930 KS)</a> , <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> and <a href="https://www.smartkarma.com/entities/hdfc-bank-ltd-4b6b7a92-9087-468d-9dbe-ab169e77f014" target="_blank" data-smartkarma-citation="entities:558:1" rel="noopener">HDFC Bank (HDFCB IN)</a> occupy the top tier.  They are held by significantly more managers and at larger average weight than those below them.
In fact, active Global managers have come to rely on these top 6 names more and more over the last decade.  Almost 40% of all EM allocations are in these 6 stocks.  Should Global managers be better diversifying their EM allocations?
Analysis taken from our Global fund research, covering 383 active Global strategies with combined AUM of $1.05tr

Active Global managers are running record underweights in Emerging Market stocks.  The average Emerging Markets allocation among the active Global funds in our analysis stands at 9.44%, underweight -4.56% compared to the MSCI ACWI weight with 78.3% of funds underweight the benchmark.
Whilst India Financials are the largest overweight, China &amp; HK Consumer Discretionary and Health Care, Taiwan Financials and Saudi Financials have driven the underweight to all-time highs.
On a stock level, TSMC (2330 TT) is the most widely held stock, owned by 48% of the 383 active Global managers in our analysis.  The top 6 most widely held stocks, which are TSMC (2330 TT) , AIA Group Ltd (1299 HK) , Alibaba Group (BABA US) , Samsung Electronics (005930 KS) , Tencent (700 HK) and HDFC Bank (HDFCB IN) occupy the top tier.  They are held by significantly more managers and at larger average weight than those below them.
In fact, active Global managers have come to rely on these top 6 names more and more over the last decade.  Almost 40% of all EM allocations are in these 6 stocks.  Should Global managers be better diversifying their EM allocations?
Analysis taken from our Global fund research, covering 383 active Global strategies with combined AUM of $1.05tr

EM Underweight Hits Record High Among Global Managers