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>Financials sector allocations continue to move higher.  Average holding weights stand at 18.78%, the highest level since early 2020 and well up from the lows of 15.06% in Sep 2020</li>
<li>Indonesia, Singapore, India and Thailand were responsible for the moves higher, with China &amp; HK not participating in the upturn. </li>
<li>AIA Group Ltd is the most widely held stock.  China Merchants Bank and Bank Central Asia the key overweights. China Construction Bank and ICBC are largely avoided by Asian investors.</li>
</ul>


Financials sector allocations continue to move higher.  Average holding weights stand at 18.78%, the highest level since early 2020 and well up from the lows of 15.06% in Sep 2020
Indonesia, Singapore, India and Thailand were responsible for the moves higher, with China &amp; HK not participating in the upturn. 
AIA Group Ltd is the most widely held stock.  China Merchants Bank and Bank Central Asia the key overweights. China Construction Bank and ICBC are largely avoided by Asian investors.


Asia Ex-Japan:  Financials Recovery Leaves China Behind

Insight Provider, CrossASEAN Research

Nicolas Van Broekhoven

Insight Provider

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

<div>
<p>In a follow up to similar styled notes from 2017-2018-2019</p>
<p><a href="https://www.smartkarma.com/insights/overview-of-my-winners-and-losers-in-2019-and-5-high-conviction-ideas-going-into-2020" target="_blank" data-smartkarma-citation="insights:35000" rel="noopener">Overview of My Winners and Losers in 2019... And 5 High Conviction Ideas Going into 2020</a> </p>
</div><div><p><a href="https://www.smartkarma.com/insights/overview-of-my-winners-and-losers-in-2018-and-5-high-conviction-ideas-going-into-2019" target="_blank" data-smartkarma-citation="insights:26696" rel="noopener">Overview of My Winners and Losers in 2018...and 5 High Conviction Ideas Going into 2019</a> </p></div><div><p><a href="https://www.smartkarma.com/insights/overview-of-my-winners-and-losers-in-2017-and-5-high-conviction-ideas-going-into-2018" target="_blank" data-smartkarma-citation="insights:16368" rel="noopener">Overview of My Winners and Losers in 2017...and 5 High Conviction Ideas Going into 2018</a></p></div><div><p>I again look at my stock ideas that have worked out in 2020, those that have not, and those where the verdict is still pending. I will also highlight 5 new high conviction ideas for 2021.</p></div><div><p>Last year I provided 5 high conviction ideas and here is their performance:</p></div><div><table class="table table-striped"><tbody>
<tr>
<td style="width: 188.19px;">Company</td>
<td style="width: 135.71px;">Share Price 19 Dec 2019</td>
<td style="width: 173.14px;">Share Price 24 December 2020</td>
<td style="width: 64.07px;">Dividends</td>
<td style="width: 80.89px;">% Total Return</td>
</tr>
<tr>
<td style="width: 188.19px;">
<a href="https://www.smartkarma.com/entities/aem-holdings-ltd" target="_blank" data-smartkarma-citation="entities:11019:1" rel="noopener">AEM Holdings (AEM SP)</a> </td>
<td style="width: 135.71px;">1.89 SGD</td>
<td style="width: 173.14px;">3.43 SGD</td>
<td style="width: 64.07px;">0.0081 SGD</td>
<td style="width: 80.89px;">+81.91%</td>
</tr>
<tr>
<td style="width: 188.19px;"><a href="https://www.smartkarma.com/entities/24110" target="_blank" data-smartkarma-citation="entities:24110:1" rel="noopener">Procurri Corporation (PROC SP)</a></td>
<td style="width: 135.71px;">0.48 SGD</td>
<td style="width: 173.14px;">0.28 SGD</td>
<td style="width: 64.07px;">0.000 SGD</td>
<td style="width: 80.89px;">-41.66%</td>
</tr>
<tr>
<td style="width: 188.19px;">
<a href="https://www.smartkarma.com/entities/sunpower-group-ltd" target="_blank" data-smartkarma-citation="entities:18395:1" rel="noopener">Sunpower Group (SPWG SP)</a> </td>
<td style="width: 135.71px;">0.57 SGD</td>
<td style="width: 173.14px;">0.76 SGD</td>
<td style="width: 64.07px;">0.0025 SGD</td>
<td style="width: 80.89px;">+33.77%</td>
</tr>
<tr>
<td style="width: 188.19px;">
<a href="https://www.smartkarma.com/entities/ips-securex-holdings-ltd" target="_blank" data-smartkarma-citation="entities:15717:1" rel="noopener">IPS Securex (IPSS SP)</a> </td>
<td style="width: 135.71px;">0.004 SGD</td>
<td style="width: 173.14px;">0.08 SGD</td>
<td style="width: 64.07px;">0.000 SGD</td>
<td style="width: 80.89px;">+100%</td>
</tr>
<tr>
<td style="width: 188.19px;">
<a href="https://www.smartkarma.com/entities/cosco-shipping-international-8a9750d4-23c7-4832-9b67-2032ca7ec1f3" target="_blank" data-smartkarma-citation="entities:672:1" rel="noopener">Cosco International Holdings (517 HK)</a> </td>
<td style="width: 135.71px;">2.01 HKD</td>
<td style="width: 173.14px;">2.38 HKD</td>
<td style="width: 64.07px;">0.16 HKD</td>
<td style="width: 80.89px;">+26.50%</td>
</tr>
</tbody></table></div>


In a follow up to similar styled notes from 2017-2018-2019
Overview of My Winners and Losers in 2019... And 5 High Conviction Ideas Going into 2020 
Overview of My Winners and Losers in 2018...and 5 High Conviction Ideas Going into 2019 Overview of My Winners and Losers in 2017...and 5 High Conviction Ideas Going into 2018I again look at my stock ideas that have worked out in 2020, those that have not, and those where the verdict is still pending. I will also highlight 5 new high conviction ideas for 2021.Last year I provided 5 high conviction ideas and here is their performance:

Company
Share Price 19 Dec 2019
Share Price 24 December 2020
Dividends
% Total Return



AEM Holdings (AEM SP) 
1.89 SGD
3.43 SGD
0.0081 SGD
+81.91%


Procurri Corporation (PROC SP)
0.48 SGD
0.28 SGD
0.000 SGD
-41.66%



Sunpower Group (SPWG SP) 
0.57 SGD
0.76 SGD
0.0025 SGD
+33.77%



IPS Securex (IPSS SP) 
0.004 SGD
0.08 SGD
0.000 SGD
+100%



Cosco International Holdings (517 HK) 
2.01 HKD
2.38 HKD
0.16 HKD
+26.50%



Overview of My Winners and Losers in 2020...And 5 High Conviction Ideas Going into 2021

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.

<p style="text-align: justify;">In this Smartkarma Original, we seek to study how diversity and incentives influence stock performance and profitability. We tallied diversity and incentive data related to the board of directors, management, and employees across major economies in Asia and picked top 10 companies of each country in terms of market capitalization. We chose to exclude major companies listed in exchanges of other economies such as Tencent and Alibaba to limit our sample size.</p>
<p style="text-align: justify;">Then we devised diversity and incentive scores to assign to those companies and compare those scores against a 5-year trend of their return on shareholders’ equity (ROE) ratios and 1-year stock performance from 1-July-19 to 30-June-20 over its corresponding exchange indices.</p>
<p style="text-align: justify;">The report covers diversity vs. incentives in Asia, diversity score vs. 1-year stock performance and ROE trend, incentives vs. 1-year stock performance and ROE trend, diversity + incentives scores vs. 1-year stock performance and ROE trend, companies with top and bottom diversity + incentive scores, countries with top and bottom average diversity + incentive scores, and incentive score vs. staffing cost trend. </p>
<p style="text-align: justify;">The results show that companies with high diversity scores do perform well. A high diversity score also has a positive impact on the ROE trend, based on our regression analysis at 95% confidence level. We found that employee incentives are not significant as staff diversity but they can still have an influence on company performances at a lower 90% confidence level.</p>
<p style="text-align: justify;">We note that this study is at the preliminary stage and stock performance is a function of many factors, not only the diversity scores that we concluded. Needless to say, our diversity and incentive scores also reflect the level of disclosures by selected companies, not necessarily the actual practice within each company. Our diversity and incentive scores are also not a credit rating or ranking with peers and, hence, do not reflect default probability of selected companies.</p>
<p style="text-align: justify;">We caution that in Asia, many diversity trends in the West may not apply. The fact that many Asian business communities may remain less sensitive to equal opportunities for females, disabled persons, or LGBTQ communities could make returns of Asian companies less correlated to diversity than in the West. Likewise, additional incentives in some countries in Asia may not be necessary as employees’ strong performance (i.e. in Japan) is a norm, according to the prevalent work culture.</p>
<p style="text-align: justify;">Bondcritic is developing a scoring model, which includes environment, social development, and corporate governance; the last of which cover diversity and incentives. This report is the first of the series to uncover shenanigans in the Asian corporate sector.</p>

In this Smartkarma Original, we seek to study how diversity and incentives influence stock performance and profitability. We tallied diversity and incentive data related to the board of directors, management, and employees across major economies in Asia and picked top 10 companies of each country in terms of market capitalization. We chose to exclude major companies listed in exchanges of other economies such as Tencent and Alibaba to limit our sample size.
Then we devised diversity and incentive scores to assign to those companies and compare those scores against a 5-year trend of their return on shareholders’ equity (ROE) ratios and 1-year stock performance from 1-July-19 to 30-June-20 over its corresponding exchange indices.
The report covers diversity vs. incentives in Asia, diversity score vs. 1-year stock performance and ROE trend, incentives vs. 1-year stock performance and ROE trend, diversity + incentives scores vs. 1-year stock performance and ROE trend, companies with top and bottom diversity + incentive scores, countries with top and bottom average diversity + incentive scores, and incentive score vs. staffing cost trend. 
The results show that companies with high diversity scores do perform well. A high diversity score also has a positive impact on the ROE trend, based on our regression analysis at 95% confidence level. We found that employee incentives are not significant as staff diversity but they can still have an influence on company performances at a lower 90% confidence level.
We note that this study is at the preliminary stage and stock performance is a function of many factors, not only the diversity scores that we concluded. Needless to say, our diversity and incentive scores also reflect the level of disclosures by selected companies, not necessarily the actual practice within each company. Our diversity and incentive scores are also not a credit rating or ranking with peers and, hence, do not reflect default probability of selected companies.
We caution that in Asia, many diversity trends in the West may not apply. The fact that many Asian business communities may remain less sensitive to equal opportunities for females, disabled persons, or LGBTQ communities could make returns of Asian companies less correlated to diversity than in the West. Likewise, additional incentives in some countries in Asia may not be necessary as employees’ strong performance (i.e. in Japan) is a norm, according to the prevalent work culture.
Bondcritic is developing a scoring model, which includes environment, social development, and corporate governance; the last of which cover diversity and incentives. This report is the first of the series to uncover shenanigans in the Asian corporate sector.

Asian Governance: Diversity & Incentives Through the Cultural Lens

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<p>On the 5 June 2020, the Treasury of the Australian Government released a 34-page <a href="https://treasury.gov.au/sites/default/files/2020-06/p2020-87595_0.pdf" target="_blank" rel="noopener">document</a> titled <em>Foreign investment reforms, </em>outlining the "most comprehensive" reform to Australian foreign investment review framework since the Foreign Acquisition and Takeovers Act (FATA) was introduced in 1975.</p>
<p>The new powers afforded the government - a draft legislation for consultation will be released next month -  will primarily address:</p>
<ul>
<li>A <strong>new national security</strong> test that will require foreign investors (government or private), to inform the Foreign Investment Review Board (FIRB) if they are preparing to acquire a direct interest in a “<em>sensitive national security business.</em>”</li>
<li>
<div>Streamlining the approval processes for certain privately controlled institutional investment funds that hold purely passive <strong>foreign government funds</strong>, alongside private capital in non-sensitive sectors.</div>
</li>
<li>
<strong>Stronger penalties and enforcement powers</strong> to ensure greater compliance.</li>
</ul>
<div class="content-highlight">
<p>This new draft legislation makes an important distinction between national security sensitive investments and others, and also makes a clear delineation between foreign government investment (FGI) which is passive and which is active.</p>
<p>It also may alleviate the burden on private equity firms as a result, but this proposed reform is clearly a framework for greater scrutiny on FGI and its strategic implications.</p>
</div>
<p>Further comments below the fold ...</p>
<div style="text-align: left;" class="content-caption"><em>For more on M&amp;A in Australia, please see the <a href="https://www.smartkarma.com/insights/quiddity-australia-m-a-guide-2019" target="_blank" data-smartkarma-citation="insights:30118" rel="noopener">Quiddity Australia M&amp;A Guide 2019</a> which is part of a series including... 2019 insights on <a href="https://www.smartkarma.com/insights/quiddity-japan-m-a-guide-2019" target="_blank" rel="noopener">Japan</a>, <a href="https://www.smartkarma.com/insights/quiddity-taiwan-m-a-guide-2019" target="_blank" rel="noopener">Taiwan</a>, <a href="https://www.smartkarma.com/insights/quiddity-india-m-a-guide-2019" target="_blank" rel="noopener">India</a>, <a href="https://www.smartkarma.com/insights/quiddity-singapore-m-a-guide-2019" target="_blank" rel="noopener">Singapore</a>, <a href="https://www.smartkarma.com/insights/quiddity-hong-kong-m-a-guide-2019" target="_blank" rel="noopener">Hong Kong</a>, <a href="https://www.smartkarma.com/insights/quiddity-indonesia-m-a-guide-2019" target="_blank" rel="noopener">Indonesia</a>, <a href="https://www.smartkarma.com/insights/quiddity-thailand-m-a-guide-2019" target="_blank" rel="noopener">Thailand</a>, <a href="https://www.smartkarma.com/insights/quiddity-korea-m-a-guide-2020" target="_blank" rel="noopener">Korea</a>, and the <a href="https://www.smartkarma.com/insights/quiddity-philippines-m-a-guide-2019" target="_blank" rel="noopener">Philippines</a> designed to be used as references. Updated versions will be made available from time to time, and can be found by searching for "<a href="https://www.smartkarma.com/search?q=Quiddity%20M%26A%20Guide" target="_blank" rel="noopener">Quiddity M&amp;A Guide</a>" (or clicking that link).</em></div>

On the 5 June 2020, the Treasury of the Australian Government released a 34-page document titled Foreign investment reforms, outlining the "most comprehensive" reform to Australian foreign investment review framework since the Foreign Acquisition and Takeovers Act (FATA) was introduced in 1975.
The new powers afforded the government - a draft legislation for consultation will be released next month -  will primarily address:

A new national security test that will require foreign investors (government or private), to inform the Foreign Investment Review Board (FIRB) if they are preparing to acquire a direct interest in a “sensitive national security business.”

Streamlining the approval processes for certain privately controlled institutional investment funds that hold purely passive foreign government funds, alongside private capital in non-sensitive sectors.


Stronger penalties and enforcement powers to ensure greater compliance.


This new draft legislation makes an important distinction between national security sensitive investments and others, and also makes a clear delineation between foreign government investment (FGI) which is passive and which is active.
It also may alleviate the burden on private equity firms as a result, but this proposed reform is clearly a framework for greater scrutiny on FGI and its strategic implications.

Further comments below the fold ...
For more on M&amp;A in Australia, please see the Quiddity Australia M&amp;A Guide 2019 which is part of a series including... 2019 insights on Japan, Taiwan, India, Singapore, Hong Kong, Indonesia, Thailand, Korea, and the Philippines designed to be used as references. Updated versions will be made available from time to time, and can be found by searching for "Quiddity M&amp;A Guide" (or clicking that link).

Quiddity M&A: Australia Foreign Investment Reforms

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

MSCI Emerging Markets Index / Technical Analysis

<p style="text-align: justify;">Global equities continue to trend higher following breakouts that have occurred during the past two weeks. Over this timeframe we have been recommending adding exposure to cyclical Sectors and, despite them getting near-term extended, we believe these upside moves are likely just getting going. Additionally, the US dollar is breaking below support and EM equities are breaking above resistance, only adding to our bullish outlook on global equities. We highlight actionable set-ups within the Consumer Discretionary, Global Real Estate and Utilities Sectors.</p>

Global equities continue to trend higher following breakouts that have occurred during the past two weeks. Over this timeframe we have been recommending adding exposure to cyclical Sectors and, despite them getting near-term extended, we believe these upside moves are likely just getting going. Additionally, the US dollar is breaking below support and EM equities are breaking above resistance, only adding to our bullish outlook on global equities. We highlight actionable set-ups within the Consumer Discretionary, Global Real Estate and Utilities Sectors.

Global Equity Strategy: Still Bullish, But Extended Near-Term

Philippines

Ayala Corporation is a Philippine diversified conglomerate with core interests in real estate, banking, telecommunications, and power. It also has significant investments in healthcare, logistics, manufacturing, and education. The company is headquartered in Makati City, Philippines, and was founded in 1834.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Ayala (AC PM)

Asia Ex-Japan: Financials Recovery Leaves China Behind

Financials exposure moves higher. Active weights hit their highest level since early 2020. Indonesia, Singapore and India Financials were the...

Steven Holden

Overview of My Winners and Losers in 2020...And 5 High Conviction Ideas Going into 2021

Looking back at our 2020 favorite picks shows good performance across the board except for Procurri which declined over 40%. We also highlight 5...

Nicolas Van Broekhoven

Asian Governance: Diversity & Incentives Through the Cultural Lens

In this Smartkarma Original, we seek to study how diversity and incentives influence stock performance and profitability. We tallied diversity and...

Bondcritic

Quiddity M&A: Australia Foreign Investment Reforms

On the 5 June 2020, the Treasury of the Australian Government released a 34-page document titled Foreign investment reforms, outlining the "most...

David Blennerhassett

Global Equity Strategy: Still Bullish, But Extended Near-Term

Global equities continue to trend higher following breakouts that have occurred during the past two weeks. Over this timeframe we have been...

Vermilion Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)