Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>
<a href="https://www.smartkarma.com/entities/tokyo-electron-ltd" target="_blank" data-smartkarma-citation="entities:280:1" rel="noopener">Tokyo Electron (8035 JP)</a> and <a href="https://www.smartkarma.com/entities/advantest-corp" target="_blank" data-smartkarma-citation="entities:18107:1" rel="noopener">Advantest Corp (6857 JP)</a>'s weights in the <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225 (NKY INDEX)</a> exceed 10% and the stocks will be capped at the September rebalance.</li>
<li>Passive trackers hold a lot of both stocks, and the capping flows will increase the real float for both stocks between 2.5%-5%.</li>
<li>The capping in <a href="https://www.smartkarma.com/entities/tokyo-electron-ltd" target="_blank" data-smartkarma-citation="entities:280:1" rel="noopener">Tokyo Electron</a> and <a href="https://www.smartkarma.com/entities/advantest-corp" target="_blank" data-smartkarma-citation="entities:18107:1" rel="noopener">Advantest Corp</a> will result in funding inflows to the other index members. One-way turnover will be 1.8% resulting in a round-trip trade of JPY 1,715bn.</li>
</ul>



Tokyo Electron (8035 JP) and Advantest Corp (6857 JP)'s weights in the Nikkei 225 (NKY INDEX) exceed 10% and the stocks will be capped at the September rebalance.
Passive trackers hold a lot of both stocks, and the capping flows will increase the real float for both stocks between 2.5%-5%.
The capping in Tokyo Electron and Advantest Corp will result in funding inflows to the other index members. One-way turnover will be 1.8% resulting in a round-trip trade of JPY 1,715bn.


Nikkei225 Index Capping: Tokyo Electron, Advantest & The Reverse Funding Trade

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

Cross Asset Strategy

<ul>
<li>Global Ex-USA funds have almost eliminated a decade-long Japan underweight, lifting average exposure to 13.64%, just 0.22% below benchmark.</li>
<li>Japan has seen strong rotation in 2026, with an estimated $3.8bn of net inflows and broadening ownership across Industrials, Financials and Materials.</li>
<li>Stock selection is shifting towards semiconductors and industrial technology, led by Kioxia, Advantest and Sumitomo Electric, while established holdings including Nintendo and Sony lose ground.</li>
</ul>


Global Ex-USA funds have almost eliminated a decade-long Japan underweight, lifting average exposure to 13.64%, just 0.22% below benchmark.
Japan has seen strong rotation in 2026, with an estimated $3.8bn of net inflows and broadening ownership across Industrials, Financials and Materials.
Stock selection is shifting towards semiconductors and industrial technology, led by Kioxia, Advantest and Sumitomo Electric, while established holdings including Nintendo and Sony lose ground.


Japanese Equity Specialist, Ortus Advisors

Andrew Jackson

Japanese Equity Specialist

Ortus Advisors

Thematic (Sector/Industry)

<ul>
<li>Mizuho was out overnight with bullish commentary on the segment and it raised both Advantest Corp  and Shin Etsu Chemical to buy, so this may help mellow the negative sentiment.</li>
<li>Japan AI related had a big fall yesterday but may stabilise soon with many stocks back down around their 200-day levels with intact growth outlooks and earnings done.</li>
<li>Sumi Forestry could see a squeeze after US homebuilders KB Home, DR Horton and Lennar rallied on the Treasury's bond-buying intervention.</li>
</ul>


Mizuho was out overnight with bullish commentary on the segment and it raised both Advantest Corp  and Shin Etsu Chemical to buy, so this may help mellow the negative sentiment.
Japan AI related had a big fall yesterday but may stabilise soon with many stocks back down around their 200-day levels with intact growth outlooks and earnings done.
Sumi Forestry could see a squeeze after US homebuilders KB Home, DR Horton and Lennar rallied on the Treasury's bond-buying intervention.


Japan Morning Connection: Advantest, Shin Etsu Upgraded to Buy Amid Negative AI Sentiment

<ul>
<li>Kioxia likely to see another strong day after Sandisk was +13.7% after announcing positive long-term guidance.</li>
<li>SPE may face pressure after AMAT's guidance beat failed to impress despite topping estimates.</li>
<li>Liberware and Terradrone may gain a competitive edge after new US tariffs target Chinese drone makers at up to 100%.</li>
</ul>


Kioxia likely to see another strong day after Sandisk was +13.7% after announcing positive long-term guidance.
SPE may face pressure after AMAT's guidance beat failed to impress despite topping estimates.
Liberware and Terradrone may gain a competitive edge after new US tariffs target Chinese drone makers at up to 100%.


Japan Morning Connection: Liberware and Terradrone Stand to Gain as US Targets Chinese Drone Makers

<ul>
<li>A huge rebound for risk-on and AI overnight which was sparked by the blow out numbers by Microsoft.</li>
<li>Tokyo Electron numbers on the close yesterday beat after it revised up its 1H guidance.</li>
<li>SPE could see support after Citadel's $10bn Situational Awareness purchase.</li>
</ul>


A huge rebound for risk-on and AI overnight which was sparked by the blow out numbers by Microsoft.
Tokyo Electron numbers on the close yesterday beat after it revised up its 1H guidance.
SPE could see support after Citadel's $10bn Situational Awareness purchase.


Japan Morning Connection: AI Set to Squeeze Hard After Strong Earnings Follow Leveraged Unwind

Japan

Tokyo Electron Limited manufactures and sells industrial electronics products, such as semiconductor manufacturing machines, computer system, and electronic components.  The Company products are sold in US, Taiwan, and others as well as in Japan.

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Tokyo Electron Ltd Unsp Adr (TOELY US)

Nikkei225 Index Capping: Tokyo Electron, Advantest & The Reverse Funding Trade

With index weights higher than 10%, Tokyo Electron and Advantest will be capped at the Sep rebalance. That will result in big funding flows to the...

Brian Freitas

Japan: Underweight No More?

Global Ex-USA funds have almost eliminated their decade-long Japan underweight, as rising allocations and strong inflows drive rotation towards...

Steven Holden

Japan Morning Connection: Advantest, Shin Etsu Upgraded to Buy Amid Negative AI Sentiment

Japan AI related had a big fall yesterday but may stabilise soon with many stocks back down around their 200-day levels with intact growth outlooks...

Andrew Jackson

Japan Morning Connection: Liberware and Terradrone Stand to Gain as US Targets Chinese Drone Makers

Liberware and Terradrone may gain a competitive edge after new US tariffs target Chinese drone makers at up to 100% while SPE may face pressure...

Andrew Jackson

Japan Morning Connection: AI Set to Squeeze Hard After Strong Earnings Follow Leveraged Unwind

AI set to squeeze hard after solid earnings from Microsoft and Lam Research, with Lam Research +18% for its best day since 1999.

Andrew Jackson

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