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

<ul>
<li>We have been expecting near-term downside on ACWI-US and the S&amp;P 500 since our February 27 Int’l Compass, when both ACWI-US and the S&amp;P 500 displayed false breakouts.</li>
<li>Market dynamics have continued to deteriorate to the point where we don't see it as a buying opportunity, and we believe $115 support is not likely to hold on ACWI-US.</li>
<li>Therefore, we are cautious and would get defensive, as we believe the odds of a more prolonged downturn in global equities are rising.</li>
</ul>


We have been expecting near-term downside on ACWI-US and the S&amp;P 500 since our February 27 Int’l Compass, when both ACWI-US and the S&amp;P 500 displayed false breakouts.
Market dynamics have continued to deteriorate to the point where we don't see it as a buying opportunity, and we believe $115 support is not likely to hold on ACWI-US.
Therefore, we are cautious and would get defensive, as we believe the odds of a more prolonged downturn in global equities are rising.


Odds of a Prolonged Downturn Are Rising; We Are Cautious; Get Defensive

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

Equity Bottom-Up

<ul>
<li>After a multi-year drop in ownership, UK fund exposure in HSBC Holdings is on the rise. </li>
<li>Over the last 6-months, average fund weights have increased by +0.33% as new positions outnumbered closing positions by a factor of 2.</li>
<li>With increasing active fund ownership and rising benchmark weights, UK Equity funds need higher conviction to omit HSBC from their portfolio.</li>
</ul>


After a multi-year drop in ownership, UK fund exposure in HSBC Holdings is on the rise. 
Over the last 6-months, average fund weights have increased by +0.33% as new positions outnumbered closing positions by a factor of 2.
With increasing active fund ownership and rising benchmark weights, UK Equity funds need higher conviction to omit HSBC from their portfolio.


Thematic (Sector/Industry)

<ul>
<li>Utilities have benefited from sector rotation among UK managers over the last year.  Typically an underweighted sector, managers are now overweight by 0.22% on average, the highest on record.</li>
<li>Over the last year, average weights have increased by +0.55%, the percentage of funds with exposure by +1.18% and 7.85% of the UK funds in our analysis moved to overweight</li>
<li>Nearly 2/3rds of allocations are in National Grid plc, SSE plc and Northumbrian Water, though UK managers are raising exposure to Centrica, Drax Group and United Utilities. </li>
</ul>


Utilities have benefited from sector rotation among UK managers over the last year.  Typically an underweighted sector, managers are now overweight by 0.22% on average, the highest on record.
Over the last year, average weights have increased by +0.55%, the percentage of funds with exposure by +1.18% and 7.85% of the UK funds in our analysis moved to overweight
Nearly 2/3rds of allocations are in National Grid plc, SSE plc and Northumbrian Water, though UK managers are raising exposure to Centrica, Drax Group and United Utilities. 


Equity analyst UK & Europe, UK Long Short

Peter Toeman

Equity analyst UK & Europe

Accelerating Tomorrow’s Independent Research

Boost Research

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<p>The UK stockmarket has enjoyed a buoyant first quarter keeping track with other developed markets. This might appear somewhat surprising given political turmoil and the existential risk posed by Brexit but it seems that investors always anticipated that Parliament would veto the most damaging "No-deal" option. In this regard investors have been more far-sighted than right-wing Conservative politicians.</p><p>So where to now for FTSE100 ? The index is back to the level of early 18Q4 which seems appropriate given the anticipated economic downturn recession failed to materialise. The old adage "Sell in May and go away" comes to mind. As strategy this has worked quite well. Over the 25 years the market has been lower at the at the end of the second quarter than at the beginning 42%  of the time, producing an average return of minus 0.4%.</p><p>In terms of individual companies, Tesco (which we had in the long portfolio) is amongst the top ten performers year-to-date, and Centrica (in the short portfolio) is the second worst.</p>

The UK stockmarket has enjoyed a buoyant first quarter keeping track with other developed markets. This might appear somewhat surprising given political turmoil and the existential risk posed by Brexit but it seems that investors always anticipated that Parliament would veto the most damaging "No-deal" option. In this regard investors have been more far-sighted than right-wing Conservative politicians.So where to now for FTSE100 ? The index is back to the level of early 18Q4 which seems appropriate given the anticipated economic downturn recession failed to materialise. The old adage "Sell in May and go away" comes to mind. As strategy this has worked quite well. Over the 25 years the market has been lower at the at the end of the second quarter than at the beginning 42%  of the time, producing an average return of minus 0.4%.In terms of individual companies, Tesco (which we had in the long portfolio) is amongst the top ten performers year-to-date, and Centrica (in the short portfolio) is the second worst.

<p><strong>With just two weeks left before the UK is set to leave the EU, the shape of the arrangements with country's largest trading partners is still to be decided. Imminent political developments will determine whether Brexit is hard, soft, deferred, or aborted</strong>.</p>
<p><strong>The UK's principal share index the FTSE 100 is virtually unchanged since we established our Long/Short portfolio a month ago. Results from Lloyds and Centrica have lead to useful outperformance and underperformance respectively. The M&amp;S joint venture with Ocado is judged by investors to have added a lot more value to the latter than the former. We have been wrong-footed by Melrose Industries, but heck, there is always one.</strong></p>
<p><strong>Remembering that no one ever got poor from taking  profits,  we have closed out our long position in Lloyds Banking.  </strong></p>
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<div class="content-caption">S&amp;P Capital IQ</div>
</div>

With just two weeks left before the UK is set to leave the EU, the shape of the arrangements with country's largest trading partners is still to be decided. Imminent political developments will determine whether Brexit is hard, soft, deferred, or aborted.
The UK's principal share index the FTSE 100 is virtually unchanged since we established our Long/Short portfolio a month ago. Results from Lloyds and Centrica have lead to useful outperformance and underperformance respectively. The M&amp;S joint venture with Ocado is judged by investors to have added a lot more value to the latter than the former. We have been wrong-footed by Melrose Industries, but heck, there is always one.
Remembering that no one ever got poor from taking  profits,  we have closed out our long position in Lloyds Banking.  


S&amp;P Capital IQ


United Kingdom

Centrica PLC is an integrated energy company offering a wide range of home and business energy solutions. The Company sources, generates, processes, stores, trades, saves and supplies energy and provides a range of related services.

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Centrica PLC (CNA LN)

Odds of a Prolonged Downturn Are Rising; We Are Cautious; Get Defensive

Odds of a Prolonged Downturn are Rising; We are Cautious; Get Defensive; $115 on ACWI-US Remains Key Level, and is at Risk of Breakdown. Actionable...

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HSBC Holdings: Conviction Returns

After years of decline, UK active managers are buying back into HSBC. Increased fund ownership and rising index weights make it more difficult for...

Steven Holden

UK Utilities Rotation

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Steven Holden

FTSE 100 Long/Short: No 2 No Deal

The UK stockmarket has enjoyed a buoyant first quarter keeping track with other developed markets. This might appear somewhat surprising given...

Boost Research

FTSE 100 Long/Short: Beginner's Luck

With just two weeks left before the UK is set to leave the EU, the shape of the arrangements with country's largest trading partners is still to be...

Boost Research

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