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>LATAM remains a core and consensus overweight among active EM managers, with 85% of funds positioned ahead of the MSCI EM benchmark</li>
<li>LATAM exposure is concentrated in Brazil, Mexico, and Argentina, which together make up 90% of the region’s allocation.</li>
<li>Banorte remains the most widely held stock in the region, with Embraer SA and Gentera staging notable recoveries from the low positioning levels seen in 2021 and 2022.</li>
</ul>


LATAM remains a core and consensus overweight among active EM managers, with 85% of funds positioned ahead of the MSCI EM benchmark
LATAM exposure is concentrated in Brazil, Mexico, and Argentina, which together make up 90% of the region’s allocation.
Banorte remains the most widely held stock in the region, with Embraer SA and Gentera staging notable recoveries from the low positioning levels seen in 2021 and 2022.


LATAM:  The Conviction Overweight in a Benchmark-Driven World

Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Financials & FinTech research

Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

Equity Bottom-Up

<ul>
<li>Aside from Trump’s tariff policies, Mexican banks are under pressure from government to deliver on more competitive lending rates, with fintech challengers Nubank and MercadoLibre’s MercadoPago gaining traction in Mexico</li>
<li>Despite these challenges, 1Q25 results were sound and the bank sector participated in Mexican bolsa rally in April; yet we believe there is selective attractive value there</li>
<li>We apply our scorecard – which assesses balance sheet strength, returns, credit quality and valuations – that is weighted to arrive at our investment picks; BanBajio and BanRegio stand out</li>
</ul>


Aside from Trump’s tariff policies, Mexican banks are under pressure from government to deliver on more competitive lending rates, with fintech challengers Nubank and MercadoLibre’s MercadoPago gaining traction in Mexico
Despite these challenges, 1Q25 results were sound and the bank sector participated in Mexican bolsa rally in April; yet we believe there is selective attractive value there
We apply our scorecard – which assesses balance sheet strength, returns, credit quality and valuations – that is weighted to arrive at our investment picks; BanBajio and BanRegio stand out


Mexican Banks – Looking Beyond Trump Policies, We See Value in Smaller Caps

<ul>
<li>Banorte, Wal-Mart de Mexico and B3 SA suffer closures from active Emerging Market funds.</li>
<li>All three suffer some of the larger declines in fund positioning across the LATAM region over the last 6-months.</li>
<li>Despite these closures, Banorte, Wal-Mart de Mexico and B3 SA remain among the top 15 most widely owned stocks in LATAM.</li>
</ul>


Banorte, Wal-Mart de Mexico and B3 SA suffer closures from active Emerging Market funds.
All three suffer some of the larger declines in fund positioning across the LATAM region over the last 6-months.
Despite these closures, Banorte, Wal-Mart de Mexico and B3 SA remain among the top 15 most widely owned stocks in LATAM.


LATAM Reversal: Banorte, Wal-Mart and B3 SA.

<ul>
<li>China, India, Saudi Arabia, and Taiwan remain key underweights.  Recovery in Malaysia, Thailand, Turkey, and South Africa, correction in Indonesia and Mexico. Developed Markets the largest overweight for EM investors.</li>
<li>Discretionary, Staples, and Industrials the key overweights, Materials and Energy the underweights. Rotation out of Tech moves positioning from overweight to underweight for the first time since 2019.</li>
<li>Ownership climbs for Meituan and SK Hynix, Baidu and Yum China see sharp declines. Downtrends persist in Vale, Telkom Indonesia.  Recovery in SK Telekom, Garanti Bank, highs in Emaar Properties. </li>
</ul>


China, India, Saudi Arabia, and Taiwan remain key underweights.  Recovery in Malaysia, Thailand, Turkey, and South Africa, correction in Indonesia and Mexico. Developed Markets the largest overweight for EM investors.
Discretionary, Staples, and Industrials the key overweights, Materials and Energy the underweights. Rotation out of Tech moves positioning from overweight to underweight for the first time since 2019.
Ownership climbs for Meituan and SK Hynix, Baidu and Yum China see sharp declines. Downtrends persist in Vale, Telkom Indonesia.  Recovery in SK Telekom, Garanti Bank, highs in Emaar Properties. 


<ul>
<li>Mexico has seen increased inflows and exposure over the past 3-4 years, with funds invested reaching an all-time high of 94.6% and average holding weights climbing to 3.93%.</li>
<li>The percentage of active EM funds overweight the benchmark rose from 20% in 2011 to over 69% last month, making Mexico the largest overweight compared country peers.</li>
<li>Grupo Financiero Banorte and Wal-Mart de Mexico are key contributors to the net Mexican overweight, with Banorte seeing increased exposure of +4.26% of funds in the last 6 months</li>
</ul>


Mexico has seen increased inflows and exposure over the past 3-4 years, with funds invested reaching an all-time high of 94.6% and average holding weights climbing to 3.93%.
The percentage of active EM funds overweight the benchmark rose from 20% in 2011 to over 69% last month, making Mexico the largest overweight compared country peers.
Grupo Financiero Banorte and Wal-Mart de Mexico are key contributors to the net Mexican overweight, with Banorte seeing increased exposure of +4.26% of funds in the last 6 months


Mexico: GEM Funds Wrong-Footed After Election Results.

Mexico

Grupo Financiero Banorte S.A.B. de C.V. is a financial institution in Mexico. The Company offers banking services, premium banking, wholesale banking, leasing and factoring, warehousing, insurance, pensions and retirement savings.

Grupo Financiero Banorte SAB d (GFNORTEO MF)

Price Gauge
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Grupo Financiero Banorte SAB d (GFNORTEO MF)

LATAM: The Conviction Overweight in a Benchmark-Driven World

LATAM remains a core and consensus overweight among active EM managers, with 85% of funds positioned ahead of the MSCI EM benchmark

Steven Holden

Mexican Banks – Looking Beyond Trump Policies, We See Value in Smaller Caps

Mexican banks face pressure from government and fintech challengers, but show strong results and selective value; based on our proprietary...

Victor Galliano

LATAM Reversal: Banorte, Wal-Mart and B3 SA.

Banorte, Wal-Mart de Mexico and B3 SA suffer closures from active Emerging Market funds as strong positioning momentum finally reverses.

Steven Holden

Active GEM Funds: Positioning Chart Pack

In this chart pack, we highlight the key country, sector and stock exposures among active Emerging Markets equity funds.

Steven Holden

Mexico: GEM Funds Wrong-Footed After Election Results.

Pre-election bullishness towards Mexico was at it's highest ever levels in the run up to the election. Managers must now assess whether the new...

Steven Holden

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

LATAM: The Conviction Overweight in a Benchmark-Driven World

LATAM remains a core and consensus overweight among active EM managers, with 85% of funds positioned ahead of the MSCI EM benchmark

Steven Holden

Mexican Banks – Looking Beyond Trump Policies, We See Value in Smaller Caps

​Mexican banks face pressure from government and fintech challengers, but show strong results and selective value; based on our proprietary...

Victor Galliano

LATAM Reversal: Banorte, Wal-Mart and B3 SA.

Banorte, Wal-Mart de Mexico and B3 SA suffer closures from active Emerging Market funds as strong positioning momentum finally reverses.

Steven Holden

Active GEM Funds: Positioning Chart Pack

In this chart pack, we highlight the key country, sector and stock exposures among active Emerging Markets equity funds.

Steven Holden

Mexico: GEM Funds Wrong-Footed After Election Results.

Pre-election bullishness towards Mexico was at it's highest ever levels in the run up to the election. Managers must now assess whether the new...

Steven Holden

Mexican banks face pressure from government and fintech challengers, but show strong results and selective value; based on our proprietary...