Global Equities, Multi-Asset PM, Dantes Outlook

Damanick Dantes, CMT

Global Equities, Multi-Asset PM

Dantes Outlook

We invest over a full market cycle, using multi-asset portfolios tailored to each global client, from individuals to family offices.

Built to Endure

Cross Asset Strategy

<ul>
<li>Participation is broadening across markets as cap-weighted U.S. leadership narrows to a handful of stocks.</li>
<li>We stay invested in core trends and see room for emerging opportunities like China ADRs, which saw an upgrade. See our sample portfolio.</li>
<li>For Asia-focused investors, the dollar's softening is concentrated against EM Asia currencies and the carry complex despite the dollar index's bias against EUR.</li>
</ul>


Participation is broadening across markets as cap-weighted U.S. leadership narrows to a handful of stocks.
We stay invested in core trends and see room for emerging opportunities like China ADRs, which saw an upgrade. See our sample portfolio.
For Asia-focused investors, the dollar's softening is concentrated against EM Asia currencies and the carry complex despite the dollar index's bias against EUR.


Cross-Asset Rotations: China, Asia FX, Commodities, and More

<ul>
<li>U.S. small caps, metals and mining stocks, and gold were key detractors within the portfolio suite, offsetting positive allocation effects in our underweight fixed income exposure. </li>
<li>Aggressive portfolios maintained their outperformance YTD driven by strong selections within the equity asset class.</li>
<li>Positioning changes include commodity diversification beyond gold, adding Japanese equities, and maintaining an underweight to bonds.</li>
</ul>


U.S. small caps, metals and mining stocks, and gold were key detractors within the portfolio suite, offsetting positive allocation effects in our underweight fixed income exposure. 
Aggressive portfolios maintained their outperformance YTD driven by strong selections within the equity asset class.
Positioning changes include commodity diversification beyond gold, adding Japanese equities, and maintaining an underweight to bonds.


Portfolio Update: Broader Commodity Positioning, Narrow Equity Leadership

<ul>
<li>
Offshore relative value: We tested 12-month relative returns across onshore vs. offshore, and both vs. EM. Offshore China is the oversold leg, driven by its own weakness rather than onshore strength. </li>
<li>
AI rotation: The performance gap reflects capital favoring the onshore industrial upgrades vs. offshore consumption. Re-rating requires offshore earnings pickup regardless of how cheap the multiple looks.</li>
<li>
Stock selection:<a href="https://www.smartkarma.com/entities/msci-china-index" target="_blank" data-smartkarma-citation="entities:22895:1" rel="noopener">MSCI China Index (MXCN INDEX)</a> is dominated by <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/alibaba-group-holding-limited" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba (9988 HK)</a> while dispersion across the index is wide. We built an investable bucket.
</li>
</ul>



Offshore relative value: We tested 12-month relative returns across onshore vs. offshore, and both vs. EM. Offshore China is the oversold leg, driven by its own weakness rather than onshore strength. 

AI rotation: The performance gap reflects capital favoring the onshore industrial upgrades vs. offshore consumption. Re-rating requires offshore earnings pickup regardless of how cheap the multiple looks.

Stock selection:MSCI China Index (MXCN INDEX) is dominated by Tencent (700 HK) and Alibaba (9988 HK) while dispersion across the index is wide. We built an investable bucket.



China Equities: Relative Upside in Offshore Vs. Onshore Stocks

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

<ul>
<li>Broader ownership, lower exposure: Three-quarters of active GEM funds hold at least one GCC stock, close to a record, but average exposure has fallen to 2.12%.</li>
<li>Saudi gains as the UAE retreats: Recent fund rotation has favoured Saudi Arabia, while UAE banks and property stocks account for many of the largest reductions.</li>
<li>Still underweight: Despite rising participation, the average fund remains 2.55% underweight the GCC, and just 9.2% of managers hold more than the benchmark.</li>
</ul>


Broader ownership, lower exposure: Three-quarters of active GEM funds hold at least one GCC stock, close to a record, but average exposure has fallen to 2.12%.
Saudi gains as the UAE retreats: Recent fund rotation has favoured Saudi Arabia, while UAE banks and property stocks account for many of the largest reductions.
Still underweight: Despite rising participation, the average fund remains 2.55% underweight the GCC, and just 9.2% of managers hold more than the benchmark.


<ul>
<li>China &amp; HK allocations among Global funds have hit new lows, with 25.5% of funds avoiding the region entirely and a record 79.6% underweight versus the benchmark.</li>
<li>In the six months leading up to recent stimulus measures, another 5.4% of funds fully exited their China &amp; HK exposure.</li>
<li>Tencent and Alibaba are well below their 2020 highs, while AIA Group ownership moved lower and China Construction Bank continues its long-term decline</li>
</ul>


China &amp; HK allocations among Global funds have hit new lows, with 25.5% of funds avoiding the region entirely and a record 79.6% underweight versus the benchmark.
In the six months leading up to recent stimulus measures, another 5.4% of funds fully exited their China &amp; HK exposure.
Tencent and Alibaba are well below their 2020 highs, while AIA Group ownership moved lower and China Construction Bank continues its long-term decline


China:  Record Bearish Positioning Ahead of Stimulus

United States

iShares MSCI Emerging Markets ETF is an exchange-traded fund incorporated in the USA. The ETF tracks the performance of the MSCI TR Emerging Markets Index. The ETF holds emerging market stocks that can predominantly be classified as large and mid-cap. It weights the holdings using a market capitalization methodology and rebalances quarterly.

iShares MSCI Emerging Markets (EEM US)

Cross-Asset Rotations: China, Asia FX, Commodities, and More

We scanned a wide universe to establish core and emerging trend positions in US, Chinese, and Japanese equities, commodities, and more.

Damanick Dantes, CMT

Portfolio Update: Broader Commodity Positioning, Narrow Equity Leadership

Full breakdown of our portfolio suite, performance, and new positioning. We broadened our commodity positioning, added Japan, and maintained a core...

Damanick Dantes, CMT

China Equities: Relative Upside in Offshore Vs. Onshore Stocks

Offshore China is improving relative to onshore China. We anticipate a re-ratings cycle and selected a basket of offshore stocks for active returns.

Damanick Dantes, CMT

GCC Positioning: Rotation, Not Retreat

Three-quarters of GEM funds own GCC stocks, yet average exposure is near a five-year low. Our latest report finds managers rotating towards Saudi...

Steven Holden

China: Record Bearish Positioning Ahead of Stimulus

China & HK allocations among Global funds have hit new lows, with 25.5% of funds avoiding the region entirely and a record 79.6% underweight versus...

Steven Holden