Alpha-Centric ESG Research

Kyle Rudden

<ul>
<li>Despite the rough market for ESG-related indexed funds recently, <a href="https://www.smartkarma.com/entities/msci-inc" target="_blank" data-smartkarma-citation="entities:17865:1" rel="noopener">MSCI (MSCI US)</a> continues to increase its market share and solidify its already dominant position as the top indexer.</li>
<li>MSCI ESG-related indexes currently have a 67% (and still growing) market share of the overall ESG indexing ecosystem with nearly US$250 billion in index-linked ETF assets globally.</li>
<li>MSCI's dominant market position is even stronger in important ESG niches/verticals, and two in particular: 1) climate change-focused indexes, and 2) Asia-Pacific ESG markets.</li>
</ul>


Despite the rough market for ESG-related indexed funds recently, MSCI (MSCI US) continues to increase its market share and solidify its already dominant position as the top indexer.
MSCI ESG-related indexes currently have a 67% (and still growing) market share of the overall ESG indexing ecosystem with nearly US$250 billion in index-linked ETF assets globally.
MSCI's dominant market position is even stronger in important ESG niches/verticals, and two in particular: 1) climate change-focused indexes, and 2) Asia-Pacific ESG markets.


MSCI ESG Indexes Gaining in Market Share Despite ESG's Recent "Bear Market"

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.

Thematic (Sector/Industry)

<ul>
<li>Exchanges, especially in developed markets, continue to seek revenue streams outside of the traditional trading and transaction-based fees which has led to a mini-boom in exchange-driven M&amp;A targeting diversification</li>
<li>We use data and IT revenues as a proxy for “stickier” potentially recurring revenues in four DM and three EM exchanges, concluding that DM exchanges are under more diversification pressure</li>
<li>We identify three buy opportunities in exchanges; we like Hong Kong Exchange, Deutsche Borse and we add Nasdaq, whilst we are negative on Coinbase which remains the exchange to avoid</li>
</ul>


Exchanges, especially in developed markets, continue to seek revenue streams outside of the traditional trading and transaction-based fees which has led to a mini-boom in exchange-driven M&amp;A targeting diversification
We use data and IT revenues as a proxy for “stickier” potentially recurring revenues in four DM and three EM exchanges, concluding that DM exchanges are under more diversification pressure
We identify three buy opportunities in exchanges; we like Hong Kong Exchange, Deutsche Borse and we add Nasdaq, whilst we are negative on Coinbase which remains the exchange to avoid


Global Exchanges – Pace of Revenue Diversification Differs Between DM and EM Exchanges

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>Percentage of UK funds invested in the LSE Group has risen from under 10% in 2012 to a record 41.8% today</li>
<li>Rise in ownership has been driven by high growth investors, with both Aggressive Growth and Growth strategies at their highest levels of ownership on record</li>
<li>The LSE Group has risen to the 22nd most widely held stock in the UK and the 12th largest on an average weight basis.</li>
</ul>


Percentage of UK funds invested in the LSE Group has risen from under 10% in 2012 to a record 41.8% today
Rise in ownership has been driven by high growth investors, with both Aggressive Growth and Growth strategies at their highest levels of ownership on record
The LSE Group has risen to the 22nd most widely held stock in the UK and the 12th largest on an average weight basis.


London Stock Exchange Group: Record Holdings

<ul>
<li>We stick with our core theme for exchanges of growing post-trading revenues, as well as capitalising on “big data” in financial transactions and data services, as we head into 2023</li>
<li>We identify four relative value opportunities in exchanges; HKEx, LSEG, MexBolsa and Deutsche Borse feature positively multiple times in our value screens and they are all diversifying revenue streams</li>
<li>We stick with Coinbase as the exchange to avoid, in our view; its revenue streams are heavily exposed to low volumes of crypto transactions, and recent events highlight counterparty risk</li>
</ul>


We stick with our core theme for exchanges of growing post-trading revenues, as well as capitalising on “big data” in financial transactions and data services, as we head into 2023
We identify four relative value opportunities in exchanges; HKEx, LSEG, MexBolsa and Deutsche Borse feature positively multiple times in our value screens and they are all diversifying revenue streams
We stick with Coinbase as the exchange to avoid, in our view; its revenue streams are heavily exposed to low volumes of crypto transactions, and recent events highlight counterparty risk


Global Exchanges – Conviction Picks for 2023

Research from ACF Equity Research, ACF Equity Research

ACF Equity Research

Research from ACF Equity Research

Accuracy | Clarity | Foresight

ACF was set up to improve the effectiveness of capital markets for smaller and mid-sized companies. The majority of jobs are created by smaller companies not global companies. If we can help improve companies use of capital markets more projects will be completed, more jobs created, more global GDP grown, which in turn helps create more resources for education, leading to equality and opportunity for those who are still oppressed by ignorance and poverty.

ACF Equity Research is an independent research house specialising in the highest specification independent equity research for corporate clients.

We deliver premium independent corporate sponsored equity research characterised by its accuracy, clarity and foresight based upon a fundamental valuation approach.

Our independent research is designed to educate our professional investor readers about your company, with an emphasis on clear and accurate explanations. Our mission is to improve company’s liquidity through credible equity research services, excellent international distribution and reliable access for investment managers.

We believe in the importance and value of clarity, the careful articulation of technical ideas, concepts and solutions.

Our team of analysts are independently minded individuals who believe in thoroughness, technical competence and clear punchy communications.

<p>London Stock Exchange Group (LSE: LSEG) is a financial markets infrastructure company operating across the capital markets value chain – capital issuance, pre-trade, trade execution to post-trade. LSEG appears undervalued based upon its top line growth potential and potential OPEX savings. LSEG operates via three divisions – Data &amp; Analytics (data insight and management), Capital Markets (primary issuance and secondary market trading), and Post Trade (clearing, risk management and compliance). The Group has a robust financial position with high quality...</p>

London Stock Exchange Group (LSE: LSEG) is a financial markets infrastructure company operating across the capital markets value chain – capital issuance, pre-trade, trade execution to post-trade. LSEG appears undervalued based upon its top line growth potential and potential OPEX savings. LSEG operates via three divisions – Data &amp; Analytics (data insight and management), Capital Markets (primary issuance and secondary market trading), and Post Trade (clearing, risk management and compliance). The Group has a robust financial position with high quality...

London Stock Exchange Group (LSEG) Core Investment Case ACF Equity Research 24112022

United Kingdom

London Stock Exchange Group plc is the United Kingdom's primary stock exchange. The LSE provides markets that facilitate the raising of capital and the trading of corporate securities, access to a trading environment, as well as real-time pricing and reference information services worldwide.  Market coverage includes equities, derivatives and fixed-interest securities.

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London Stock Exchange (LSEG LN)

Global Exchanges – Pace of Revenue Diversification Differs Between DM and EM Exchanges

We select, as our buys, Nasdaq for its focused diversification strategy, Deutsche Boerse for its relative value versus peers and HKEX for its GARP...

Victor Galliano

London Stock Exchange Group: Record Holdings

Record number of UK funds invested in London Stock Exchange Group. High Growth investors positioned at max ever levels, Value funds...

Steven Holden

Global Exchanges – Conviction Picks for 2023

Our 2023 picks of HKEx, LSEG, MexBolsa and Deutsche Borse feature positively multiple times in our value screens and they are all diversifying...

Victor Galliano

London Stock Exchange Group (LSEG) Core Investment Case ACF Equity Research 24112022

London Stock Exchange Group (LSE: LSEG) is a financial markets infrastructure company operating across the capital markets value chain – capital...

ACF Equity Research

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MSCI ESG Indexes Gaining in Market Share Despite ESG's Recent "Bear Market"

It's been rough for ESG index funds and the ESG indexers that index them. Not for MSCI, though. MSCI continues to gain market share and solidify...

Kyle Rudden

Global Exchanges – Pace of Revenue Diversification Differs Between DM and EM Exchanges

We select, as our buys, Nasdaq for its focused diversification strategy, Deutsche Boerse for its relative value versus peers and HKEX for its GARP...

Victor Galliano

London Stock Exchange Group: Record Holdings

Record number of UK funds invested in London Stock Exchange Group. High Growth investors positioned at max ever levels, Value funds...

Steven Holden

Global Exchanges – Conviction Picks for 2023

Our 2023 picks of HKEx, LSEG, MexBolsa and Deutsche Borse feature positively multiple times in our value screens and they are all diversifying...

Victor Galliano

London Stock Exchange Group (LSEG) Core Investment Case ACF Equity Research 24112022

London Stock Exchange Group (LSE: LSEG) is a financial markets infrastructure company operating across the capital markets value chain – capital...

ACF Equity Research