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

Thematic (Sector/Industry)

Allocations in China Technology stocks have soared since late last year, breaking out of their decade long range of between 1.4-2% and powering on to 2.55% today.Asia Ex-Japan investors have increased exposures to <a href="https://www.smartkarma.com/entities/beijing-kuaishou-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou Technology (1024 HK)</a>, <a href="https://www.smartkarma.com/entities/longi-green-energy-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:12703:1" rel="noopener">LONGi Green Energy Technology (601012 CH)</a>, <a href="https://www.smartkarma.com/entities/glodon-company-limited-a" target="_blank" data-smartkarma-citation="entities:10536:1" rel="noopener">Glodon Company Limited A (002410 CH)</a> and <a href="https://www.smartkarma.com/entities/xinyi-solar-holdings-ltd" target="_blank" data-smartkarma-citation="entities:318:1" rel="noopener">Xinyi Solar Holdings (968 HK)</a> through the last 6-months.Such has been the scale and speed of the ownership rise suggests a seed change in how investors are viewing the China Information Technology sector.  Currently, China Technology is the 9th largest country/sector holding, behind the major China sectors and the big hitters from South Korea, Taiwan and India.  But, as investors grow in confidence both in buying in to the sector and increasing existing allocations, China Technology looks to have a good chance of making the leap to the big league. Taken from our Asia Ex-Japan fund research, covering 96 active strategies with combined AUM of $82bn.

Allocations in China Technology stocks have soared since late last year, breaking out of their decade long range of between 1.4-2% and powering on to 2.55% today.Asia Ex-Japan investors have increased exposures to Kuaishou Technology (1024 HK), LONGi Green Energy Technology (601012 CH), Glodon Company Limited A (002410 CH) and Xinyi Solar Holdings (968 HK) through the last 6-months.Such has been the scale and speed of the ownership rise suggests a seed change in how investors are viewing the China Information Technology sector.  Currently, China Technology is the 9th largest country/sector holding, behind the major China sectors and the big hitters from South Korea, Taiwan and India.  But, as investors grow in confidence both in buying in to the sector and increasing existing allocations, China Technology looks to have a good chance of making the leap to the big league. Taken from our Asia Ex-Japan fund research, covering 96 active strategies with combined AUM of $82bn.

China Technology:  Sentiment Change Forces Allocation Shift

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

MSCI Emerging Markets Index / Technical Analysis

Price and RS uptrends for the MSCI EM index continues to underpin our bullish outlook for emerging market equities -- remain overweight. We continue to attribute much of EM’s outperformance to the intact downtrend in the US dollar (DXY). As long as weakness in the DXY persists we believe EM’s outperformance is likely to continue.

Price and RS uptrends for the MSCI EM index continues to underpin our bullish outlook for emerging market equities -- remain overweight. We continue to attribute much of EM’s outperformance to the intact downtrend in the US dollar (DXY). As long as weakness in the DXY persists we believe EM’s outperformance is likely to continue.

EM Remains Global Leadership -- Remain Overweight

Broad global indexes (MSCI ACWI, ACWI ex-US, EAFE, and EM) were able to shrug off recent news of a more contagious Covid variant that popped-up in the UK. Additionally, Covid fears have done nothing to derail ongoing positive market dynamics. As long as support levels hold and market dynamics remain positive, our outlook remains bullish and we continue to view any weakness as a buying opportunity. Actionable Themes in today's report: Services, Technology, Manufacturing, and Materials.

Broad global indexes (MSCI ACWI, ACWI ex-US, EAFE, and EM) were able to shrug off recent news of a more contagious Covid variant that popped-up in the UK. Additionally, Covid fears have done nothing to derail ongoing positive market dynamics. As long as support levels hold and market dynamics remain positive, our outlook remains bullish and we continue to view any weakness as a buying opportunity. Actionable Themes in today's report: Services, Technology, Manufacturing, and Materials.

Global Equity Strategy: Support Levels Holding; Bullish Outlook Intact

Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

DZT Research

DZT Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Quantitative Analysis

<ul>
<li>We analysed the earning revision of component stocks of CSI 100 in the past month.</li>
<li>We tabulated stocks with the top impact on index's EPS, stocks' EPS revision, and revenue revision.</li>
<li>We highlighted EPS revision on POLY DEVELOPMENTS, CHINA PETROLEUM AND CHEMICAL, Longi Green, EOPTOLINK TECHNOLOGY, SATELLITE CHEMICAL, HENGLI PETROCHEMICAL, CHONGQING ZHIFEI BIOLOGICAL PRODUCTS, YUNNAN ALUMINIUM.</li>
</ul>


We analysed the earning revision of component stocks of CSI 100 in the past month.
We tabulated stocks with the top impact on index's EPS, stocks' EPS revision, and revenue revision.
We highlighted EPS revision on POLY DEVELOPMENTS, CHINA PETROLEUM AND CHEMICAL, Longi Green, EOPTOLINK TECHNOLOGY, SATELLITE CHEMICAL, HENGLI PETROCHEMICAL, CHONGQING ZHIFEI BIOLOGICAL PRODUCTS, YUNNAN ALUMINIUM.


CSI 100 Index Earning Revision (Jun): POLY DEVELOPMENTS, CHINA PETROLEUM AND CHEMICAL

Cross Asset Strategy

Last month saw China allocations hit record levels across Asia Ex-Japan, Emerging Market and Global active long-only funds.  The average China weight in Asia Ex-Japan funds stands at a record 50.96%, in active GEM funds a record 37.63% and in active Global funds an all-time high of 5.33%However, these increases have come at the expense of greater concentration.  Among Global managers, the top 10 largest China stock holdings now account for 62% of total China allocations, among GEM and Asia Ex-Japan funds just under 50% - an all-time high across all 3 investor groups. Dedicated China managers, however, are more diversified.  In this analysis, we look at the differences between dedicated China funds and their regional peers.  We find that Asia, GEM and Global managers are more concentrated in the Consumer Discretionary and Communication Services sectors, whereas dedicated China managers are more diversified across Technology, Industrials and Health Care stocks.  Regional funds are also underinvested in China A-Shares compared to dedicated China managers, who are running significant overweights vs the MSCI China benchmark.We identify the next generation of Chinese stocks outside of the big index names by following the lead of dedicated managers in the region.  We provide a list of 40 stocks, identified as 'Next Generation' stocks due to their widespread investment in dedicated China funds, but that are currently underowned by Asia Ex-Japan, GEM and Global investors.The list is headed by <a href="https://www.smartkarma.com/entities/jiangsu-hengrui-medicine-co-ltd" target="_blank" data-smartkarma-citation="entities:14128:1" rel="noopener">Jiangsu Hengrui Medicine (600276 CH)</a>, one of the standout domestic holdings within the Health Care sector, followed by <a href="https://www.smartkarma.com/entities/china-tourism-group-duty-free-corp-ltd" target="_blank" data-smartkarma-citation="entities:12278:1" rel="noopener">China Tourism Group Duty Free Corp Ltd (601888 CH)</a> and <a href="https://www.smartkarma.com/entities/luxshare-precision-industry-co-ltd" target="_blank" data-smartkarma-citation="entities:12310:1" rel="noopener">Luxshare Precision Industry (002475 CH)</a> .Analysis taken from our Global, GEM, Asia Ex-Japan and China fund universes.  Global:  386 Active Funds, combined AUM $750bn                                                                                        GEM:  242 Active Funds, combined AUM $370bn                                                                                          Asia Ex-Japan: 98 Active Funds, combined AUM $70bn                                                                              China:  119 Active Funds, combined AUM $50bn

Last month saw China allocations hit record levels across Asia Ex-Japan, Emerging Market and Global active long-only funds.  The average China weight in Asia Ex-Japan funds stands at a record 50.96%, in active GEM funds a record 37.63% and in active Global funds an all-time high of 5.33%However, these increases have come at the expense of greater concentration.  Among Global managers, the top 10 largest China stock holdings now account for 62% of total China allocations, among GEM and Asia Ex-Japan funds just under 50% - an all-time high across all 3 investor groups. Dedicated China managers, however, are more diversified.  In this analysis, we look at the differences between dedicated China funds and their regional peers.  We find that Asia, GEM and Global managers are more concentrated in the Consumer Discretionary and Communication Services sectors, whereas dedicated China managers are more diversified across Technology, Industrials and Health Care stocks.  Regional funds are also underinvested in China A-Shares compared to dedicated China managers, who are running significant overweights vs the MSCI China benchmark.We identify the next generation of Chinese stocks outside of the big index names by following the lead of dedicated managers in the region.  We provide a list of 40 stocks, identified as 'Next Generation' stocks due to their widespread investment in dedicated China funds, but that are currently underowned by Asia Ex-Japan, GEM and Global investors.The list is headed by Jiangsu Hengrui Medicine (600276 CH), one of the standout domestic holdings within the Health Care sector, followed by China Tourism Group Duty Free Corp Ltd (601888 CH) and Luxshare Precision Industry (002475 CH) .Analysis taken from our Global, GEM, Asia Ex-Japan and China fund universes.  Global:  386 Active Funds, combined AUM $750bn                                                                                        GEM:  242 Active Funds, combined AUM $370bn                                                                                          Asia Ex-Japan: 98 Active Funds, combined AUM $70bn                                                                              China:  119 Active Funds, combined AUM $50bn

China's Next Generation:  Diversifying Away from Tencent and Alibaba.

China

LONGi Green Energy Technology Co., Ltd. develops, manufactures and sells silicon rods and silicon wafers. The Company's main products include 6 inch, 6.5 inch and 8 inch monocrystalline silicon rods and wafers.

LONGi Green Energy Technology (601012 CH)

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LONGi Green Energy Technology (601012 CH)

China Technology: Sentiment Change Forces Allocation Shift

Allocations in China Technology stocks have soared since late last year, breaking out of their decade long range of between 1.4-2% and powering on...

Steven Holden

EM Remains Global Leadership -- Remain Overweight

Price and RS uptrends for the MSCI EM index continues to underpin our bullish outlook for emerging market equities -- remain overweight.

Vermilion Research

Global Equity Strategy: Support Levels Holding; Bullish Outlook Intact

As long as support levels hold and market dynamics remain positive, our outlook remains bullish and we continue to view any weakness as a buying...

Vermilion Research

CSI 100 Index Earning Revision (Jun): POLY DEVELOPMENTS, CHINA PETROLEUM AND CHEMICAL

We analyzed CSI 100's consensus for Jun 2026 and highlighted changes of EPS in POLY DEVELOPMENTS (600048 CH), CHINA PETROLEUM AND CHEMICAL (600028...

Ke Yan, CFA, FRM

China's Next Generation: Diversifying Away from Tencent and Alibaba.

China exposure is becoming more concentrated in a small number of large cap stocks. We identify the next generation of China stocks by analyzing...

Steven Holden

Price Gauge

52-week Range

Market Cap (USDm)

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