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)

<ul>
<li>Over the past decade, Cyclical sectors have traded places with Sensitive sectors as the largest allocation among active Asia Ex-Japan investors. </li>
<li>The last cycle started in early 2019 and saw Sensitive overtake Cyclicals and move to a key overweight, but this peaked in mid-2021 and has started to reverse.</li>
<li>The major rotation on the year so far has been a scaling back of Technology and Communication Services allocations in favour of Financials and Consumer Discretionary/Staples</li>
</ul>


Over the past decade, Cyclical sectors have traded places with Sensitive sectors as the largest allocation among active Asia Ex-Japan investors. 
The last cycle started in early 2019 and saw Sensitive overtake Cyclicals and move to a key overweight, but this peaked in mid-2021 and has started to reverse.
The major rotation on the year so far has been a scaling back of Technology and Communication Services allocations in favour of Financials and Consumer Discretionary/Staples


Asia Ex-Japan:  Tech to Financials Rotation

Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Independent, Fundamental Quantitative Research

Propitious Research

Fully independent, fundamental and quantitative equity research, focused on companies in the Telecommunication, Media, Technology, Internet and Healthcare sectors in the Global Emerging Markets. Idea generation focused on Quality stocks, trading below their intrinsic Value, with sound Corporate Governance.

Quantitative Analysis

<ul>
<li>An overview (and output) of our machine learning-driven GEM screening model, which seeks to find the best medium-term long ideas within the top100 stocks in the MSCI GEM Index.</li>
<li>The model is based on 1) a quantitative multifactor screening model, enhanced by two AI Technology-based approaches; 2) a Deep Neural Network model, and 3) a Recurrent Neural Network model.</li>
<li>Developed over roughly 4 years and implemented in its current state for over 2 years, the model has a solid real-world alpha-generating performance track record, discussed in detail below.</li>
</ul>


An overview (and output) of our machine learning-driven GEM screening model, which seeks to find the best medium-term long ideas within the top100 stocks in the MSCI GEM Index.
The model is based on 1) a quantitative multifactor screening model, enhanced by two AI Technology-based approaches; 2) a Deep Neural Network model, and 3) a Recurrent Neural Network model.
Developed over roughly 4 years and implemented in its current state for over 2 years, the model has a solid real-world alpha-generating performance track record, discussed in detail below.


Cross Asset Strategy

<ul>
<li>A recent shift in momentum has pushed Taiwan to the largest country level underweight in the Asia Ex-Japan region</li>
<li>Taiwan Technology stocks have driven allocations lower, in addition to Consumer Discretionary and Staples, Health Care and Financials.</li>
<li>Taiwan Tech remains the key risk.  Sentiment is starting to waver when funds are close to maximum exposure.  Underperformance here will be costly on both an absolute a relative basis</li>
</ul>


A recent shift in momentum has pushed Taiwan to the largest country level underweight in the Asia Ex-Japan region
Taiwan Technology stocks have driven allocations lower, in addition to Consumer Discretionary and Staples, Health Care and Financials.
Taiwan Tech remains the key risk.  Sentiment is starting to waver when funds are close to maximum exposure.  Underperformance here will be costly on both an absolute a relative basis


Taiwan Moves to Top Underweight, Tech Overweight Risk

Taiwan Tech Focused Senior Analyst

Patrick Liao

Equity Bottom-Up

<ul>
<li>MediaTek's revised downward forecast for 650-680nm smartphone delivery in 1Q22 earnings conference, but we think that number could be revised down again by the end of July.</li>
<li>MediaTek announced new WiFi products, Filogic 880 and 380, in COMPUTEX2022 on May 24-27. Besides, MediaTek invests in new opportunities for AI in the US.</li>
<li>The mainland China fights fiercely against COVID-19 and stays at the Zero Policy. </li>
</ul>


MediaTek's revised downward forecast for 650-680nm smartphone delivery in 1Q22 earnings conference, but we think that number could be revised down again by the end of July.
MediaTek announced new WiFi products, Filogic 880 and 380, in COMPUTEX2022 on May 24-27. Besides, MediaTek invests in new opportunities for AI in the US.
The mainland China fights fiercely against COVID-19 and stays at the Zero Policy. 


MediaTek (2454.TT): The Smartphone Demand Could Further Decrease in 2022.

King Yuan Electronics Co, Ltd. / Equity Bottom-Up

<ul>
<li>KYEC reached revenue, GM, OPM and Diluted EPS of NT$8,984mn, 35.8%, 25.6% and NT$1.47 respectively in 1Q22.</li>
<li>KYEC could reach to ~10% revenue QoQ growth in 2Q22 because of some orders delayed in Suzhou for COVID-19 controlling measure in 1Q22.</li>
<li>The mainland China smartphone is not strong in 2Q22, but the smartphone chipset testing demand could still be the largest demand in KYEC. </li>
</ul>


KYEC reached revenue, GM, OPM and Diluted EPS of NT$8,984mn, 35.8%, 25.6% and NT$1.47 respectively in 1Q22.
KYEC could reach to ~10% revenue QoQ growth in 2Q22 because of some orders delayed in Suzhou for COVID-19 controlling measure in 1Q22.
The mainland China smartphone is not strong in 2Q22, but the smartphone chipset testing demand could still be the largest demand in KYEC. 


KYEC (2449.TT): It Could Reach ~10% QoQ Growth in 2Q22 Because Some Orders Were Delayed in 1Q22.

Taiwan

MediaTek Inc. is a fabless semiconductor company for wireless communications and digital multimedia solutions. The company provides SOC system solutions for wireless communications, high-definition TV, optical storage, DVD and Blu-ray products.

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Mediatek Inc (2454 TT)

Asia Ex-Japan: Tech to Financials Rotation

Asia Ex-Japan funds are in the midst of a major rotation out of Technology and Communication Services stocks and in to Financials and Consumer...

Steven Holden

Screening for GEMs: July 2022

This insight provides an overview of our, machine learning-driven, proprietary GEM screening model, based on a Multifactor model, a Deep Neural...

Wium Malan, CFA

Taiwan Moves to Top Underweight, Tech Overweight Risk

A recent shift in momentum has pushed Taiwan to the largest country level underweight in the Asia Ex-Japan region, with the Technology sector one...

Steven Holden

MediaTek (2454.TT): The Smartphone Demand Could Further Decrease in 2022.

MediaTek's revised downward smartphone delivery in 1Q22 earnings conference, but we think it could be revised down again by the end of July.

Patrick Liao

KYEC (2449.TT): It Could Reach ~10% QoQ Growth in 2Q22 Because Some Orders Were Delayed in 1Q22.

KYEC could reach to ~10% revenue QoQ growth in 2Q22. The mainland China smartphone is not strong in 2Q22, but the smartphone chipset testing demand...

Patrick Liao

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