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>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.

TSMC (Taiwan Semiconductor Manufacturing) - ADR / Equity Bottom-Up

TSMC (Taiwan Semiconductor Manufacturing) - ADR

<ul>
<li>TSMC decided to notify clients that it will raise wafer price about 6% from the beginning of 2023.</li>
<li>It's believed the Fabless company's margin could be raised too much, which is considered to be abnormal.</li>
<li>There are too many factors influencing the market right now, like the inflation, geopolitical confrontation,  Russia-Ukraine war, supply-chain risks, and etc.</li>
</ul>


TSMC decided to notify clients that it will raise wafer price about 6% from the beginning of 2023.
It's believed the Fabless company's margin could be raised too much, which is considered to be abnormal.
There are too many factors influencing the market right now, like the inflation, geopolitical confrontation,  Russia-Ukraine war, supply-chain risks, and etc.


TSMC (TSM.US; 2330.TT): Further Wafer Price Raise About 6% from the Beginning of 2023

<ul>
<li>April was another tough month for active Asia Ex-Japan managers. Average returns of -6.18% lagged the MSCI Asia Ex-Japan index by -1.02%, with just 27.8% of funds beating the benchmark.</li>
<li>On the year so far, more than 80% of Asia Ex-Japan funds are underperforming the benchmark. Returns are largely correlated to Style, with Value outperforming Growth by +6.5%.</li>
<li>Overweights in both Mediatek Inc and Sea Ltd  have been the most costly on the year, in addition to a number of underweights in the key state run China banks</li>
</ul>


April was another tough month for active Asia Ex-Japan managers. Average returns of -6.18% lagged the MSCI Asia Ex-Japan index by -1.02%, with just 27.8% of funds beating the benchmark.
On the year so far, more than 80% of Asia Ex-Japan funds are underperforming the benchmark. Returns are largely correlated to Style, with Value outperforming Growth by +6.5%.
Overweights in both Mediatek Inc and Sea Ltd  have been the most costly on the year, in addition to a number of underweights in the key state run China banks


Asia Ex-Japan:  MediaTek, Sea Ltd and China Banks Weigh on Performance

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)

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

TSMC (TSM.US; 2330.TT): Further Wafer Price Raise About 6% from the Beginning of 2023

TSMC will raise wafer price about 6% for all product lines since the beginning of 2023. It's believed the Fabless company's margin could be...

Patrick Liao

Asia Ex-Japan: MediaTek, Sea Ltd and China Banks Weigh on Performance

After 3 years of solid outperformance, active Asia Ex-Japan managers find themselves on unfamiliar ground. Following on from a challenging Q1,...

Steven Holden

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