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

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Not all of the stocks in the benchmark MSCI Asia Ex-Japan index are well liked by active fund managers in the region.  In fact, there a large number of stocks that are avoided by the majority of funds.  In this analysis, we screen for these unloved stocks.
We filter our aggregated stock holdings data across the Asia Ex-Japan region as follows:
</div><div><ol>
<li>Average Active Fund Weight &lt; I Shares MSCI Asia Ex-Japan<a href="https://www.smartkarma.com/entities/ishares-msci-cntry-asa-jpn-idx-fnd-etf" target="_blank" data-smartkarma-citation="entities:416:1" rel="noopener"></a> ETF Weight (i.e net underweight)</li>
<li>Percentage of Funds Invested &lt; 2% (i.e less than 2% of funds hold each stock).</li>
</ol></div><div>
The list is headed by <a href="https://www.smartkarma.com/entities/nio-inc" target="_blank" data-smartkarma-citation="entities:27399:1" rel="noopener">NIO Inc (NIO US)</a> , a stock owned by just 1% of active Asia Ex-Japan funds at a net underweight of -0.54%.  In total, 577 out of the 1086 stocks in the benchmark meet this criteria.
Does it pay to avoid unloved stocks?  We have backtested a portfolio of Asia Ex-Japan Unloved stocks based on the screening criteria above, rebalanced monthly going back to 2011 and capped at 50 stocks. The performance suggests that Unloved stocks are best avoided, with consistent underperformance vs the I-Shares Asia Ex-Japan ETF since 2011. 
The analysis uses our Asia Ex-Japan fund data, comprising 97 active long-only Asia Ex-Japan funds with a combined AUM of $70bn.
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Not all of the stocks in the benchmark MSCI Asia Ex-Japan index are well liked by active fund managers in the region.  In fact, there a large number of stocks that are avoided by the majority of funds.  In this analysis, we screen for these unloved stocks.
We filter our aggregated stock holdings data across the Asia Ex-Japan region as follows:

Average Active Fund Weight &lt; I Shares MSCI Asia Ex-Japan ETF Weight (i.e net underweight)
Percentage of Funds Invested &lt; 2% (i.e less than 2% of funds hold each stock).

The list is headed by NIO Inc (NIO US) , a stock owned by just 1% of active Asia Ex-Japan funds at a net underweight of -0.54%.  In total, 577 out of the 1086 stocks in the benchmark meet this criteria.
Does it pay to avoid unloved stocks?  We have backtested a portfolio of Asia Ex-Japan Unloved stocks based on the screening criteria above, rebalanced monthly going back to 2011 and capped at 50 stocks. The performance suggests that Unloved stocks are best avoided, with consistent underperformance vs the I-Shares Asia Ex-Japan ETF since 2011. 
The analysis uses our Asia Ex-Japan fund data, comprising 97 active long-only Asia Ex-Japan funds with a combined AUM of $70bn.


IPO and L/S equity, 2015 Starmine top stock picker, Global Equity Research Ltd

Rickin Thakrar

IPO and L/S equity, 2015 Starmine top stock picker

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/nio-inc" target="_blank" data-smartkarma-citation="entities:27399:1" rel="noopener">NIO Inc (NIO US)</a> reported robust 3Q results with the company reporting 146% sales growth in 3Q20 which is similar to 2Q and after negative sales growth in 1Q20. Nio’s latest results mark a culmination in a staggering change of fortunes in relation to its balance sheet and sales growth. We look at the details below.

NIO Inc (NIO US) reported robust 3Q results with the company reporting 146% sales growth in 3Q20 which is similar to 2Q and after negative sales growth in 1Q20. Nio’s latest results mark a culmination in a staggering change of fortunes in relation to its balance sheet and sales growth. We look at the details below.

Nio Quarterly Results – Is the Good News Priced In?

China Specialist, Auto and Industrial Specialist

Victoria Li

Xpeng is our Top Buy among China's EV makers. Why? Because 1)Xpeng's flagship model is the best product so far among peers; 2)The company is well positioned into high growth potential niche market; 3)Its high input on R&amp;D secures one new model launching per year in the future; 4) Low cashflow risk during company ramp up period due to its good cost control;5) speeding up demand growth of China's EV demand.By using Tesla's peak P/S rate of 16x happened when it net profit turned positive, Xpeng's fair value stands at US$71 for the next 12 months.

Xpeng is our Top Buy among China's EV makers. Why? Because 1)Xpeng's flagship model is the best product so far among peers; 2)The company is well positioned into high growth potential niche market; 3)Its high input on R&amp;D secures one new model launching per year in the future; 4) Low cashflow risk during company ramp up period due to its good cost control;5) speeding up demand growth of China's EV demand.By using Tesla's peak P/S rate of 16x happened when it net profit turned positive, Xpeng's fair value stands at US$71 for the next 12 months.

Equity Analyst, LightStream Research

Aqila Ali

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<a href="https://www.smartkarma.com/entities/nio-inc" target="_blank" data-smartkarma-citation="entities:27399:1" rel="noopener">NIO Inc (NIO US)</a> recently announced the launch of its battery subscription program, now providing a complete system of charging solutions for EVs. The company has developed its business model as planned during the time of its IPO. In this insight, we look at the company’s operations, specifically its new business venture: battery as a service (BaaS), which it will jointly operate with <a href="https://www.smartkarma.com/entities/contemporary-amperex-techn-a" target="_blank" data-smartkarma-citation="entities:24404:1" rel="noopener">CATL (A) (300750 CH)</a>. We will follow up with an insight that will then take a deep dive into financials to see if these operations reflect as expected on the financial performance.

NIO Inc (NIO US) recently announced the launch of its battery subscription program, now providing a complete system of charging solutions for EVs. The company has developed its business model as planned during the time of its IPO. In this insight, we look at the company’s operations, specifically its new business venture: battery as a service (BaaS), which it will jointly operate with CATL (A) (300750 CH). We will follow up with an insight that will then take a deep dive into financials to see if these operations reflect as expected on the financial performance.

A Look at Nio’s Operations: BaaS Is the Recent Addition

Thematic (Sector/Industry)

With more EV brands launching their flagship models, market recognition on EV cars is changing and differentiating from ICE cars in China. More customers are attracted by EV cars themselves due to their unique features, including L3 autonomous driving and smart upgradable control system. This is going to be a long-lasting driver of demand of EV cars in China, more impactful longer-term than shorter term policies like number plate restrictions Shanghai's tightened non-local plate vehicle restriction is speeding up EV demand locally and might contribute 1.7mn new EV car sales. If other top tier cities with restrictions on ICE vehicle plates follow, a national wide EV sales booming.The circular recently issued by State Council indicates China's annual EV PV sales volume might grow with a CAGR of 37% in the next 5 years from 1mn cars to 5mn cars. Government's circular would create a more friendly business environment for EV makers.We prefer Xpeng (XPEV.US), followed by NIO (NIO.US). Current share prices might have priced in strong sales in 2021E, after recent rally. We suggest buy on dips.

With more EV brands launching their flagship models, market recognition on EV cars is changing and differentiating from ICE cars in China. More customers are attracted by EV cars themselves due to their unique features, including L3 autonomous driving and smart upgradable control system. This is going to be a long-lasting driver of demand of EV cars in China, more impactful longer-term than shorter term policies like number plate restrictions Shanghai's tightened non-local plate vehicle restriction is speeding up EV demand locally and might contribute 1.7mn new EV car sales. If other top tier cities with restrictions on ICE vehicle plates follow, a national wide EV sales booming.The circular recently issued by State Council indicates China's annual EV PV sales volume might grow with a CAGR of 37% in the next 5 years from 1mn cars to 5mn cars. Government's circular would create a more friendly business environment for EV makers.We prefer Xpeng (XPEV.US), followed by NIO (NIO.US). Current share prices might have priced in strong sales in 2021E, after recent rally. We suggest buy on dips.

China

NIO Inc. manufactures and sells automobiles. The Company offers electric vehicles and parts, as well as provides battery charging services. NIO serves customers worldwide.

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NIO (NIO US)

Asia's Unloved Stocks

Many stocks in the benchmark MSCI Asia Ex-Japan index are largely avoided by active fund managers. In this analysis, we discover the stocks that...

Steven Holden

Nio Quarterly Results – Is the Good News Priced In?

NIO Inc (NIO US) reported robust 3Q results with the company reporting 146% sales growth in 3Q20 which is similar to 2Q and after negative sales...

Rickin Thakrar

Xpeng (XPEV.US): New Star Rising

By using Tesla's peak P/S rate of 16x happened when it net profit turned positive, Xpeng's fair value stands at US$71 for the next 12 months. Xpeng...

Victoria Li

A Look at Nio’s Operations: BaaS Is the Recent Addition

In this insight, we look at Nio's operations, specifically its new business venture: battery as a service (BaaS), which it will jointly operate...

Aqila Ali

China EV: New Era, Smart Era!

With more EV brands launching their flagship models, market recognition on EV cars is changing and differentiating from ICE cars in China....

Victoria Li

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