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>Japan Financials have suffered a long-term decline in exposure.  Ownership has dropped from 56% of managers in December 2013 to just 31.2% today.</li>
<li>However, there are signs that these ownership declines are starting to reverse course, led by manager buying in Japan Post Holdings, Ms&amp;Ad Insurance and Sompo Holdings</li>
<li>If recent activity suggests a shift in sentiment for Japan Financials stocks, there is plenty of room for ownership levels to move higher from here.</li>
</ul>


Japan Financials have suffered a long-term decline in exposure.  Ownership has dropped from 56% of managers in December 2013 to just 31.2% today.
However, there are signs that these ownership declines are starting to reverse course, led by manager buying in Japan Post Holdings, Ms&amp;Ad Insurance and Sompo Holdings
If recent activity suggests a shift in sentiment for Japan Financials stocks, there is plenty of room for ownership levels to move higher from here.


Alpha-Centric ESG Research

Kyle Rudden

In a recently published report (<a href="https://www.smartkarma.com/insights/cop26-u-n-climate-conference-to-address-mitigation-financing-and-carbon-pricing" target="_blank" data-smartkarma-citation="insights:59779" rel="noopener">COP26: U.N. Climate Conference to Address Mitigation, Financing, and Carbon Pricing</a>) I mentioned how the COP26 international climate conference (31 October to 12 November) will have far-reaching implications for global capital markets and investing.That Insight was largely about the COP26 conference itself – background, objectives, three critical agenda items with trillions of dollars at stake, and that will influence global financial markets from today (headlines coming out of the conference) through the end of this century.That report was necessary context for this Insight and others that will follow; successively deeper dives into country-specific climate action plans, and investment themes and trading ideas around the COP26 conference and climate change in general. This is the first of those follow-up reports.Herein, I present a brief overview of investment themes and angles directly linked to the three key COP26 agenda items: 1) mitigation of global warming, 2) climate finance, and 3) the development of international carbon markets and pricing mechanisms. Themes and subthemes such as:<ul>
<li>
Climate Transition: "Green" utilities, renewable energy, cleantech, electric vehicles and other areas of smart mobility, green buildings, and related. The "buy solar, sell coal" kinds of stuff.</li>
<li>
Climate Financing: Financial sector stocks poised to benefit from climate change mitigation, reduced risk from portfolio debarbonisation, and new inflows into sustainable/ESG funds.</li>
<li>
Carbon Markets: Pure-play (or close thereto) carbon capture and storage/sequestration (CCS) stocks, plus a few financial sector overlaps (e.g., related to carbon markets, futures, etc.)</li>
</ul>

In a recently published report (COP26: U.N. Climate Conference to Address Mitigation, Financing, and Carbon Pricing) I mentioned how the COP26 international climate conference (31 October to 12 November) will have far-reaching implications for global capital markets and investing.That Insight was largely about the COP26 conference itself – background, objectives, three critical agenda items with trillions of dollars at stake, and that will influence global financial markets from today (headlines coming out of the conference) through the end of this century.That report was necessary context for this Insight and others that will follow; successively deeper dives into country-specific climate action plans, and investment themes and trading ideas around the COP26 conference and climate change in general. This is the first of those follow-up reports.Herein, I present a brief overview of investment themes and angles directly linked to the three key COP26 agenda items: 1) mitigation of global warming, 2) climate finance, and 3) the development of international carbon markets and pricing mechanisms. Themes and subthemes such as:

Climate Transition: "Green" utilities, renewable energy, cleantech, electric vehicles and other areas of smart mobility, green buildings, and related. The "buy solar, sell coal" kinds of stuff.

Climate Financing: Financial sector stocks poised to benefit from climate change mitigation, reduced risk from portfolio debarbonisation, and new inflows into sustainable/ESG funds.

Carbon Markets: Pure-play (or close thereto) carbon capture and storage/sequestration (CCS) stocks, plus a few financial sector overlaps (e.g., related to carbon markets, futures, etc.)


COP26: An Overview of Investment Themes and Catalysts Related to COP26 Conference

More and more, companies are using cryptocurrency (especially Bitcoin) as part of their corporate treasury management strategies, discussed in <a href="https://www.smartkarma.com/insights/bitcoin-on-balance-sheets-indirect-crypto-exposure-considerations-for-crypto-leery-esg-investors" target="_blank" data-smartkarma-citation="insights:52207" rel="noopener">Bitcoin on Balance Sheets: Indirect Crypto Exposure Considerations for Crypto-Leery ESG Investors</a>. That trend is behind the topic of this report.Greater mainstream corporate and institutional use of Bitcoin is driving the growth in demand for cryptocurrency custody services, and banks around the world are rushing to fill that demand. It is a logical and relatively safe foray into the cryptocurrency space, albeit not without some risk.For ESG investors wishing to avoid direct or indirect cryptocurrency exposure, perhaps due to their views on crypto's wretched Environmental footprint, the banks herein will have significant indirect crypto exposure. However, I personally find it hard to be categorically bearish on this theme.Whilst the theme in the first Insight (holding Bitcoin on balance sheets) represents real risk, this is different. It could be argued that crypto custody perpetuates <a href="https://www.smartkarma.com/entities/bitcoin-usd" target="_blank" data-smartkarma-citation="entities:25895:1" rel="noopener">Bitcoin (XBT)</a>'s climate impacts, thus is a bad thing. Perhaps, from a purely idealistic ESG viewpoint, that is partially true.However, the connection from custody service to carbon emissions is so far removed, and the risks associated with entering the crypto custody space are so comparatively minimal, that the opinion on this theme should be "neutral" at worst, and definitely not across-the-board "negative."But really, that is for each investor to decide, because the crypto/ESG issue is highly subjective.

More and more, companies are using cryptocurrency (especially Bitcoin) as part of their corporate treasury management strategies, discussed in Bitcoin on Balance Sheets: Indirect Crypto Exposure Considerations for Crypto-Leery ESG Investors. That trend is behind the topic of this report.Greater mainstream corporate and institutional use of Bitcoin is driving the growth in demand for cryptocurrency custody services, and banks around the world are rushing to fill that demand. It is a logical and relatively safe foray into the cryptocurrency space, albeit not without some risk.For ESG investors wishing to avoid direct or indirect cryptocurrency exposure, perhaps due to their views on crypto's wretched Environmental footprint, the banks herein will have significant indirect crypto exposure. However, I personally find it hard to be categorically bearish on this theme.Whilst the theme in the first Insight (holding Bitcoin on balance sheets) represents real risk, this is different. It could be argued that crypto custody perpetuates Bitcoin (XBT)'s climate impacts, thus is a bad thing. Perhaps, from a purely idealistic ESG viewpoint, that is partially true.However, the connection from custody service to carbon emissions is so far removed, and the risks associated with entering the crypto custody space are so comparatively minimal, that the opinion on this theme should be "neutral" at worst, and definitely not across-the-board "negative."But really, that is for each investor to decide, because the crypto/ESG issue is highly subjective.

Banks on the Bitcoin Bandwagon: Cashing in Through Crypto Custody Services

Insurance & Central Asia-focused Analyst, KT Capital Group

Alec Tseung

Insurance & Central Asia-focused Analyst

Thematic (Sector/Industry)

This Original aims to identify the key investment opportunities among the listed brokers in the three major East Asian countries - China, Japan, and Korea. By looking at the development of the brokerage sectors in these three countries, we observe a general trend where upstart online brokers first compete against the more established brokers based on their cost and technological advantages. This then pushes the more established brokers to either focus on more lucrative wholesale businesses or adopt and invest in tech initiatives in order to stay competitive in the retail market.After further establishing themselves in the retail market, these upstart online brokers then also diversify and expand into the more lucrative wealth/asset management or even wholesale businesses.  By gauging at which phase the broker is in this cycle, investors can have a good understanding of its future outlook.In our opinion, Korean brokers currently offer the best value, while the Chinese pure-play online brokers offer the highest growth potential. As such, our pecking order, in terms of investment attractiveness, is <a href="https://www.smartkarma.com/entities/kiwoom-securities-co-ltd" target="_blank" data-smartkarma-citation="entities:20418:1" rel="noopener">Kiwoom Securities (039490 KS)</a>, <a href="https://www.smartkarma.com/entities/east-money-information-co-a" target="_blank" data-smartkarma-citation="entities:8075:1" rel="noopener">East Money Information Co A (300059 CH)</a>, <a href="https://www.smartkarma.com/entities/futu-holdings-ltd" target="_blank" data-smartkarma-citation="entities:27858:1" rel="noopener">Futu Holdings Ltd (FUTU US)</a>, <a href="https://www.smartkarma.com/entities/monex-group-inc" target="_blank" data-smartkarma-citation="entities:14211:1" rel="noopener">Monex Group Inc (8698 JP)</a> / <a href="https://www.smartkarma.com/entities/huatai-securities-co-ltd-h" target="_blank" data-smartkarma-citation="entities:449:1" rel="noopener">Huatai Securities Co Ltd (H) (6886 HK)</a>.  <h2>What is Original?</h2>In this Original, we look into the competitive landscape of the brokerage sectors in China, Japan, and Korea. 55 listed brokers from these three countries are included in this Original as the company universe for regression analysis. Among them, a total of 8 brokers are chosen, with their company profiles separately presented, to further showcase and contrast the impact of competition and technological disruption. Based on this, a pecking order is then developed, both on a country and a company basis.

This Original aims to identify the key investment opportunities among the listed brokers in the three major East Asian countries - China, Japan, and Korea. By looking at the development of the brokerage sectors in these three countries, we observe a general trend where upstart online brokers first compete against the more established brokers based on their cost and technological advantages. This then pushes the more established brokers to either focus on more lucrative wholesale businesses or adopt and invest in tech initiatives in order to stay competitive in the retail market.After further establishing themselves in the retail market, these upstart online brokers then also diversify and expand into the more lucrative wealth/asset management or even wholesale businesses.  By gauging at which phase the broker is in this cycle, investors can have a good understanding of its future outlook.In our opinion, Korean brokers currently offer the best value, while the Chinese pure-play online brokers offer the highest growth potential. As such, our pecking order, in terms of investment attractiveness, is Kiwoom Securities (039490 KS), East Money Information Co A (300059 CH), Futu Holdings Ltd (FUTU US), Monex Group Inc (8698 JP) / Huatai Securities Co Ltd (H) (6886 HK).  What is Original?In this Original, we look into the competitive landscape of the brokerage sectors in China, Japan, and Korea. 55 listed brokers from these three countries are included in this Original as the company universe for regression analysis. Among them, a total of 8 brokers are chosen, with their company profiles separately presented, to further showcase and contrast the impact of competition and technological disruption. Based on this, a pecking order is then developed, both on a country and a company basis.

Asian Brokers: A Competition Between Value and Growth

'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

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.

• RESULTS - 30th MARCH • <figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/198/242/original/image_63264034621617139328848.png?1617139329" class="editor-image img-responsive" data-smartkarma-image-id="198242"></figure><div class="content-caption">Source for all charts &amp; tables: Japan Analytics  </div>RESULTS - Only one-quarter of Tuesday's results announcements scored positively. Of the larger caps, <a href="https://www.smartkarma.com/entities/samty-co-ltd" target="_blank" data-smartkarma-citation="entities:18956:1" rel="noopener">Samty (3244 JP)</a> fell into the red for the first time since listing, while at <a href="https://www.smartkarma.com/entities/nishimatsuya-chain-co-ltd" target="_blank" data-smartkarma-citation="entities:13375:1" rel="noopener">Nishimatsuya Chain (7545 JP)</a>, the earnings momentum may have peaked; however, there was a slight improvement in the company's Forecast/Revision Score as the company looks forward to FY22.   <figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/198/243/original/image_48031735431617139751335.png?1617139751" class="editor-image img-responsive" data-smartkarma-image-id="198243"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/198/244/original/image_10841378641617139785703.png?1617139786" class="editor-image img-responsive"></figure>• FORECASTS/REVISIONS - 30th MARCH •<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/198/245/original/image_80824717151617139973935.png?1617139974" class="editor-image img-responsive" data-smartkarma-image-id="198245"></figure>FORECASTS/REVISIONS - Of the 18 annual forecasts and revisions, only half scored positively. The DETAIL Section below focuses on <a href="https://www.smartkarma.com/entities/nishimatsuya-chain-co-ltd" target="_blank" data-smartkarma-citation="entities:13375:1" rel="noopener">Nishimatsuya Chain (7545 JP)</a> and <a href="https://www.smartkarma.com/entities/aeon-mall-co-ltd" target="_blank" data-smartkarma-citation="entities:5262:1" rel="noopener">AEON Mall (8905 JP)</a>.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/198/246/original/image_74897330061617140317631.png?1617140318" class="editor-image img-responsive" data-smartkarma-image-id="198246"></figure>

• RESULTS - 30th MARCH • Source for all charts &amp; tables: Japan Analytics  RESULTS - Only one-quarter of Tuesday's results announcements scored positively. Of the larger caps, Samty (3244 JP) fell into the red for the first time since listing, while at Nishimatsuya Chain (7545 JP), the earnings momentum may have peaked; however, there was a slight improvement in the company's Forecast/Revision Score as the company looks forward to FY22.   • FORECASTS/REVISIONS - 30th MARCH •FORECASTS/REVISIONS - Of the 18 annual forecasts and revisions, only half scored positively. The DETAIL Section below focuses on Nishimatsuya Chain (7545 JP) and AEON Mall (8905 JP).

🇯🇵 JAPAN • Results & Revisions 03/​​​​​​​​​30 - AEON Mall & Nishimatsuya + Nomura

Japan

Nomura Holdings, Inc. is a holding company which manages financial operations for its subsidiaries.  As a group, the Company provides a variety of financial services such as dealing, brokerage, underwriting, and asset management. Nomura Securities Co., a registered member of the New York and London Stock Exchanges, has branches around the world.

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Nomura Holdings (8604 JP)

Japan Financials: Bottoming Out?

Japan Financials have suffered a long-term decline in exposure among active Global fund managers. However, there are signs that ownership levels...

Steven Holden

Banks on the Bitcoin Bandwagon: Cashing in Through Crypto Custody Services

Bitcoin holdings by issuers and investors is driving crypto custody demand. Big banks are stepping. A big opportunity, but some ESG investors might...

Kyle Rudden

Asian Brokers: A Competition Between Value and Growth

The Original looks into the current competitive landscape of the brokerage sectors in China, Japan, and Korea, with a view to developing a list of...

Alec Tseung

🇯🇵 JAPAN • Results & Revisions 03/30 - AEON Mall & Nishimatsuya + Nomura

RESULTS - Only one-quarter of Tuesday's results announcements scored positively. Of the larger caps, Samty (3244 JP) fell into the red for the...

Campbell Gunn

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52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Japan Financials: Bottoming Out?

Japan Financials have suffered a long-term decline in exposure among active Global fund managers. However, there are signs that ownership levels...

Steven Holden

COP26: An Overview of Investment Themes and Catalysts Related to COP26 Conference

COP26, the climate conference happening now, will impact global capital markets. Perhaps over the next two weeks, depending on headlines, but...

Kyle Rudden

Banks on the Bitcoin Bandwagon: Cashing in Through Crypto Custody Services

Bitcoin holdings by issuers and investors is driving crypto custody demand. Big banks are stepping. A big opportunity, but some ESG investors might...

Kyle Rudden

Asian Brokers: A Competition Between Value and Growth

The Original looks into the current competitive landscape of the brokerage sectors in China, Japan, and Korea, with a view to developing a list of...

Alec Tseung

🇯🇵 JAPAN • Results & Revisions 03/​​​​​​​​​30 - AEON Mall & Nishimatsuya + Nomura

RESULTS - Only one-quarter of Tuesday's results announcements scored positively. Of the larger caps, Samty (3244 JP) fell into the red for the...

Campbell Gunn

🇯🇵 JAPAN • Results & Revisions 03/30 - AEON Mall & Nishimatsuya + Nomura