Daily Brief Thematic (Sector/Industry): UK Utilities Rotation and more

• Utilities have benefited from sector rotation among UK managers over the last year.  Typically an underweighted sector, managers are now overweight by 0.22% on average, the highest on record.
• Over the last year, average weights have increased by +0.55%, the percentage of funds with exposure by +1.18% and 7.85% of the UK funds in our analysis moved to overweight
• Nearly 2/3rds of allocations are in National Grid plc, SSE plc and Northumbrian Water, though UK managers are raising exposure to Centrica, Drax Group and United Utilities. 

In the next webinar, we have Smartkarma Analyst Kyle Rudden, who will be joined by the CEO of Helixtap, Farah Miller. They will run through the ESG landscape in agri commodities through a financial and data driven perspective. Through their discussion on the importance of data in planning ESG goals in supply chains, they will also highlight how Helixtap’s data and products can help companies meet their sustainability targets. 

The webinar will be hosted on Friday, 9 November 2022, 17:00 SGT/HKT.

Kyle Rudden is an ESG (Environmental, Social, Governance) analyst with an alpha-centric approach to ESG research. Previously, an Institutional Investor and Wall Street Journal All-Star sell-side analyst at J.P. Morgan, he believes global sustainability – i.e., environmental stewardship, social equality, and economic prosperity – is imperative, and private-sector capital is its cornerstone. Private-sector capital still has fiduciary responsibilities. Profitability is necessary for sustained impact. The Triple Bottom Line. People, Planet, AND Profit. You can expect his insights to be investigative research into emergent ESG issues; data-driven analyses of deals (pre-IPO ESG research, ESG-focused M&A consequence analyses, etc.); and trading-oriented ideas like ESG short selling and playing ESG index constituency changes. He brings both ESG expertise and traditional investing experience, as well as some rather unique perspectives on ESG (a lesson in governance from Enron, anyone?). Kyle has spent the last decade exclusively on ESG, researching links to equity returns, credit ratings, cost of capital, and yield spreads. He also contributed to ESG reporting standards (SASB and GRI), and the MBA curriculum (Impact Investing) at the Kellogg School of Management.

• An interesting dynamic has emerged over the past few months with mega cap technology companies like Meta, Alphabet, and Amazon all seeing considerable weakness while other pockets of the market have emerged to move higher.
• The market has recently “shaken off” some pretty bad earnings reports from mega cap tech while other pockets of the market continue to see breakouts which is a notable character change from the past few years.
• After seeing mega cap technology earnings results from this past week, some have questioned whether a new crop of market leadership is ready to take over the mantle from the big cap technology companies.