Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Steven Holden is the CEO and Founder of Copley Fund Research, an independent provider of research on equity fund positioning and performance.  Set up in 2014, Copley focuses on global, global emerging market, US, Asia Ex-Japan and China active equity funds, covering over $4tr in assets across 1300 active managers.  The company provides data and analysis on market trends, manager exposures and active fund performance to an audience of investment managers, pension funds and fund selectors worldwide.  Mr Holden’s 14-year investment banking career started in 2000, where he worked for Morgan Stanley as an equity derivative trader focused on emerging markets in London.  Following this, he spent 4 years at Citibank in London and Hong Kong as an Executive Director in derivative sales, focused again on emerging markets.

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

Multiple Countries / Cross Asset Strategy

<ul>
<li>The nature of the COVID-19 induced sell-off has favoured Aggressive Growth strategies over Value this year.</li>
<li>During this period, the divergence in sector allocations between the two style groups has reached all-time wides. </li>
<li>The largest differences in sector allocations are in Consumer Staples and Discretionary, where Aggressive Growth funds are more heavily invested.  Value investors are more exposed to Energy, Materials and Utilities.</li>
<li>On a country level, China is the prominent weight for both style groups, though Aggressive Growth funds hold 5.36% more, on average. The largest difference is in India, where Aggressive Growth funds rank it as their 2nd largest country exposure at 12.26%, compared to the 5th highest in Value funds at 5.83%.</li>
<li>On a stock level, there are some striking differences in allocations.  For example, 72% of Aggressive Growth funds own <a href="https://www.smartkarma.com/entities/hdfc-bank-ltd-4b6b7a92-9087-468d-9dbe-ab169e77f014" target="_blank" data-smartkarma-citation="entities:558:1" rel="noopener">HDFC Bank (HDFCB IN)</a> versus only 10% of Value funds. Conversely, 69% of Value funds hold <a href="https://www.smartkarma.com/entities/china-construction-bank-corp" target="_blank" data-smartkarma-citation="entities:24567:1" rel="noopener">China Construction Bank (601939 CH)</a>  compared to just 7% of Aggressive Growth funds.</li>
</ul><p><em>The analysis is taken from our Global Emerging Market research, which covers 222 GEM active strategies with combined AUM of $360bn</em></p>


The nature of the COVID-19 induced sell-off has favoured Aggressive Growth strategies over Value this year.
During this period, the divergence in sector allocations between the two style groups has reached all-time wides. 
The largest differences in sector allocations are in Consumer Staples and Discretionary, where Aggressive Growth funds are more heavily invested.  Value investors are more exposed to Energy, Materials and Utilities.
On a country level, China is the prominent weight for both style groups, though Aggressive Growth funds hold 5.36% more, on average. The largest difference is in India, where Aggressive Growth funds rank it as their 2nd largest country exposure at 12.26%, compared to the 5th highest in Value funds at 5.83%.
On a stock level, there are some striking differences in allocations.  For example, 72% of Aggressive Growth funds own HDFC Bank (HDFCB IN) versus only 10% of Value funds. Conversely, 69% of Value funds hold China Construction Bank (601939 CH)  compared to just 7% of Aggressive Growth funds.
The analysis is taken from our Global Emerging Market research, which covers 222 GEM active strategies with combined AUM of $360bn

Grupo Financiero Banorte SAB d (GFNORTEO MF)

EM Growth Vs Value: Maximum Divergence