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>Q1 Performance Analysis for active Global EM funds.  Country/Sector/Stock Positioning relative to benchmark for Global funds</li>
<li>Spotlight on Indonesia activity among Asia Ex-Japan investors.  Sector Dispersion in USA funds</li>
<li>Extreme Stock Positioning in UK Small/Midcap funds. Ownership Trends in the Financials sector among MSCI China funds.</li>
</ul>


Q1 Performance Analysis for active Global EM funds.  Country/Sector/Stock Positioning relative to benchmark for Global funds
Spotlight on Indonesia activity among Asia Ex-Japan investors.  Sector Dispersion in USA funds
Extreme Stock Positioning in UK Small/Midcap funds. Ownership Trends in the Financials sector among MSCI China funds.


<ul>
<li>This report identifies stocks at the extremes of their positioning or momentum ranges within our active Global EM fund universe.</li>
<li>We have pinpointed eight stocks either at their historical positioning extremes or undergoing significant changes in fund ownership, providing detailed ownership profiles for each.</li>
<li>HDFC Bank loses steam after merger, Nu Holdings surges to new highs, POSCO plunges to new fund ownership lows.</li>
</ul>


This report identifies stocks at the extremes of their positioning or momentum ranges within our active Global EM fund universe.
We have pinpointed eight stocks either at their historical positioning extremes or undergoing significant changes in fund ownership, providing detailed ownership profiles for each.
HDFC Bank loses steam after merger, Nu Holdings surges to new highs, POSCO plunges to new fund ownership lows.


Active GEM Funds:  Extremes in Positioning & Momentum

<ul>
<li>Strong start to 2024, but majority underperform: Average returns of 7.6% lags the SPDRs MSCI ACWI ETF by -0.33%, with 44% of funds outperforming.</li>
<li>USA Technology Drives Returns: US Tech sector accounts for 1/4 of total returns in Q1. China &amp; India Financials a drag on performance.</li>
<li>Apple and Tesla Positions Outperform: Underweights in both stocks help claw back losses made due to NVIDIA underweights.</li>
</ul>


Strong start to 2024, but majority underperform: Average returns of 7.6% lags the SPDRs MSCI ACWI ETF by -0.33%, with 44% of funds outperforming.
USA Technology Drives Returns: US Tech sector accounts for 1/4 of total returns in Q1. China &amp; India Financials a drag on performance.
Apple and Tesla Positions Outperform: Underweights in both stocks help claw back losses made due to NVIDIA underweights.


Global Funds Q1 Review: Benefiting from Underweights in Apple & Tesla

<ul>
<li>Strong start to 2024 as majority of GEM funds outperform: Average returns of 2.8% beat the iShares MSCI EM ETF by 0.66%, with 63% of funds outperforming.</li>
<li>Technology Sector Drives Returns: Technology sector the key contributor to returns, with TSMC accounting for just over half of total fund returns on the quarter.</li>
<li>Active vs Passive: Q1 performance adds to GEM active fund's impressive record of outperformance. 5-year average GEM fund returns are +7.4% ahead of the benchmark iShares MSCI EM ETF.</li>
</ul>


Strong start to 2024 as majority of GEM funds outperform: Average returns of 2.8% beat the iShares MSCI EM ETF by 0.66%, with 63% of funds outperforming.
Technology Sector Drives Returns: Technology sector the key contributor to returns, with TSMC accounting for just over half of total fund returns on the quarter.
Active vs Passive: Q1 performance adds to GEM active fund's impressive record of outperformance. 5-year average GEM fund returns are +7.4% ahead of the benchmark iShares MSCI EM ETF.


GEM Funds Outperform in Q1.  Long-Term Active Vs Passive Performance Compelling.

<ul>
<li>Strong start to 2024 as majority outperform: Average returns of 3.3% beat the iShares Asia Ex-Japan benchmark, with 66% of funds outperforming.</li>
<li>Technology Sector Drives Returns:  Taiwan and South Korean Tech contribute the most to returns, whilst China Financials and Healthcare drag on performance.</li>
<li>HDFC Bank and AIA Group costly: Both stocks are among the top overweights among Asia Ex-Japan investors.  Poor performance this quarter cost managers ~ 50bps in losses versus the benchmark.</li>
</ul>


Strong start to 2024 as majority outperform: Average returns of 3.3% beat the iShares Asia Ex-Japan benchmark, with 66% of funds outperforming.
Technology Sector Drives Returns:  Taiwan and South Korean Tech contribute the most to returns, whilst China Financials and Healthcare drag on performance.
HDFC Bank and AIA Group costly: Both stocks are among the top overweights among Asia Ex-Japan investors.  Poor performance this quarter cost managers ~ 50bps in losses versus the benchmark.


Asia Ex-Japan Q1 Performance & Attribution:  Strong Start for Active Managers

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.