Data from global fund research firm Copley fund research showed that as of the end of February, the A-share positions of global emerging market funds had quietly reached a new high. This shows that China is still attractive to emerging market funds in 2022. At the same time, the data also showed that the interest of overseas funds in zhonggai Internet company rebounded. However, under the high volatility market, the position of hedging positions is also increasing.
Copley fund research is the founder and CEO of a fund research institution in the United States. Steven Holden worked in investment banking for 18 years before founding Copley fund research, and worked in institutions such as Morgan Stanley and Citigroup.
According to the data from Copley fund research, as of the end of February 2022, the A-share positions of actively managed funds in global emerging markets had increased significantly. Reflected in two aspects: first, for emerging market funds with a shares, the proportion of A-Shares in fund assets rose to a record high of 5.6%, while the proportion of funds with A-Shares in the total number of emerging market active funds also rose to a record high of 87.8%. In addition, more than half of the emerging market active funds are in a state of over allocation to a shares, that is, the proportion of A-share assets in the total assets of these funds is higher than the benchmark.
Some small partners will ask: Why are only 5.6% of the assets of these funds invested in a shares. Because the proportion of A-Shares in the benchmark of these funds is still very low, the proportion of A-Shares of funds is not high. However, vertically, the fund’s allocation of A-Shares has been significantly improved.
The following four pictures are provided by Steven holden to the fund.
The first figure represents the proportion of A-Shares allocated in emerging market active funds, which has risen to a new high.
The second chart shows the number of A-share funds invested in all emerging market funds, which also rose to a new high.
The third picture shows the comparison between the average proportion of A-Shares in emerging market active funds and MSCI Emerging Market Index (EEM is the ETF tracking MSCI Emerging Market Index). The proportion of A-Shares in emerging market active funds is 0.38 percentage points higher than that of EEM.
The fourth chart shows that 53.25% of emerging market active funds have oversubscribed A shares.
Source: provided by Steven Holden
Are these data convincing?
In order to answer this question, fund Jun consulted Steven Holden.
fund Jun: are these conclusions representative enough
The total fund size of our emerging markets is $5000. It is hard to say what proportion of all emerging market funds these funds account for. But we cover all large emerging market funds registered in the United States, the United Kingdom and other European countries.
fund Jun: what are the changes in emerging market fund A-share investment compared with a year ago
steven Holden: by the end of February 2022, the proportion of A-Shares allocated to emerging market funds in fund assets had risen to a record high of 5.6%, and the proportion of funds allocated to A-Shares in the total number of emerging market funds had also risen to a record high of 87.8%. A year ago, funds with A-Shares were allocated in emerging market funds. The proportion of A-Shares in fund assets was 4.67%, and 85% of emerging market fund positions included a shares. It can be seen that the number of funds investing in A-Shares in emerging market funds has increased in the past year, and the position of A-Shares in these funds has also increased.
steven Holden: last year, the allocation of A-Shares by emerging market active management funds increased significantly. For example, since 2008, the total amount of funds flowing into A-Shares by emerging market active funds has been US $14 billion, but US $5 billion has flowed in the past year.
steven Holden: if we broaden our horizons to more funds, including global market funds (whose investment scope is the global market), Asian (excluding Japan) market funds and actively managed Chinese funds, US $67 billion of these funds have gone to A-Shares in the past five years, most of which have gone to A-share funds (overseas issued A-share funds).
Steven Holden believes that from the end of August 2021 to the end of February 2022, the capital will turn to a shares. During the period, the average position of A-Shares of emerging active funds increased by 0.84 percentage points; 2.44% of emerging market active funds newly bought a shares; The fund with over allocation of A-Shares increased by 4.07 percentage points.
“ningwang” is the most popular
According to the data from Copley fund research, “ningwang” Contemporary Amperex Technology Co.Limited(300750) is the most popular stock among emerging market active funds, followed by Midea Group Co.Ltd(000333) , Longi Green Energy Technology Co.Ltd(601012) . In terms of the number of active funds held in emerging markets alone, “ningwang” completely defeated “maowang”. However, if considering the amount allocated to the stock, “maowang” still wins.
According to the data of Copley fund research
This may be related to the market value of Maotai.
Of the 15 stocks most invested in emerging markets, two were underpriced. In other words, although the number of funds bought is quite large, compared with the benchmark, the amount of each fund is still small. The two stocks with low allocation are Kweichow Moutai Co.Ltd(600519) and Ping An Insurance (Group) Company Of China Ltd(601318) .
What stocks have emerging market active funds been adding positions in the past six months?
Source: Copley fund research
According to the data, from the end of August 2021 to the end of February 2022, Contemporary Amperex Technology Co.Limited(300750) , Inner Mongolia Yili Industrial Group Co.Ltd(600887) , Ecovacs Robotics Co.Ltd(603486) , Sungrow Power Supply Co.Ltd(300274) , Yunnan Energy New Material Co.Ltd(002812) , Guangzhou Tinci Materials Technology Co.Ltd(002709) , were built by the most new funds Weichai Power Co.Ltd(000338) , C&S Paper Co.Ltd(002511) , Zoomlion Heavy Industry Science And Technology Co.Ltd(000157) , Kweichow Moutai Co.Ltd(600519) , Sany Heavy Industry Co.Ltd(600031) , Ping An Insurance (Group) Company Of China Ltd(601318) , Gree Electric Appliances Inc.Of Zhuhai(000651) were withdrawn by the most funds.
The above data show that although the situation in Russia and Ukraine began to deteriorate in late February, emerging market funds did not withdraw from a shares.
capital flows back to overseas China concept Internet ETF
Kweb, the second largest Chinese ETF listed in the United States and tracking China’s Internet Index, received a return of funds this week, which has attracted a net inflow of $120 million. The ETF is the latest $5 billion 890 million, and the fund includes Alibaba, Tencent, Jingdong, Baidu, US group, Kwai Fu, NetEase, spotlight, Ctrip, and many other Internet giants.
However, it is worth noting that despite the increase in net capital inflow, kweb’s short position is also increasing significantly. For example, short squeeze, a website that tracks short positions, showed that as of March 25, kweb’s short positions were 13.27 million shares, up 57% from the previous day.
Source: short squeeze
On the one hand, there is a significant net inflow of funds, and on the other hand, there is a great increase in short interest. This shows that although the funds are more interested in kweb Zhongyu Internet, they also believe that kweb will still face fluctuations in the future, so many institutions also use hedging to protect their positions.
value investors Nuggets China
As of March 25, the net outflow of funds from the North was 63.564 billion yuan.
Caitong Securities Co.Ltd(601108) Research Institute sorted out the net outflow of funds in the north for six times in history and found that the range of this net outflow is relatively large Caitong Securities Co.Ltd(601108) explained that the Fed raised interest rates, “Russia Ukraine conflict” and concerns about “stagflation”. Geopolitics is still a worry for overseas funds.
Daniel J. OKeefe, a fund manager led by the global value group of artisan partners, an American boutique investment agency, believes that Alibaba and other companies are too cheap at present. “It’s probably the cheapest company I’ve ever seen in the world with the same quality and financial quality,” he said. At present, the market has given it a sky high risk premium. This means that the market has fully priced the negative factors. Although Alibaba’s business is still affected by some cyclical factors, Alibaba’s business will come back with China and economic recovery.
Wang Lei, managing director and fund manager of Shangbo investment, also told reporters that the regulatory uncertainty most worried by overseas investors investing in these Internet companies has been eliminated to a large extent.
