Jun 30, 2016 - format and/or delivery method including without limitation email, ... World funds: U.K. : Weight over/und
Pointer Topical
June 30, 2016
Post-Brexit country allocation One of the advantages of our data is that we can infer the change in positioning on a daily basis. A week after the Brexit referendum shock, how did money managers tweak their country allocation? Before we look at the change in positioning, let’s see how equity benchmarks have moved since June 23. The U.K., despite being at the epicenter of the shock, had the smallest impact on its very large stocks. The FTSE 100, which is composed of multinationals that benefit from a weaker pound, is actually up 0.2% since then. The FTSE 250, which includes more domestic companies, pulled back 7.4% over the period. Equities in the European periphery were much more affected. Italian stocks are down 11.7% in less than a week.
European equity benchmarks total return since June 23 (%) 0.2
FTSE 100 -0.6
SWISS MKT -3.4
OMX STKH30 -5.9
CAC 40
-6.5
DAX -7.4
FTSE 250 -8.6
IBEX 35 FTSE MIB
-11.6 -12
-10
LuxArbor Institutional Positioning
-8
-6
-4
-2
0
WOL-MK-00005-20160630-1
At the time of the referendum, global fund managers had market weighting in U.K. stocks. Since then, fund managers, on average, have reduced their exposure to an underweight position of 0.6 percentage point. Top-quartile managers (over the past three months), had a more drastic reduction in exposure. They now underweight U.K. stocks by 1.9 percentage point, which is similar to where they were when the referendum was first announced in February. In other words, uncertainty is still present and it is a deterrent to institutional managers.
1
Pointer Topical
June 30, 2016 Developed World funds: U.K. : Weight over/under Developed World benchmark Average of funds vs. top quartile Percentage points Funds ov erweight v s. World benchmark 0.0 -0.5
-0.6
-1.0
Ref erendum ►
-1.5 Top quartile Average of funds
-2.0 2016
Feb
Funds underweight v s. World benchmark Mar
Apr
May
LuxArbor Institutional Positioning (Data as of Jun 29, 2016)
Jun
-1.9
WOL-GB-00002
Elsewhere in the broad European region, global fund managers have been actively reducing their allocation to France and Germany. Only two countries have seen their allocation increase: Ireland and Finland. Top-quartile funds: Change in European country allocation since June 23 (percentage points) Ireland Finland Norway Switzerland Denmark Portugal Austria Sweden Belgium Italy Spain Netherlands Germany France U.K.
-2.2
-1.9 -2.0
-1.4
-1.5
LuxArbor Institutional Positioning
-0.7 -0.8 -0.8
-1.0
-0.5
-0.1 -0.1 -0.1 -0.2 -0.2 -0.3
-0.5
0.8
0.1
0.0
0.5
1.0
WOL-CT -00002-20160630
Disclaimer No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of LuxArbor. LuxArbor is the sole owner of all intellectual property rights in this report. All rights are reserved. It is expressly prohibited to use the data, content, information and materials herein and any information provided by LuxArbor in any format and/or delivery method including without limitation email, facsimile, journalistic content for any purpose, including creating any derived data. It is prohibited to distribute, transfer, sub-license, transmit, sell, repackage, lease, resell, publish or otherwise making available all or any portion of the content herein, or any derived data, analysis or presentation based on such content, by whatever means to any person or entity. Any unauthorized use of any content appearing herein may violate the intellectual property rights of LuxArbor under any intellectual property laws such as copyright laws, trademark laws, regulations and statutes and is strictly prohibited. The information contained on this document is not intended to provide specific investment, financial, tax or legal advice.
2
