18 October Global Insights

Record Exposure as North American Rotation Continues

358 ACTIVE GLOBAL FUNDS, AUM $930BN

North American Rotation

Active Global investors are at record allocations in North American stocks. Driven higher by rising Health Care, Industrials and Energy exposure, North America continues to take market share from the key regions in Europe and Asia. Yet with Global investors still underweight North America, does this rotation have further to run?

Time-Series & Stock Holdings

North American allocations continue to trend higher, hitting a record average weight of 58.1% across the 358 global funds in our analysis last month. North America has consistently stolen market share from other key global regions, most notably Developed Market Europe, where average fund weights have hit all-time lows of 24.24%. Both EM and DM Asia have also seen average holding weights drift towards their lowest levels in over 5-years.
The most widely held North American stocks are Microsoft Corporation and the combined Alphabet Class A & C listings, held by 75.1% and 66.5% of funds respectively. Apple remains a sizeable underweight compared to benchmark, with average weights of 1.51% nearly 3% shy of the ACWI benchmark weight. High conviction positions are led by Mundoval Fund in Apple (13.06%) and Longleaf Partners in Lumen Technologies (11.85%).

Fund Holding & Style Analysis

On a fund level, the spread of allocations is surprisingly narrow considering the high absolute weight. 50% of managers sit between the lower quartile of 52% and upper quartile of 66.7%, with only 24 managers allocating less than 40% to the North American region.
The top holders are spread across the Style spectrum, led by Aviva Global Equity Endurance (85.85%) and Guinness Atkinson Global Innovators (84.73%). On average though, allocations are largely correlated to Style, with Growth and Aggressive Growth funds more exposed to North America than Value/Yield.

In the full analysis, we dig deep in to the make up of active fund allocations in the region.  We explore sector trends, style trends and highlight the stocks that are driving allocations higher.  We also include detailed stock profiles for the key holdings in North America, and a link to our 115 page active fund positioning report for Global funds.

If you are a fund manager or a finance professional and would like to read the full report, please fill in the form opposite.