21 September GEM Insights

EMEA Focus: Allocations Hit All-Time Lows

275 ACTIVE GEM FUNDS, AUM $370BN

EMEA Focus: Allocations Hit All-Time Lows

In this piece, we provide a comprehensive analysis of EMEA country positioning among active GEM equity funds. After the demise of Russia, active EM managers are positioned at their lowest ever levels in the EMEA region, moving from a multi-year overweight to a key underweight in little over 12 months. On a country level, we find a clear rotation out of CE3, Turkey and of course, Russia towards the MENA regions and to a lesser extent, South Africa and Greece.

EMEA Holdings Summary

The 14 charts in the dashboard below capture the various ownership metrics for investment in the EMEA region among active EM funds. Charts 1-3 show the distribution of EMEA portfolio weights and the average weight split by style. It shows the peak of the distribution around 9% with a reasonably long tail to the upside. The Style split clearly favours the Value end of the spectrum, with average Value fund weights of 11.8% backed up by outsized positions from Redwheel Next Generation EM Equity (37.8%) and Orbis Emerging Markets Equity (26.9%).
The time-series of average weights (ch4) shows EMEA allocations at their lowest ever levels, with a corresponding fall in the relative weight (ch5) as more funds move to underweight (ch7). The 4 most widely held stocks are in South Africa (ch11) whereas all of the top underweights are in the MENA region (ch13). Activity over the last 6-months shows increased holdings in a host of MENA stocks, led by National Commercial Bank and Saudi Aramco, whilst Russian equities bore the brunt of the selling (ch14).

In the full analysis, we provide profiles for all of the key countries in the EMEA region, together with links to a suite of PDF reports that contain further data and analysis on active EM fund positioning.  

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