276 ACTIVE UK FUNDS, AUM $161BN
The Vodafone Exodus
In over a decades worth of holdings data for UK active funds, ownership in Vodafone has never looked so bad. Sentiment is at rock bottom, with the number of funds holding a position at all-time lows and an increasing number of funds deciding to throw in the towel.
Time Series Analysis & Stock Holdings
The appetite for UK investors to include Vodafone in their portfolio is dwindling. Once owned by over 80% of UK managers a decade ago, just 40.6% of the UK funds in our analysis now own a position, the lowest level on record (ch3). Average fund weights have fallen to a record low of 0.78%, representing an underweight versus the FTSE All Share ETF of -0.38%.
The charts below show the percentage of UK funds in each style group who hold a position in Vodafone (top chart) and the trends over time (bottom chart). The decline in Vodafone exposure has been driven by a massive reduction in positioning among Growth and Aggressive Growth managers. Yet even among Value, Yield and GARP funds ownership levels are close to their lowest levels on record.
Fund Holding Changes
The below charts look at the changes in Vodafone ownership over the last 6-months. The balance of fund activity is skewed to the sell-side and led by the GARP and Yield style groups, with 7.5% and 6.98% of managers closing exposure over the period, respectively. UK strategies from Invesco, Merian, Majedie, Jupiter and Quilter all closed Vodafone positions between 04/30/2022 and 10/31/2022.
Compared to other stocks in the UK investible universe, Vodafone has been among the worst in terms of ownership declines over the last 6-months. In terms of outright ownership changes in chart 2, Vodafone is the worst if we strip out stock delistings, and the fall in average weight of -0.18% is the 4th largest in the UK. This is an active rotation.
Conclusions
Despite this heavy selling, Vodafone remains a well held name, the 25th most widely held stock in the UK as per the chart opposite. There is certainly scope for further selling among active UK managers, and unless something drastically changes to make Vodafone more attractive to UK investors, this feels like the path of least resistance.
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