In the latest Greed and Fear report, Chris Wood of Jefferies revealed adjustments to the Asia Pacific ex-Japan relative-return portfolio made at the end of the last quarter. These changes in the new Asia Maxima were driven by significant shifts in the neutral weightage.
The report noted that India's weightage was increased by 1.5 percentage points to maintain a slight Overweight position. Meanwhile, the weightage for China and Hong Kong were reduced by one percentage point and 0.5 percentage points, respectively.
The start of a new quarter marks a suitable time to review the performance of all Greed and Fear's long-only portfolios, as noted in the report. Importantly, none of these portfolios can hold cash.
Overall, the Asia ex-Japan long-only portfolio has risen by 3,615 percent on a total-return basis in US-dollar terms since its inception at the end of Q3FY02 till the end of June quarter, highlighted the report. This compares with a 615 percent increase in the MSCI AC Asia ex-Japan Index and a 924 percent increase in the S&P 500. This performance translates to an annualised return of 18.1 percent for the portfolio, versus 9.5 percent for the MSCI AC Asia ex-Japan Index and 11.3 percent for the S&P 500, further noted the Greed and Fear report.
Meanwhile, just in the June quarter, Greed and Fear's Asia ex-Japan long-only portfolio surged by 8.7 percent in total-return terms, outpacing the 7.3 percent rise in the MSCI AC Asia ex-Japan Index. It is also an outperformer year to date rising by 18.7 percent. The portfolio remains 49 percent invested in India, with 10 percent exposure to China and another 17 percent allocated to Taiwan and Korean technology. There is also a 13 percent allocation to Indonesian banks. The portfolio reflects its strategic focus on Asia's domestic growth opportunities and remains primarily geared to the long-term domestic demand story in India.
As per the Greed and Fear report, the India long-only portfolio, launched in July 2021, reported a robust 16 percent increase in US dollar terms last quarter, outpacing the MSCI India benchmark's 10.4 percent gain. Year-to-date, it surged by 31.6 percent compared to the benchmark's 17.1 percent rise, underscoring its strong performance since inception with a 98.5 percent increase versus a 48.6 percent increase in the MSCI India Index and a 41.9 percent gain in the Nifty, noted the report.
In comparison, the Japan long-only thematic portfolio, introduced in March 2005, reported a 4.9 percent rise in yen terms last quarter, said the report. In US dollar terms, it experienced a marginal decline of 1.3 percent. Despite this, the portfolio has shown resilience, posting a 14.2 percent increase year-to-date.
Moreover, since its inception in September 2020, the China long-only portfolio recorded an 8.5 percent increase in US dollar terms last quarter, outperforming both the MSCI China Index (7.2 percent rise) and the CSI 300 Index (1.5 percent decline). Year-to-date, it continued its outperformance with a 9.7 percent.
In a broader context, the report stated that the global long-only equity portfolio, initiated in January 2023, initially faced challenges but has since rebounded. It began with significant exposure to Asia Pacific, including a 26 percent allocation to India, and has grown by 41.9 percent in US dollar terms since its inception. Last quarter, it rose by 6.9 percent and year-to-date, it increased by 24.3 percent versus an 11.6 percent gain in MSCI World, demonstrating consistent outperformance over the past five quarters.
These portfolios reflect strategic allocations and performance trends in regional and global equity markets, highlighting growth opportunities in specific sectors and regions amidst evolving market dynamics, as reported by Greed and Fear.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
