Currently (although this will soon change as our customer base expands) the vast majority of Canopy data comes from High Networth Individuals (HNIs). Fixed Income has been the primary asset class for this set of investors ever since we started almost 8 years ago. In fact the first time we did a meta data analysis, the fixed income allocation was 70% plus !!
That has changed. Fixed Income is no longer the asset class with the highest allocation. The chart below shows the split between Equities and Fixed Income since January 2020. …
Sometimes it is good to zoom out and look at the big picture. The chart below shows total amount of Equities and Equity Funds bought/sold by investors each month since May ’20. Some very interesting insights emerge
European stocks began 2021 on a weak note. Eurostoxx 50 was at the bottom of the performance pile amongst major stock indices for the month of January before changing gears. For the period starting January end to now, Eurostoxx 50 has accelerated ahead, even edging out STI, to come out on top.
The chart below shows relative performances of major indices for this time period. As you can see the index was initially following the pack and really hit overdrive around around end February ’21. Bulk of the move in the index is driven by ASML, LVMH, Linde, Daimler and…
The big news on Friday was large selling of shares by Morgan Stanley and Goldman Sachs. These banks sold a combined USD 20 billion of shares in Baidu, Tencent, Vipshop, Viacom, Discovery, Farfetch etc. By Sunday evening it had been confirmed that this selling is on the back of banks doing a forced liquidation of positions held by Archegos Capital.
Chinese Technology shares have been tending down over the last few weeks. Wells Fargo had earlier downgraded Viacom and Discovery on concerns that the stocks are overvalued. These two factors, combined with massive leverage, likely caused this meltdown.
STI Index shines during the Tech/China selloff
As discussed in last week’s newsletter most global equity indices seem to have caught the ‘Valentine’s Day bug’ and have had a miserable last 30 days of trading. This is especially true of Tech (NASDAQ) and China (CSI 300), although NASDAQ has since clawed back about half of its losses.
The STI Index on the other hand seems to have drunk some Brand’s Essence of Chicken :) There is new energy which has resulted in outperformance of its peer group by around 8% (see chart below)
March 8, 2021
If you remember Gamestop shares spiked between Jan 25–27. Robinhood and other brokers imposed temporary limits on buying the stock which led to a loud outcry from retail investors and was even discussed in the US Congress.
‘Gamestop Day’ seemed to have really spooked the overall markets, both equities and fixed income.
March 15, 2021
Tech Rally Fizzles, Small Caps rise
The rally in technology stocks had been the story of the last 12 months. Except for September and October, NASDAQ closed flat or higher each month during this period. However the pace of this rise slowed down in the new year, there was a sputter around ‘Gamestop’ day and finally a good 10%+ fall that started mid February. This ‘Valentine’s Day bug’ has also been caught by the CSI 300 which has seen a similar fall. …
March 2, 2021
The selling that had started in late January (see previous newsletters of 9th Feb 2021 and 15 Feb 2021) turned out to be a precursor to a fall in prices. CSI 300 started falling on 16 Feb and continued to do so this week. We are now more than 10% off the highs (I hope you did not get caught on the wrong foot on this one).
February 22, 2021
Alternatives made 3% on average
After Equities and Fixed Income, Alternatives form an important part of a lot of customer portfolios. The chart above plots the return and volatility of the Alternatives component of Canopy customer portfolios from June 2020 to date.
Some specific Alternative funds have had an awesome 2020. However on a customer portfolio level these bright sparks have tended to net off with some poorly performing funds and net returns are pretty much middle of the fairway. As you can see from the chart, the average absolute returns have been 3.0% (which annualizes to…
February 15, 2021
Presenting ‘2020 — The Movie’
The ‘movie’ below shows total returns (including dividends) made by investors since January 2020. The S&P 500 chart on top shows a rolling 3 month time-slice and the scatter plot below shows the returns/volatility of the Equities + Equity Fund components of investor portfolios during that same period.
The ‘opening scene’ of the movie is as expected. We had seen a sharp Covid related fall during Feb-Mar and every investor got caught on the wrong foot (average return of -27.5%). …
Tanmai is the CEO and Founder of Canopy, which is an investment reporting and analytics company. Here he analyses investment trends seen in Canopy's meta-data