Report by Copley Fund Research

With risk assets taking a turn for the worse it is surprising that a safe haven sector is so far out of favour (average fund weight is just 0.98%) - the record underweight has been driven in large part due to benchmark increases in stocks that active managers have ignored (Adani Green Energy, Adani Transmission and Adani Gas). However, one can’t ignore the record low participation levels, with just 41% of managers exposed to the sector. With Aggressive Growth investors all but abandoning Utilities and only 35% of Growth investors holding a position, if risk assets continue to deteriorate, some of that rotation away from the sector should start to reverse.