Consumer Discretionary
Fund ownership in the stock continues to fall - average weights slip to 4-year low as managers close out en masse. Between Feb and Oct this year, there were 56 closures (vs. 6 openings), led by growth funds. Ignore the corporate action related declines in Housing Development Finance Corp - the JD.com decline is head and shoulders above all stocks in the EM investible universe over the period. The departure of numerous key investors, paired with the still sizeable base of remaining investors (JD.com is the 16th most widely held stock globally), heightens the risk of an additional sell-off, casting a shadow on any potential share price recovery in the near term.
GEM Funds Investor Positioning Insights: India maximum divergence
Stephen Holden’s data highlights the growing divide between Value and Aggressive Growth managers in India - while Aggressive Growth investors double down, especially in Financials and Tech, Value managers are finding fewer opportunities to invest, and appear comfortable allowing their underweights to increase. That’s not to say there are no Value opportunities in India, just not enough to match either the benchmark weight, or the weight of their Growth peers. As the world focuses on a potential Growth to Value switch, in EM at least, India will be a key driver of relative performance between the two sets of investors.
Stocks highlighted include HDFC Bank, Housing Development Finance, Indian Oil Corp, Infosys and Tata Consultancy.
