Jefferies cuts India, China market weights in Asia Pacific ex-Japan relative-return portfolio

Jefferies in its latest GREED & fear note said it has cut the weightages of India and China by one percentage point each in its Asia Pacific ex-Japan relative-return portfolio at the end of June quarter, in the context of the pending publication of the Asia Maxima quarterly. 

The weighting in Korea was increased by two percentage points, it said. India's weightage now stands at 20 per cent against MSCI AC Asia Pacific ex-Japan's 17.5 per cent. China's weight has been reduced to 30 per cent against MSCI's 27.5 per cent. 

Jefferies said its India long-only equity portfolio, launched on 1 July 2021, rose by 13.1 per cent in dollar terms last quarter on a total-return basis, compared with a 9.7 per cent increase in the MSCI India benchmark. 

"But it is still an underperformer year to date, rising by 4.9 per cent compared with a 6.5 per cent increase in the benchmark. The portfolio is also still an outperformer since inception rising by 96.1 per cent compared with a 51.9 per cent increase in the MSCI India Index and a 48.4 per cent gain in the Nifty," it said.

Jefferies Asia ex-Japan thematic portfolio rose by 7.3 per cent last quarter on a total-return basis, compared with a 12.7 per cent gain in the MSCI AC Asia ex-Japan Index. As a result, it is now an underperformer year to date, rising by 10 per cent compared with a 14.8 per cent gain in the benchmark.

"The portfolio suffered last quarter from its lack of exposure to Korea, the region’s star performer. The portfolio is currently 40 per cent invested in India and 33 per cent invested in China. There is another 8 r cent allocated to Taiwan technology, though down from 14 per cent at the end of last year. The portfolio’s Indian stocks rose by an average of
12.8 per cent in US dollar terms last quarter, while the portfolio’s Chinese stocks declined by an average of 3.5 per cent," Jefferies said.

The stated performance of the absolute-return portfolio is on a total-return basis, Jefferies said.