Canopy Investor Meta Data Analysis

Investors still long Internet Stocks

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Singapore, Nov 24 2020

Welcome to Canopy’s Investor Behavior Newsletter (Week 48 of 2020), where we analyze trends seen in our investment reporting activity.

The chart above shows the percentage allocation to each industry sector within each investor’s equity portfolio. (Please see last week’s update to see how the allocation between equity and fixed income changed this year)

Financials started the year as the favourite and remained the highest industry sector allocation during all of 2020. However, it’s allocation has steadily deflated since March with the Technology sector being the main beneficiary.

That said, the headline story for this issue of the newsletter is the steady increase in allocation of Communication stocks (we use GICS classifications and this includes all Internet, Telecommunication and Media stocks) since end September. This increase coincided with the sharp increase of Covid cases in the US (and eventually Europe). This would imply that investors expected more and more people to work from home.

As was widely expected, there was a sell-off in Communication stocks on the day the first vaccine (from Pfizer) was announced. However the sell-off did not gain wider popularity and allocations continued to be high and have even retraced slightly.

The interesting side story here is that the stimulus-talk linked increase in equity allocations before US elections (as mentioned in the previous newsletter) went almost entirely to the Technology sector (!!), instead of more traditional sectors like Manufacturing, Housing or even Healthcare (allocations to these sectors was too small to register properly on this chart).

This would imply that in the September-October period (before the vaccine was announced), investors expected most of the economy to remain a dud for some time to come.

In any case, investors pared Technology positions ahead of the US elections and these positions have not been affected much by the vaccine announcement.

Since the vaccine announcement, we have seen a small increase in allocation towards Consumer Cyclicals.

Please note that this newsletter is just a data analysis of actual investor behavior and does not constitute investment advice in any form.

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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

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