In today’s top stories, metaverse funds see growing inflows, Ray Dalio’s Pure Alpha fund outperforms the market and analysts upgrade stocks Apollo Medical Holdings and FREYR Battery. Meanwhile, active management and electric vehicle stocks underperform.
Investors plough into metaverse funds
Metaverse funds are managing more than $2bn as the investment theme continues to expand. According to Morningstar research, 39 metaverse funds managed just over $2bn in assets as of July this year, compared with six funds managing $179m in August 2021. The growth has been helped by big names like Fidelity, Franklin Templeton and Legal & General launching metaverse ETFs in the past month.
Pure Alpha fund gains 25%
While it didn’t quite match the 32% gain for the first half of 2022, Bridgewater’s Pure Alpha fund is up 25% year-to-date, Ray Dalio told MarketWatch on Wednesday. The fund has significantly outperformed the annual returns of the S&P 500, which is down 20.5% as of 21 September. When asked if the US is likely to be heading into a recession, Dalio said “you’re starting to see all the classic early signs”.
Stock pickers failed in H1
While market volatility in the first six months of the year should have provided the ideal environment for stock pickers to identify opportunities, the majority of actively managed large and medium-cap equity funds were the worst performers and failed to capitalise on these conditions. These funds recorded a 96% underperformance rate in H1 according to S&P Indices Versus Active Funds.
Chinese EV stocks slump
It’s been a turbulent few days for electric vehicle makers, with Chinese EV stocks tumbling on Wednesday amid escalating geopolitical tensions. XPeng, NIO and Li Auto were all trading considerably lower when the market closed, with XPeng hitting a new 52-week low and falling as much as 11% over the day. XPeng’s announcement of its new G9 SUV failed to cheer markets on Thursday, with the stock closing 8.9% lower.
Wednesday’s winners and losers
The Fed’s decision brought US equity averages down on Wednesday, with notable winners and losers. Travel stocks were particularly beaten down, with American Airlines, Delta Airlines, Carnival and Royal Caribbean all trading lower. However, positive analyst ratings lent steam to the likes of Apollo Medical Holdings, which gained 7% over the day, and lithium-ion battery maker FREYR Battery, up 17%.
Uranium stocks glow brighter
The energy crisis has put uranium in the spotlight, boosting the share prices of Anglo Pacific [APF.L], Cameco [CCJ] and Yellow Cake [YCA.L] in recent weeks. Belgium and Germany have delayed phasing out nuclear plants and French power group EDF [EDF.PA] is under pressure to restart its nuclear reactors. The UK, meanwhile, believes that small modular reactors designed by Rolls-Royce [RR.L] will be a crucial part of its future energy mix.
Episode 134 — Inside Callum Thomas’ Topdown Charts analysis process
In this week’s episode of Opto Sessions, Callum Thomas — the founder of macro-research firm Topdown Charts, which oversees trillions of dollars for clients that consist of institutional investors and assets allocators — discusses why chart analysis is an important factor in investment research. He also breaks down the seasonality concept in markets and how he uses it in his research process.