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Approximately 85% of the assets in the Advisor Perspectives (AP) Universe are held in individual securities, mostly through investments in separately managed accounts (SMAs). The remaining 15% of assets are held in mutual funds. Our analysis of the individual equity holdings in the AP Universe, as of June 30, 2007, reveals the following:
- Within US equities, the Financial sector (9.0%) and the Consumer Staples sector (2.2%) are over-weighted, as compared to the weightings in the S&P 500 index, and all other sectors are underweighted. Most notably, the Information Technology sector is underweighted by 3.3% and the Energy sector is underweighted by 2.6%. Sector weightings in the Largest Accounts (those with an average account size of $3.7 million) mirror the weightings in the AP universe, since approximately 94% of the assets in the AP universe are held in the Largest Accounts.
- US equities in the AP universe (as well as in the Largest Accounts) have a weighted average beta of 1.01 and a weighted average P/E of 22.6 (as compared to the P/E of approximately 18 in the S&P 500).
- The above parameters indicate a value bias among the SMA managers of the Largest Accounts in the AP universe. Of the top 25 holdings in the AP Universe, only 10 are growth stocks. Asset allocation data for the AP Universe (which includes mutual funds) shows that approximately 50% of the assets are in blended securities, so the more detailed analysis provided here reveals that these blended securities are actually more biased toward value than growth, and that mutual funds are more biased toward growth than value.
- Within non-US equities, our comparison to the EFA index (as of June 30, 2007) for the AP Universe and the Largest Accounts shows significant differences. Investments in Asia (excluding Japan) are over-weighted by 36.7%, and the UK/Western Europe region is underweighted by 27.7% and Japan is underweighted by 14.8%. Our previous analysis showed that the Largest Accounts rely on mutual funds and ETFs extensively for non-US investments (approximately 56% of the non-US assets in the AP universe are held in mutual funds, as opposed to individual securities). Thus, it is not surprising that investments in individual securities do not mirror the EFA index, and instead are directed to specific regions, countries, and securities, where managers see opportunities not reflected in broader indices such as EFA.
- Country exposure is similarly unaligned with the EFA index, with all major countries (UK, Japan, France, Germany, and Switzerland) underweighted in the AP universe. Israel, which is not among the top 5 in the EFA index, accounts for 38.3% of the exposure in the Largest Accounts and in the AP Universe, mostly through the holdings in Teva Pharmaceuticals (TEVA). Teva is the second most widely held security in the AP Universe.
The AP Universe reflects the investments of high- and ultra-high net worth investors, whose assets are managed by Registered Investment Advisors (RIAs). Approximately $50 billion of assets are represented, with an average account size of approximately $900 thousand. The AP Universe is segmented into three tiers, based on account size. The tier containing the Largest Accounts has an average account size of approximately $3.7 million. The Mid-Sized Accounts have an average account size of approximately $119 thousand and the Smallest Accounts have an average account size of approximately $15 thousand.
The four sections below show the data for individual equities in the AP Universe, the Largest Accounts, the Mid-Sized Accounts, and the Smallest Accounts. Within each section the following data is provided:
- Comparison to the S&P Index for US equities
- Weighted average beta for US equities (weighted by market value)
- Weighted average P/E for Us equities (weighted by market value)
- Comparison to the EFA index, by region, for non-US equities
- Comparison to the EFA index, by country, for non-US equities
- Top 25 holdings for both US and non-US equities
Section 1 – Full AP Universe
US Equities – Comparison to S&P 500 Index
|
AUM |
AP Universe |
S&P 500 |
Difference |
Consumer Discretionary |
$1,587,457,272 |
10.1% |
10.2% |
-0.1% |
Consumer Staples |
$1,821,384,819 |
11.6% |
9.3% |
2.2% |
Energy |
$1,266,411,848 |
8.0% |
10.6% |
-2.6% |
Financials |
$4,783,137,909 |
30.4% |
21.3% |
9.0% |
Health Care |
$1,792,539,914 |
11.4% |
11.8% |
-0.4% |
Industrials |
$1,538,174,866 |
9.8% |
11.3% |
-1.6% |
Information Technology |
$1,869,204,100 |
11.9% |
15.2% |
-3.3% |
Materials |
$454,553,651 |
2.9% |
3.1% |
-0.2% |
Telecommunication Services |
$277,846,461 |
1.8% |
3.7% |
-2.0% |
Unknown |
$22,797,896 |
0.1% |
|
0.1% |
Utilities |
$332,645,167 |
2.1% |
3.5% |
-1.4% |
|
$15,749,748,612 |
100.0% |
100.0% |
|
Wtd. Avg. Beta = 1.01
Wtd. Avg. P/E = 22.6
Non-US Equities – Comparison to EFA Index (AUM = $2,042,946,633)
|
AP Universe |
EFA |
|
Regional Exposure |
% of Assets |
% of Assets |
Difference |
UK/Western Europe |
42.5% |
70.2% |
-27.7% |
Japan |
6.4% |
21.2% |
-14.8% |
Latin America |
4.9% |
0.0% |
4.9% |
Asia ex-Japan |
45.1% |
8.4% |
36.7% |
Other |
1.0% |
0.2% |
0.8% |
|
100.0% |
100.0% |
|
|
AP Universe |
EFA |
|
Country Exposure |
% of Assets |
% of Assets |
Difference |
United Kingdom |
13.7% |
23.6% |
-9.9% |
Japan |
6.4% |
21.2% |
-14.8% |
France |
4.8% |
10.4% |
-5.6% |
Germany |
4.9% |
8.3% |
-3.4% |
Switzerland |
5.8% |
6.7% |
-0.9% |
Israel |
38.3% |
|
|
Netherlands |
5.6% |
|
|
Top 25 Holdings (US and non-US)
Ticker |
Description |
# Accounts |
AUM |
BAC |
BANK OF AMERICA CP |
1427 |
$1,725,112,221 |
TEVA |
TEVA PHARMACEUTICAL INDUSTRIES |
544 |
$770,523,132 |
EL |
ESTEE LAUDER |
71 |
$758,298,656 |
XOM |
EXXON MOBIL CP |
1505 |
$312,636,569 |
AIG |
AMERICAN INTERNATIONAL GROUP |
1586 |
$291,489,008 |
GE |
GENERAL ELECTRIC CO |
2251 |
$268,347,105 |
MRK |
MERCK & CO INC |
605 |
$209,234,949 |
MSFT |
MICROSOFT CORPORATION |
1974 |
$173,305,163 |
C |
CITIGROUP INC |
1912 |
$157,218,264 |
JNJ |
JOHNSON & JOHNSON INC |
1144 |
$150,297,584 |
LTS |
LADENBURG THALMANN FINANCIAL |
15 |
$135,602,291 |
CSCO |
CISCO SYSTEMS INC |
1692 |
$130,530,553 |
CVX |
CHEVRON CP |
844 |
$126,155,485 |
PG |
PROCTER & GAMBLE CO |
1385 |
$125,338,806 |
ORCL |
ORACLE CP |
662 |
$114,087,570 |
SGP |
SCHERING PLOUGH CP |
167 |
$113,162,942 |
KO |
COCA COLA CO |
742 |
$111,541,544 |
BEAS |
BEA SYSTEMS INC |
63 |
$106,057,988 |
INTC |
INTEL CP |
1194 |
$103,658,717 |
T |
AT&T INC |
1299 |
$101,166,219 |
PEP |
PEPSICO INC |
1427 |
$99,212,704 |
JPM |
JP MORGAN CHASE & CO |
1201 |
$93,868,089 |
MCD |
MCDONALDS CP |
691 |
$93,276,559 |
VGR |
VECTOR GROUP LTD |
34 |
$92,251,541 |
PFE |
PFIZER INC |
1164 |
$90,262,439 |
Section 2 – Largest Accounts
US Equities – Comparison to S&P 500 Index
|
AUM |
AP Universe |
S&P 500 |
Difference |
Consumer Discretionary |
$1,573,032,275 |
10.1% |
10.2% |
-0.1% |
Consumer Staples |
$1,812,614,656 |
11.6% |
9.3% |
2.3% |
Energy |
$1,257,307,849 |
8.0% |
10.6% |
-2.6% |
Financials |
$4,754,183,516 |
30.4% |
21.3% |
9.1% |
Health Care |
$1,769,327,910 |
11.3% |
11.8% |
-0.4% |
Industrials |
$1,524,484,195 |
9.8% |
11.3% |
-1.6% |
Information Technology |
$1,849,853,360 |
11.8% |
15.2% |
-3.3% |
Materials |
$451,263,374 |
2.9% |
3.1% |
-0.2% |
Telecommunication Services |
$274,515,933 |
1.8% |
3.7% |
-2.0% |
Unknown |
$20,564,137 |
0.1% |
|
0.1% |
Utilities |
$328,292,816 |
2.1% |
3.5% |
-1.4% |
|
$15,618,985,068 |
100.0% |
100.0% |
|
Wtd. Avg. Beta = 1.01
Wtd. Avg. P/E = 22.6
Non-US Equities – Comparison to EFA Index (AUM = $2,026,200,090)
|
AP Universe |
EFA |
|
Regional Exposure |
% of Assets |
% of Assets |
Difference |
UK/Western Europe |
42.4% |
70.2% |
-27.8% |
Japan |
6.4% |
21.2% |
-14.8% |
Latin America |
4.9% |
0.0% |
4.9% |
Asia ex-Japan |
45.3% |
8.4% |
36.9% |
Other |
0.9% |
0.2% |
0.7% |
|
100.0% |
100.0% |
|
|
AP Universe |
EFA |
|
Country Exposure |
% of Assets |
% of Assets |
Difference |
United Kingdom |
13.7% |
23.6% |
-9.9% |
Japan |
6.4% |
21.2% |
-14.8% |
France |
4.8% |
10.4% |
-5.6% |
Germany |
4.9% |
8.3% |
-3.4% |
Switzerland |
5.8% |
6.7% |
-0.9% |
Israel |
38.6% |
|
|
Netherlands |
5.6% |
|
|
Top 25 Holdings (US and non-US)
Ticker |
Description |
# Accounts |
AUM |
BAC |
BANK OF AMERICA CP |
1236 |
$1,723,587,088 |
TEVA |
TEVA PHARMACEUTICAL INDUSTRIES |
440 |
$770,043,468 |
EL |
ESTEE LAUDER |
60 |
$758,270,471 |
XOM |
EXXON MOBIL CP |
1276 |
$310,294,269 |
AIG |
AMERICAN INTERNATIONAL GROUP |
1356 |
$290,353,634 |
GE |
GENERAL ELECTRIC CO |
1690 |
$264,948,165 |
MRK |
MERCK & CO INC |
509 |
$208,306,995 |
MSFT |
MICROSOFT CORPORATION |
1668 |
$171,694,507 |
C |
CITIGROUP INC |
1606 |
$155,414,973 |
JNJ |
JOHNSON & JOHNSON INC |
994 |
$149,555,152 |
LTS |
LADENBURG THALMANN FINANCIAL |
10 |
$135,361,939 |
CSCO |
CISCO SYSTEMS INC |
1379 |
$128,972,314 |
CVX |
CHEVRON CP |
768 |
$125,786,868 |
PG |
PROCTER & GAMBLE CO |
1135 |
$123,788,628 |
ORCL |
ORACLE CP |
555 |
$113,540,285 |
SGP |
SCHERING PLOUGH CP |
153 |
$113,101,731 |
KO |
COCA COLA CO |
636 |
$110,747,349 |
BEAS |
BEA SYSTEMS INC |
59 |
$106,008,499 |
INTC |
INTEL CP |
1035 |
$102,610,659 |
T |
AT&T INC |
1137 |
$99,860,573 |
PEP |
PEPSICO INC |
1205 |
$98,221,791 |
JPM |
JP MORGAN CHASE & CO |
1065 |
$92,638,099 |
MCD |
MCDONALDS CP |
607 |
$92,630,135 |
VGR |
VECTOR GROUP LTD |
34 |
$92,251,541 |
GS |
GOLDMAN SACHS GROUP INC |
436 |
$89,548,690 |
Section 3 – Mid-sized Accounts
US Equities – Comparison to S&P 500 Index
|
AUM |
AP Universe |
S&P 500 |
Difference |
Consumer Discretionary |
$12,452,995 |
11.6% |
10.2% |
1.5% |
Consumer Staples |
$7,898,617 |
7.4% |
9.3% |
-1.9% |
Energy |
$7,842,560 |
7.3% |
10.6% |
-3.3% |
Financials |
$25,283,124 |
23.6% |
21.3% |
2.3% |
Health Care |
$13,357,719 |
12.5% |
11.8% |
0.7% |
Industrials |
$12,380,598 |
11.6% |
11.3% |
0.2% |
Information Technology |
$17,436,761 |
16.3% |
15.2% |
1.1% |
Materials |
$2,888,015 |
2.7% |
3.1% |
-0.4% |
Telecommunication Services |
$2,963,244 |
2.8% |
3.7% |
-1.0% |
Unknown |
$612,680 |
0.6% |
|
0.6% |
Utilities |
$3,923,385 |
3.7% |
3.5% |
0.2% |
|
$107,046,168 |
100.0% |
100.0% |
|
Wtd. Avg. Beta = 1.04
Wtd. Avg. P/E = 23.9
Non-US Equities – Comparison to EFA Index (AUM = $13,726,536)
|
AP Universe |
EFA |
|
Regional Exposure |
% of Assets |
% of Assets |
Difference |
UK/Western Europe |
60.9% |
70.2% |
-9.3% |
Japan |
11.1% |
21.2% |
-10.1% |
Latin America |
8.6% |
0.0% |
8.6% |
Asia ex-Japan |
17.9% |
8.4% |
9.5% |
Other |
1.5% |
0.2% |
1.3% |
|
100.0% |
100.0% |
|
|
AP Universe |
EFA |
|
Country Exposure |
% of Assets |
% of Assets |
Difference |
United Kingdom |
22.0% |
23.6% |
-1.6% |
Japan |
11.1% |
21.2% |
-10.1% |
France |
7.3% |
10.4% |
-3.1% |
Germany |
8.0% |
8.3% |
-0.3% |
Switzerland |
6.9% |
6.7% |
0.2% |
Netherlands |
5.6% |
|
|
Brazil |
4.9% |
|
|
Top 25 Holdings (US and non-US)
Ticker |
Description |
# Accounts |
AUM |
GE |
GENERAL ELECTRIC CO |
428 |
$2,903,533 |
XOM |
EXXON MOBIL CP |
204 |
$2,091,843 |
PFE |
PFIZER INC |
179 |
$1,897,083 |
C |
CITIGROUP INC |
268 |
$1,675,622 |
BAC |
BANK OF AMERICA CP |
178 |
$1,435,859 |
PG |
PROCTER & GAMBLE CO |
224 |
$1,415,396 |
MSFT |
MICROSOFT CORPORATION |
257 |
$1,393,529 |
CSCO |
CISCO SYSTEMS INC |
263 |
$1,359,752 |
JPM |
JP MORGAN CHASE & CO |
111 |
$1,158,537 |
T |
AT&T INC |
138 |
$1,143,361 |
AIG |
AMERICAN INTERNATIONAL GROUP |
221 |
$1,099,990 |
SLB |
SCHLUMBERGER LTD |
193 |
$1,049,299 |
SYK |
STRYKER CP |
139 |
$1,018,078 |
PEP |
PEPSICO INC |
207 |
$924,833 |
INTC |
INTEL CP |
121 |
$902,846 |
MRK |
MERCK & CO INC |
90 |
$898,274 |
WAG |
WALGREEN CO |
184 |
$850,689 |
IBM |
INTERNATIONAL BUSINESS MACHINE |
92 |
$834,062 |
TGT |
TARGET CP |
154 |
$769,439 |
BP |
BP PLC |
72 |
$764,098 |
MO |
ALTRIA GROUP INC |
92 |
$764,045 |
AMGN |
AMGEN INC |
186 |
$745,323 |
BRK B |
BERKSHIRE HATHAWAY INC CL B |
33 |
$742,240 |
AAPL |
APPLE INC |
97 |
$740,164 |
KO |
COCA COLA CO |
95 |
$732,074 |
Section 4 – Smallest Accounts
US Equities – Comparison to S&P 500 Index
|
AUM |
AP Universe |
S&P 500 |
Difference |
Consumer Discretionary |
$1,151,078 |
14.9% |
10.2% |
4.8% |
Consumer Staples |
$616,384 |
8.0% |
9.3% |
-1.3% |
Energy |
$690,037 |
9.0% |
10.6% |
-1.7% |
Financials |
$1,654,416 |
21.5% |
21.3% |
0.1% |
Health Care |
$594,169 |
7.7% |
11.8% |
-4.1% |
Industrials |
$829,267 |
10.8% |
11.3% |
-0.5% |
Information Technology |
$1,477,347 |
19.2% |
15.2% |
4.0% |
Materials |
$48,207 |
0.6% |
3.1% |
-2.4% |
Telecommunication Services |
$267,855 |
3.5% |
3.7% |
-0.3% |
Unknown |
$71,938 |
1.2% |
|
1.2% |
Utilities |
$277,620 |
3.6% |
3.5% |
0.1% |
|
$7,700,272 |
100.0% |
100.0% |
|
Wtd. Avg. Beta = .99
Wtd. Avg. P/E = 24.9
Non-US Equities – Comparison to EFA Index (AUM = $291,063)
|
AP Universe |
EFA |
|
Regional Exposure |
% of Assets |
% of Assets |
Difference |
UK/Western Europe |
73.5% |
70.2% |
3.3% |
Japan |
8.6% |
21.2% |
-12.6% |
Latin America |
0.5% |
0.0% |
0.5% |
Asia ex-Japan |
17.4% |
8.4% |
9.0% |
Other |
|
0.2% |
-0.2% |
|
100.0% |
100.0% |
|
|
AP Universe |
EFA |
|
Country Exposure |
% of Assets |
% of Assets |
Difference |
United Kingdom |
22.1% |
23.6% |
-1.5% |
Japan |
8.6% |
21.2% |
-12.6% |
France |
10.5% |
10.4% |
0.1% |
Germany |
17.9% |
8.3% |
9.6% |
Switzerland |
5.5% |
6.7% |
-1.2% |
Finland |
8.7% |
|
|
China |
6.8% |
|
|
Ireland |
6.1% |
|
|
Top 25 Holdings (US and non-US)
Ticker |
Description |
# Accounts |
AUM |
GE |
GENERAL ELECTRIC CO |
133 |
$495,407 |
XOM |
EXXON MOBIL CP |
25 |
$250,457 |
MSFT |
MICROSOFT CORPORATION |
49 |
$217,128 |
CSCO |
CISCO SYSTEMS INC |
50 |
$198,487 |
PGR |
PROGRESSIVE CP |
9 |
$176,574 |
T |
AT&T INC |
24 |
$162,286 |
GM |
GENERAL MOTORS CP |
33 |
$161,156 |
BLC |
BELO CP |
5 |
$146,889 |
INTC |
INTEL CP |
38 |
$145,212 |
PG |
PROCTER & GAMBLE CO |
26 |
$134,783 |
C |
CITIGROUP INC |
38 |
$127,669 |
IBM |
INTERNATIONAL BUSINESS MACHINE |
12 |
$125,738 |
KMP |
KINDER MORGAN ENERGY PARTNERS |
14 |
$119,937 |
CRK |
COMSTOCK RESOURCES INC |
85 |
$113,397 |
PCL |
PLUM CREEK TIMBER CO |
9 |
$104,653 |
PFE |
PFIZER INC |
31 |
$101,742 |
BAC |
BANK OF AMERICA CP |
13 |
$89,274 |
PRU |
PRUDENTIAL FINANCIAL INC |
6 |
$87,993 |
GNTX |
GENTEX CP |
14 |
$86,734 |
MCD |
MCDONALDS CP |
12 |
$83,990 |
F |
FORD MOTOR CO |
13 |
$76,383 |
WFC |
WELLS FARGO & CO |
6 |
$74,162 |
BRK B |
BERKSHIRE HATHAWAY INC CL B |
8 |
$72,087 |
JPM |
JP MORGAN CHASE & CO |
25 |
$71,453 |
AMGN |
AMGEN INC |
18 |
$71,158 |
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