Investment Process

At Aberdeen, asset management is our business.

We operate independently and only manage assets for third parties, allowing us to focus solely on their needs, without conflicts of interest.

Our clients access our investment expertise drawn from three main asset classes: equities, fixed income and property, as well as alternative strategies.

We package our skills in the form of segregated and pooled products across borders. We invest worldwide and follow a predominantly long-only approach, based on fundamentally sound investments – we do not chase market fads.

Our investment teams are based in the markets or regions in which they invest. Clients understand our process and portfolios because they are transparent.

Aberdeen’s mainstream equity process dates from the early 1990s and we believe its advantage lies in the consistency of its approach, irrespective of market conditions.

• Bottom-up investment style, emphasising company fundamentals
• Team approach, with asset managers based in the regions where we invest
• Low portfolio turnover, buying stocks and holding them for the long term
• First-hand research is central to our process
• No investment without interviewing the company’s management first

From the company visits and analysis carried out regionally, through to portfolio construction decisions, we adopt a team approach.

Cross-coverage of securities locally ensures objectivity; we avoid cultivating ‘star’ managers. Diversification at the stock level is our main control of risk. We aim to add value by capitalising on original research. We see equity risk in terms of investing in a poor quality company, or overpaying for a good one.

Active management: We aim to add value by identifying good quality stocks, defined chiefly in terms of management and business model, which are attractively priced. Good stockpicking is the key to our performance. We downplay benchmarks in portfolio construction since these provide little clue to future performance. Our asset managers avoid businesses that we do not understand or those with discriminatory shareholder structures.

Proprietary research: Our mainstream equity managers always visit companies before investing, making thousands of visits annually to existing and prospective holdings. Every contact is documented in detail. If a security fails our screens, we will not own it, irrespective of its index weight.

Long-term focus: Our mainstream strategies are simple; we buy and hold, add on price dips and take profits on price rises. This reduces transaction costs and keeps portfolios focused. We rarely pursue short-term returns for mainstream equity strategies, albeit for specialist portfolios, activity may be more dynamic.

Team approach: We employ around 90 equity investment professionals globally. Portfolio decisions are made collectively, and we avoid cultivating ‘star’ fund managers. Cross-coverage of securities also increases objectivity and lessens reliance on individuals.