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 fixed income process has been in place for almost 20 years. It is based on four key beliefs:
- Markets are inefficient due to different market participants with varying time-frames, motivations and imperfect information. We therefore strongly believe in an active approach to fixed income investing and employ an investment style that reflects this. (A detailed paper outlining the merits of an active approach to fixed income investing can be provided on request.)
- A strong risk framework is required for sustainable alpha generation. A risk framework permeates through every level of our investment process and business, from individual strategy formulation, through to trade execution, and ultimately to overall portfolio risk positioning. This strong risk focus allows for a less constrained investment universe, which in turn leads to increases in risk adjusted returns.
- A focus on longer term cyclical and structural investment themes is important to uncover alpha opportunities. This is equally applicable whether considering top down macro positioning in portfolios or credit security selection (where credit quality assessment is the primary driver of the investment decision). The need for a disciplined process which properly captures well researched longer term fundamental views is at the core of our investment approach.
- Diversified sources of added value improve a portfolio’s risk-return profile. Independent specialist teams aim to exploit lowly correlated top down and/or bottom up opportunities. The general benefits of diversification of investment strategies are well documented. Certainly, the main factors in managing fixed income portfolios are not perfectly correlated, indeed some are negatively correlated. A multi strategy approach, combined with a thorough understanding of how these various strategies come together to represent overall portfolio risk; can extract significant diversification benefits for investors.
Globally, Aberdeen employs over 130 fixed income investment professionals across teams located in London, Philadelphia, Singapore and Sydney, our teams. These teams invest within clearly delineated parameters, with defined reporting lines. Aberdeen's team structure is based on transparency and accountability.