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 across the three asset classes: equities, fixed income and property. 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.
The multi-asset funds combine investments across asset classes. We aim to add value by actively adjusting the weightings between asset sectors, and also by investing in a range of carefully selected, quality investments within each asset sector to enhance returns above the relevant market indices for each sector.
Aberdeen believes that superior risk adjusted returns can be achieved from multi-asset investing. Over the longer term all asset classes are driven by economic fundamentals; by identifying inefficiencies in valuations between markets (which occur over both short and longer time periods) value can be added to clients’ portfolios through dynamic allocations to different assets and markets. This philosophy applies as equally to mainstream asset types, such as equity, fixed income and cash, as it does to alternative asset classes, such as property, venture capital, private equity and hedge funds
Our investment process is designed to identify the optimal asset allocation to meet our clients’ investment objectives. This means the appropriate combination of asset types and investment approaches to generate the required investment return within the agreed risk parameters. We use both in-house and Third Party Managers (in the instance where Aberdeen does not offer a required capability), when selecting investments to include in multi-asset portfolios.
In addition, active management is undertaken where appropriate to boost the underlying return stream from market inefficiencies. Nonetheless, the Fund is designed to be successful by providing its returns from market or beta related return sources alone without the assumption of any additional manager-related or alpha-related returns. Added value from active management is expected to come from both stock selection and tactical asset allocation.
We hold absolute returns to be more important over the longer term than those relative to a benchmark or index. Our starting point therefore is to use the risk free rate to measure the relative attractiveness of different asset classes and we are comfortable taking decisive positions away from a benchmark. This philosophy extends to asset classes themselves, where we do not equate risk with divergence from the benchmark, but with the absolute notion of investing in a poor quality security or fund. This process is underpinned by our convictions from proprietary analysis and comparative research at a global level.