Equities
We pride ourselves on original thinking and research. We also believe strongly in portfolio transparency. Implicit in our style is a rejection of commoditized products and closet indexing; our business therefore stands or falls on whether we can genuinely add value to client wealth.
We operate as an independent company, to avoid the conflicts of interest that can affect integrated financial groups. Although we are publicly quoted, management and staff are significant owners of the business. Asset management is all that we do.
The Aberdeen mainstream equity process dates from the early 1990s. The process is continually evolving but its central tenets are an emphasis on original research, the identification of businesses that we can understand and the elimination of downside risks through price disciplines. While it originated in Asia, our approach works equally in developed markets, since fundamentals drive returns over the long term.
Main Strengths
Active Management: Our aim is to add value by identifying good quality securities, defined chiefly in terms of management and business model, which are attractively priced. Stock selection is the key source of equity alpha. We downplay benchmarks in portfolio construction since these provide little clue to future performance.
Proprietary research: Our 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: buy-and-hold; add on the dips; take profits on price run-ups. This reduces transaction costs and keeps portfolios focused. We rarely focus on short-term returns for mainstream strategies, albeit for specialist portfolios, activity may be more dynamic.