Equities
The Aberdeen equity process dates from the early 1990s. The process is continuously 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: 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.
Team approach: We employ over 90 equity investment professionals based globally. Portfolio decisions are made collectively, and we avoid cultivating ‘star’ managers. Cross-coverage of securities also increases objectivity and lessens reliance on individuals.