Q1. Can you explain the team’s stock picking strategy?
The global equity team build on the extensive resource that Aberdeen has located across the world in its regional equity teams. Each regional team has their own concentrated model portfolio. The sum of these portfolios is the universe from which the global team pick to compile their own model portfolio. The global equity team look at this universe (the buy list) from a global perspective and identify the most attractive opportunities that are primarily listed.
Q2. To what extent has the euro crisis affected the Fund?
It would be difficult to pinpoint the exact impact the Euro crisis has had or not had on the portfolio and identify one single event as the cause. More importantly the portfolio is shaped from the bottom up, rather than from any top down view.
With the environment that has existed over the past three years we have looked to continue to focus on the underlying company fundamentals. We have also considered the component that is the macro backdrop as one element of our fundamental analysis on a company by company basis.
We are looking to put in place a portfolio that reflects what we believe are the most attractive opportunities, wherever they may be listed, but wrapped up in a portfolio that is developed in an absolute sense, rather than the narrower diversification as defined by the benchmark index.
Q3. What market conditions best suit your fund?
We want to invest in quality companies on behalf of our clients. Therefore, in general it can be anticipated that in strong positive markets, it is likely that we will underperform.
Q4. Where do you see the best opportunities?
As we are bottom up investors we do not invest in regions or sectors, instead we focus on investing in individual companies. Our asset allocation is therefore a default and is a function of the sum of the individual components.
Q5. How do you expect the next 12 months to influence fund performance?
To be perfectly honest we have no idea. We manage the portfolios with regards to a medium to longer term time horizon (typically 3 to 5 years). Over any given year, movements in markets may well deviate from fundamentals due to a whole host of reasons, most of which would be beyond our control. We try to focus on what we can control and understand, namely the individual companies and their individual intrinsic value. This may lead to periods where the portfolio will under-perform however we believe that ultimately valuations will reflect fundamentals. The more prices deviate from what we feel the intrinsic values are the greater the breadth of opportunities there are to take advantage of.
The views in this article are that of the author’s and do not necessarily reflect those of Fiducia Wealth Management Ltd.
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