An actively-managed approach to portfolio allocation has yet again seen Aberdeen Asset Management’s Emerging Opportunities Fund take out the top spot in the global equities (regional and emerging markets) category of this year’s Money Management/Lonsec Fund Manager of the Year Awards.
Aberdeen has taken the same approach to investing since it first started investing in the sector around 30 years ago, according to Aberdeen Asset Management senior investment specialist Stuart James.
“We consider ourselves buyers of companies, not holders of stock. But we will not doggedly stick with a company regardless – we actively manage our portfolios and reassess our holdings regularly,” he said.
Another Aberdeen entrant made it through to finalist stage in this category – the Aberdeen Asian Opportunities Fund. It takes a similar investment approach to Aberdeen’s Emerging Opportunities Fund: both portfolios are highly concentrated, with the Asian Opportunities Fund holding only 35-55 stocks and the Emerging Opportunities Fund allocated to 40-70 stocks.
James said that in both emerging markets and Asian equities, many companies remain financially sound, with robust balance sheets and relatively low levels of gearing.
He expects solid long-term opportunities in the Asian and emerging markets region, with valuations relatively cheap compared to developed market peers.
Aberdeen currently works with a team of 35 dedicated equities specialists, investing throughout Asia and the emerging markets. It recently added corporate governance experts.
“By industry standards, the team turnover is exceptionally low, with very few senior departures during the tenure of the teams,” James said.
He said it is essential to have a flat management structure and independence in ownership and thought.
For the past three-and-a-half years to the end of February, finalist the Fidelity Asia Fund has delivered performance of around 380 basis points ahead of the index.
That’s according to portfolio manager David Urquhart, who said the consistency of the fund’s performance has been driven largely by its fairly diverse allocation to the Asia ex-Japan region.
Urquhart said Fidelity’s key advantage – backed by a team of 43 investment analysts Asia-Pacific – was that it operated as a bottom-up focused house.
Having analysts on the ground in Seoul, Hong Kong, Shanghai, Singapore and Mumbai has allowed Urquhart to remain up-to-date with what’s going on in the region.
He added that Fidelity continues to add analysts, having already grown the team from 33 a couple of years ago.
Urquhart said that for the Asia region as a whole he expected marginally better growth this year compared to the past 12 months – a result of recent policies by Governments in Asia to fight inflation.
