Our approach to equity investments
Objectivity, consistency and first-hand research are at the heart of our equity process. It’s an approach that’s been tried and tested for over 20 years.
Our unique investment approach
Company due diligence and original research are at the core of Aberdeen’s investment strategy. We believe that our success lies in a consistent approach, irrespective of market conditions. We never chase fads.
- Bottom-up investment style: We emphasize company fundamentals. We have a relentless focus on quality companies with good growth potential
- Face-to-face research: Our equity investment teams always meet company management before we invest. We pay little attention to consensus, peer groups or benchmarks. If we don’t like the company, we won’t hold it
- A thorough assessment of risk: To us, risk is buying a poor quality company, or overpaying for a good one
- Concentrated portfolio: High conviction in our stock choices
- Long-term thinking: We buy and hold, add on price dips and take profits on price rises. We keep our portfolios focused
- Team approach: Our asset managers are based in the regions where we invest. We make decisions collectively. We don’t believe in ‘star’ fund managers
The Aberdeen equity investment process
Choosing a good stock is the key to our performance. We identify what we believe are good-quality securities with strong management and business models, which are attractively priced.
Benchmarks are not a big influence on our portfolio construction since they don’t really indicate future performance.
Our asset managers avoid businesses we do not understand and those that have discriminatory shareholder structures.
Our mainstream equity managers always visit companies before investing, making thousands of visits every year to existing and prospective holdings.
Every contact is documented in detail. If a security fails our screens, we will not own it, no matter what its index weight.
We control risk by investing in diverse stock, and we add value by capitalizing on our original research. Risk, for us, is as much about overpaying for a good company as investing in a bad one.
Our mainstream strategies are simple: we buy and hold, add on the dips and take profits on price rises. This reduces transaction costs and keeps our portfolios focused.
We don’t often pursue short-term returns for mainstream equity strategies, although for specialist portfolios we may take a more dynamic approach if required.
We employ over 110 equity investment professionals all over the world. We work as a team on everything, from company visits and analysis to deciding how we’ll construct portfolios. We don’t cultivate ‘star’ managers – rather, we stay objective with teams covering securities on a local level.