Focusing on change
Our distinctive investment philosophy is called Focus on Change. We believe the price of a company’s shares is driven by changes in the fundamental information about the company and its prospects, and that markets are inefficient at factoring those changes into the share price. We therefore aim to identify, understand and exploit the key drivers behind these changes. We have found that the best opportunities come from the investments where we not only have the deepest insights but also the greatest conviction that market expectations are going to change.
Robust investment process
Our investment process takes a bottom-up approach - that is we look at the potential of a particular company. Meeting these companies is an essential part of this process; in fact it is the source of many of our non-consensus investment ideas. Our size and reputation ensures we have first-rate access to firms’ key decision makers. Stock selection and recommendations
Every investment idea must be justified by our five questions, which underpin the common investment language(https://www.aberdeenstandard.com/en/uk/institutional).
Once an analyst has researched a stock, it is then subject to rigorous peer review. So if one of our analysts is putting forward a new stock for inclusion within a portfolio, they need to demonstrate why it should be added and back the case with conviction.
Our portfolios reflect our conviction in each stock holding – we never invest purely to replicate the companies listed in an index such as the FTSE 100 or FTSE 250. Our bottom-up approach ensures that only the best stock ideas make it into our portfolios at any time. We continually monitor our portfolios to ensure they meet their objectives within the defined risk parameters. We have a dedicated risk management team, and our fund managers also play an active role here too.
In managing the investment portfolio of the Company, the Focus on Change philosophy is enhanced by using ASI’s proprietary screening tool, ‘The Matrix’, to focus research efforts and stock selection process. The Matrix is a quantitative screening tool assessing potential and current investments on 13 separate proven indicators of financial performance. It is a powerful tool in helping the Manager identify a shortlist of investable stocks for further analysis and monitor the performance and prospects of the portfolio on an ongoing basis. Stocks that are identified in this way are then subjected to further analysis and may be selected for the portfolio following discussions with company management.
The value of investments and the income from them can go down as well as up and you may get back less than the amount invested. The tax benefits relating to ISA investments may not be maintained. Investors should review the relevant Key Information Document (KID) brochure prior to making an investment decision. Read the detailed risk warning
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