How we invest
- Global reach with experienced teams around the world
- Own in-depth, forward-looking research
- Security focus on value relative to fundamental quality
- Emphasis on risk oversight to reduce losses and protect income
- Our emerging markets heritage gives us a unique insight into developing economies
Our fixed income investment process
Our fixed income process is based upon three simple investment principles; research, relative value and portfolio construction, with risk management integrated at every stage.
Comprehensive proprietary research forms the foundation of our investment process. We have an intensive, fundamental, bottom-up approach to our research, which is produced by a large team of experienced analysts located across our regional offices. This structure enables research to be sourced, analysed and interpreted in the most effective way according to local market specialty and the location of our products.
The analysts’ results are shared globally via our proprietary research database and give the investment teams a thorough understanding of the inherent risks associated with the markets/instruments in which we invest, and a basis upon which to determine their fair value.
We have a team-based approach to decision making and we construct well diversified portfolios, factors which we believe deliver better risk-adjusted returns over time. The team responsible for each product is based in one region to underline a strong culture of ownership and accountability.
Risk management at every stage
Throughout the process we use a combination of qualitative and quantitative inputs and have a disciplined and rigorous framework for managing risk at every stage.
- Low volatility: our absolute return bond strategy exhibits lower volatility than many diversified growth strategies.
- Stable, risk-adjusted returns: the freedom to express views and profit both from rises and falls in the market can offer the potential for better returns relative to a benchmark-constrained portfolio.
- Focus on capital preservation: the core portfolio aims to generate cash-like returns. High-quality short-dated fixed income instruments, typically with a duration of less than two years, are usually held to maturity. This acts to help dampen volatility, allowing greater scope to seek excess return elsewhere.
- All market conditions: We apply manager skill in three areas of the market: corporate bonds, government bonds and foreign exchange. We can adopt long and short positions, using derivatives to implement views on interest rates, credit spreads and exchange rates. This means we can seek value in all market conditions. Relative value trades allow us to take a view on one country, market, sector, bond or currency relative to another.
Emerging market debt
We believe emerging markets present some of the world’s most dynamic growth and investment opportunities. They have stronger credit ratings and GDP growth predictions than many developed countries.
Aberdeen offers a blended approach which showcases our best ideas across the Emerging Market Debt (EMD) asset class investing in hard currency, local currency, sovereigns, quasi-sovereigns, corporates and currencies against a hard currency benchmark. It is a strategy we have been successfully managing for over a decade with a robust performance track record.
We also offer investment in the following components of the EMD universe:
- Hard currency sovereign debt
- Local Currency Debt
- Corporate Debt
What differentiates Aberdeen?
- Long history of investing in emerging markets
- A core belief in first hand fundamental and technical research by our own team of portfolio managers
- Well-resourced, stable and highly experienced team with a robust track record of investing in emerging market debt across a number of market cycles
- In-house fundamental top-down and bottom-up credit analysis providing comprehensive coverage of all factors relevant to the asset class
- Little attention paid to consensus as represented by peer group or benchmark. We trust our own research
- Philosophy of a dedicated, team-based approach has benefited a variety of mandates across the high yield spectrum
- Core belief in first-hand fundamental research by our own team of analysts
- We pay little attention to the consensus or benchmark; we rely on our first-hand fundamental research produced by our own team of fixed income analysts
- Investing over the long term enables us to build relationships with the companies in which we invest
- Highly experienced team with strong emphasis on team culture
Liability driven investment
- Our core philosophy is that a liability driven investing (LDI) mandate’s primary focus should be on de-risking. We believe that it is more efficient to allocate a scheme’s alpha risk budget towards mandates with the largest opportunity sets.
- Our approach is therefore “passive-plus” whereby we will look to ensure that interest rate and inflation hedges are positioned as effectively as possible both initially and on an on-going basis.
- We will add value by focussing on the relative value between government bonds and swaps in both nominal rates and inflation space and also on managing physical bond holdings to react to relative value opportunities across the curve.
- We recognise that all LDI clients have different characteristics and we are happy to be flexible in terms of the range of solutions implemented (e.g. “delta-one” hedging, swaption strategies, equity option or synthetic equity replication strategies).
- Our heritage of managing de-risking strategies extends back to 1999.
- Since then, we have designed, executed and managed de-risking mandates on behalf of Pension and Insurance clients, ranging from simple hedging to complex, innovative de-risking solutions.
- Aberdeen has identified LDI as a key area of future growth. In recent years we have increased the size of our LDI team, adding experienced and highly qualified personnel ahead of potential growth in our external client base.
- We have also added to the existing LDI client service team to ensure we can forge strong, meaningful partnerships with our existing and prospective clients.
- As such, we are extremely well positioned to act quickly to provide prospective clients with a bespoke, optimal de-risking solution and offer an innovative and proactive partnership to meet their requirements as they evolve.
Aberdeen is one of the leading providers of liquidity solutions.
The team has a 25 year track record of delivering flexible, convenient and cost effective solutions across major currencies. Intensive, fundamental credit research is at the core of our investment approach.
Our fund range can be used in isolation or blended together to meet your requirements. For more information, please contact our Liquidity Solutions Team.
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We provide capability across a broad range of regional strategies, including:
Our teams are located in several key offices across the globe which gives us a distinct information advantage.