The latter covers the emerging markets of Europe, Africa, Latin America and the Middle East. However, there is emphasis on cross-coverage of companies.
Aberdeen has one of the biggest teams in the region, with more than 100 individuals based in Asia. Established by Hugh Young and Peter Hames in the early 1990s, the teams have been remarkably stable and the locations in Asia and London allow them to conduct an extensive number of company visits, which they view as crucial to the investment process.
Aberdeen’s team-based investment approach is strictly bottom-up and seeks to identify good-quality companies that it understands, are growing and have the management skill to deal with that growth.
It considers quality companies to have sustainable, competitive business models, strong balance sheets and high returns on assets and capital.
It likes companies that generate significant levels of cash, spend that cash in wisely valued accretive projects or return it to shareholders to make more efficient use of their balance sheet.
Management is scrutinised closely to ensure it is trustworthy, capable, and has the right attitude towards corporate governance and plans for the business.
Aberdeen’s team is cautious by nature, and it considers risk from the perspective of avoiding investing in poor-quality companies or overpaying, more so than benchmark risk or tracking error.
The portfolio will typically have 40 to 70 holdings. Turnover is generally low; it is a long-term investor and not a trader. While the team is aware of the benchmark, little consideration is given to it when constructing the portfolio.
The position size in each stock depends upon the quality of the management and company, its relative valuation and the degree of confidence the team has in it.
Due consideration is also given to the liquidity in each stock. However, there are risk guidelines: the maximum stock position is 10 per cent, while the maximum positions in industry and country are 30 per cent and 30 per cent respectively.
Chetan Modi (pictured right), investment research analyst at OBSR, said: "The fund is managed by a well-resourced and stable team which is led by Devan Kaloo. The analysts and portfolio managers are based in Singapore and London and the team features a good mix of youth and experience."
"The team-based investment process leads to a portfolio of quality companies which provides some resilience during tougher periods in emerging markets. Although the fund can struggle in momentum-led markets, we like that the investment approach is consistently applied and this is borne out in the strong long-term results."