A patient investor that avoids trends and fads


This week Money asks Morningstar where to invest and its pick is Aberdeen Asian Opportunities.


The fund aims to provide investors with high capital growth over the medium to long term (three to five years) by seeking exposure to Asian sharemarkets (other than Japan).

Aberdeen Asian

Independent commentary

Aberdeen boasts a well-resourced and strong investment team led by Flavia Cheong. Cheong is a veteran who started at the firm in 1996 and her appointment as head of Asia ex-Japan equities saw Hugh Young move to a broader role within the company.

We expect no impact from the change, and this should be seen as part of Aberdeen's succession planning. Team members are collegial in nature and act as generalists, minimising key person risk.

Aberdeen doesn't overly complicate the process - the keys are quality and valuation.

The team also looks for quality, sustainable, competitive business models with high returns on assets and capital as well as strong balance sheets. Aberdeen is a patient investor and tends to avoid fads or hot themes, meaning the portfolio typically bears little resemblance to the MSCI AC Asia Pacific ex Japan Index.

There are challenges here. Capacity has been a factor over time, lessened to an extent by outflows in 2015. Negative sentiment toward the sector has largely driven this but poor performance hasn't helped, particularly in areas such as China.

At the firm level, there has been increased noise about the future and speculation over ownership. We don't believe this has had an impact on the investment team. This isn't the first time Aberdeen has faced a difficult environment, and we believe it remains focused and justifies its Morningstar analyst rating of silver.

Key fund data

Management fee: 1.18%pa Morningstar analyst rating: silver Minimum initial investment: $20,000 Role in portfolio: supporting



This material has been prepared by Morningstar Australasia Pty Ltd for general use only, without reference to your objectives, financial situation or needs. You should seek your own advice and consider whether the advice is appropriate in light of your objectives, financial situation and needs.


Post a comment
Link to something uTAOZeqy