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abrdn Global Smaller Companies
abrdn Global Smaller Companies is a textbook fund from the abrdn equities team. Based around their powerful screening tool 'Matrix', which former co-manager Harry Nimmo helped create, it identifies smaller companies from all around the globe - including emerging markets - that they believe to have the best growth prospects. The portfolio is concentrated in 50-60 names.
Previously ASI Global Smaller Companies
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Kirsty Desson is an Investment Director who co-manages the Global Small Cap OEIC, SICAV, and oversees several segregated mandates. She researches and analyzes stocks in Japan and leads the team’s global stock selection discussions. Kirsty began her career at Martin Currie in 2000, initially on the US Equity Team before moving to the Asia and Emerging Markets Team as an Investment Manager. After a break from the industry, she joined Aberdeen Standard Investments' Smaller Companies Team in 2012. Kirsty holds an MA (Hons) and IMC qualifications.
Kirsty Desson is an Investment Director who co-manages the Global Small Cap OEIC, SICAV, and oversees several segregated mandates. She researches and analyzes stocks in Japan and leads the team’s global stock selection discussions. Kirsty began her career at Martin Currie in 2000, initially on the US Equity Team before moving to the Asia and Emerging Markets Team as an Investment Manager. After a break from the industry, she joined Aberdeen Standard Investments' Smaller Companies Team in 2012. Kirsty holds an MA (Hons) and IMC qualifications.
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Company Description
abrdn (formerly Aberdeen Standard Investments) is the result of the merger of Aberdeen Asset Management and Standard Life Investments, which took place in August 2017. With more than 20 locations worldwide, abrdn seeks to find the most sustainable investment opportunities globally.
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Talking Factsheet
Quote from the Fund Manager
Like most things in life, buying quality usually pays off in the long run.
Kirsty Desson
Lead manager
Investment process
The manager employs the company's proprietary screening tool, Matrix, at the start of the process. It looks for four key factors: quality, growth, momentum and value. Fundamental research will be undertaken on the financial accounts of a potential company, looking at the quality of its earnings to ensure business sustainability. The investment case is then verified with the management team, using the extensive database of company meeting notes, or further engagement. When valuing a company, Kirsty wants to see what expectations are built into the current price and identify the drivers that could lead to an increase. The result is a 'best ideas' list of circa 100 names, from which a portfolio of 50-60 holdings will be built.
Risk
abrdn Global Smaller Companies fund is monitored by a specialist risk team that provides a monthly risk report. The portfolio has a high ‘active share’, meaning it is very different to its benchmark. There are limits imposed: stocks can only be +/-5% versus the benchmark, sector differences are limited to +/-15%, and countries by +/-20%. Smaller companies tend to be higher risk than larger companies. The fund has a bias towards growth sectors and tends to avoid cyclical industries like materials. This means that the fund may lag in periods where its style is out of favour.
ESG
ESG - Integrated
As with all strategies managed at abrdn, ESG analysis is embedded in the process for this fund. This approach is founded on the belief that understanding the impact of ESG factors leads to better investment decisions. The work is done as part of the fundamental analysis, where they consider the ESG risks that are most material to the stock and build them into the analysis alongside other financial metrics incorporated in the Matrix system. This is designed to assess whether ESG risks of are being reflected in the stock valuation, or not. The process also highlights ESG opportunities, such as products or services addressing societal or environmental issues which could lead to performance upside or a new avenue for the company. This work goes beyond simple analysis though, with engagement from Kirsty and the team at abrdn about how the firm manages the key risks and opportunities that exist, as well as judging the managements’ governance approach on an ongoing basis. Whilst ESG is an important factor in determining the investability of a stock, it is not the primary feature of the process.
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