Making global connections
Today, our clients face an uncertain world. Yields on fixed-income securities are low by historical standards. Volatility is rising, and equity returns are likely to be more subdued than during the post-crisis recovery. Meanwhile, inflation is leading to higher interest rates in the developed world, with negative implications for both economic growth and asset-market returns. Also there is no shortage of geopolitical risk to compound these concerns.
In this environment, our clients typically have three main goals: capital preservation, capital growth and reliable income. But the balance of those priorities differs from client to client, and the balance changes as markets evolve and investors approach retirement.
In consequence, clients’ behaviour is changing too. Rather than relying on intermediaries or institutions, individual investors are increasingly taking charge of their own requirements. Financial risk is being democratised – or, in other words, clients are making investment decisions for themselves. Diversification is a vital part of that decision-making, as clients assemble their own portfolios and seek to manage risk.
It’s important to realise that often no single investment product provides a solution here. Clients need access to diverse options not only within asset classes but across them. Some investment managers have chosen to specialise in a single asset class. But we think that it makes much more sense to think big. Rather than rely on a single strand of expertise, we prefer to build breadth across the whole suite of asset classes – establishing a network of connections that spans the globe.
At Aberdeen Standard Investments, our status as one of the world’s largest active managers allows us to do just that. We have more than 1,000 investment professionals working for us. These specialists span the spectrum of asset classes – from equities and fixed income to quantitative and multi-asset approaches to alternatives and private markets. With 46 office locations and clients in 80 countries, we have a genuinely global reach. This not only enhances our research, but also brings us closer to our clients.
Crucially, our global network also brings us closer to the companies and other assets that we invest in, wherever they are located. That ensures that we are well placed to conduct site visits and management meetings in any country and on any continent. We are then able to share our findings with our other teams and offices. In this way, our global reach allows us to create connections across regions, sectors and asset classes.
This world-spanning web of expertise is hugely beneficial to our clients. By creating a ‘one-stop shop’ in which our clients can construct a suitably diverse portfolio from a broad range of rigorously researched asset classes, we’re providing them a unique level of convenience. We can also provide assistance with portfolio design, asset allocation and risk management.
In particular, our strengths in areas such as alternatives and private markets allow us to identify opportunities for our clients that can generate returns independently of the equity risk premium or of interest rates. Some of these asset classes are ‘alternative alternatives’ that still lie largely outside the investment mainstream. This allows us to offer significant potential for diversification benefits and additional ways to generate growth and income.
It’s important to realise that this breadth doesn’t detract from the depth of our expertise in individual asset classes. Rather, it enhances it. Each of our teams is fully resourced with dedicated specialists, and our experience in each asset class is second to none. But our teams also benefit from sharing their ideas and expertise with each other.
This cross-fertilisation gives our research an additional edge. Our extensive cross asset class network improves our decision-making by allowing us to combine a wealth of perspectives – from the stock-specific to the macroeconomic and from the corporate to the social and environmental.
Our size is also an advantage in ensuring that we are equipped to meet investors’ needs. Those needs are always evolving and need to be matched by constant innovation. We have the scale to invest, attract talent and develop next-generation products. We are also well aware of the need to embrace technological change to ensure that we can improve efficiency, lower costs and enhance the service we provide to our clients.
Finally, our scale allows us to have significant influence on the companies in which we invest and thus the world around us. This is something our clients take very seriously; environmental, social and governance (ESG) issues are key concerns for today’s investors. We have embedded ESG in our process and philosophy, and we strive to make a positive impact through our actions. As one of the world’s largest active managers, we have considerable clout with management and boards, and this improves our ability to act as responsible stewards of our clients’ capital.
It’s this combination of capabilities and influence that makes us an attractive partner for individual and institutional investors alike. Size isn’t everything. But our breadth, depth and wealth of connections create a client proposition that’s hard to beat.
RISK WARNINGThe 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 views and conclusions expressed in this communication are for general interest only and should not be taken as investment advice or as an invitation to purchase or sell any specific security.
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