A global investment management group, managing assets for both institutional and retail clients from offices around the world. I have a holding in my income portfolio (epic code: ADN).
Aberdeen Asset Management issued their first quarter IMS today and declines in their Assets under Management (AuM) were much as expected, following the Morningstar report on net outflows in the 11 months to November 2013. This is principally as a result of negative sentiment towards Asian and emerging markets in the December quarter.
Morningstar reported in early January that ADN had a £1.6bn net outflow of funds for the 11 months to November 2013 and for the first time in five years were in the bottom 10 of least popular fund managers, along with their recent acquisition Scottish Widows.
Morningstar reported in early January that ADN had a £1.6bn net outflow of funds for the 11 months to November 2013 and for the first time in five years were in the bottom 10 of least popular fund managers, along with their recent acquisition Scottish Widows.
ADN reported gross inflows for the quarter
of £6.8bn compared to £9.6bn for the 3 months to 30 September 2013. Outflows of £11.2bn were lower compared to £13.2bn for the 3 months to 30 September 2013,
this resulted in net outflows of £4.4bn compared to £3.6bn for the previous
quarter.
The performance of their funds added £1.4bn, although foreign exchange losses reduced assets by £3.8bn.
This resulted in ADN declaring AuM of £193.6bn at 31 December 2013 that were 3.4% lower than the £200.4bn reported at 30 September 2013.
Comments from Martin Gilbert on the fund performance are also relevant to how individual investors might approach their own portfolios:
In our experience it has never ultimately been rewarding to chase performance, instead our focus remains on undertaking our own detailed research and investing in companies we believe offer both good quality and attractive valuations. Eventually the market will return to focusing on corporate fundamentals - the higher quality companies. In short we do not expect to make any significant changes to the structure of our portfolios..."
The performance of their funds added £1.4bn, although foreign exchange losses reduced assets by £3.8bn.
This resulted in ADN declaring AuM of £193.6bn at 31 December 2013 that were 3.4% lower than the £200.4bn reported at 30 September 2013.
Comments from Martin Gilbert on the fund performance are also relevant to how individual investors might approach their own portfolios:
"...Our equity process is focused on investing for the long term and our long term performance is compelling. However, there will be circumstances which will result in periods of shorter term underperformance. During 2013 we saw lower quality, more cyclical companies - which are not typical Aberdeen holdings - rally over the year. Our Asian, emerging market and global portfolios were also overweight markets where there was considerable currency weakness.
In our experience it has never ultimately been rewarding to chase performance, instead our focus remains on undertaking our own detailed research and investing in companies we believe offer both good quality and attractive valuations. Eventually the market will return to focusing on corporate fundamentals - the higher quality companies. In short we do not expect to make any significant changes to the structure of our portfolios..."
My own annual return (dividends not reinvested) from ADN since my initial purchase in February 2007 has been 12.7%pa. This includes today's 3% decline and the sale of 50% of my holding in January and March 2012 to rebalance my income portfolio.
During the period of my holding, as demonstrated by the chart below, there were many instances when the market was telling me to ditch the stock. I held, as I believed the fundamentals of the business were strong and management were taking the right decisions to add value to my investment. I'm sure that there are geniuses that can time market entry and exit to perfection and believe they can make a fortune on this volatility, but unfortunately I'm not one of them. Investing in good quality businesses, at reasonable prices and holding for a substantial period, while collecting a rising dividend, works for me and is a lot less stressful than trying to time the market.
During the period of my holding, as demonstrated by the chart below, there were many instances when the market was telling me to ditch the stock. I held, as I believed the fundamentals of the business were strong and management were taking the right decisions to add value to my investment. I'm sure that there are geniuses that can time market entry and exit to perfection and believe they can make a fortune on this volatility, but unfortunately I'm not one of them. Investing in good quality businesses, at reasonable prices and holding for a substantial period, while collecting a rising dividend, works for me and is a lot less stressful than trying to time the market.
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