A global investment company and asset manager represented in Luxembourg, abrdn, has launched a new Société d'Investissement à Capital Variable (SICAV) fund for emerging markets income equity, focusing on blended growth and income opportunities.
The abrdn SICAV I - Emerging Markets Income Equity Fund (‘the Fund’), mirrors an existing in-house strategy launched in 2012 under a UK investment vehicle. This strategy is managed by lead Fund Manager Matt Williams and supports portfolio construction groups in London and Singapore.
According to abrdn, the Fund aims to achieve a combination of growth and income by investing in emerging markets (EM) equities. The team looks for well-performing businesses and profitable growth by analysing cash flow, prioritising companies on their ability to pay a dividend, in the context of where they are within their investment cycle.
The Fund takes a two-pillar approach to portfolio construction - 50% in high dividend, 50% in dividend growth. This balance combined with an agnostic approach to stock picking style across the breadth of the EM universe, aims to deliver a growing income stream over various types of market environments as well as attractive upside and downside capture characteristics. Portfolio risk objectives are to prioritise risk towards the team’s stock-specific insights and to provide diversification of income ideas whilst aiming to dampen country and sector risks. The Fund is not dependent on a concentrated group of high-yielding stocks to deliver performance, abrdn noted.
Matt Williams, abrdn senior investment director, said: “Emerging market investing is often associated with growth rather than income. However, data shows that there are now as many companies paying dividends in emerging markets as in developed markets. Having managed this strategy for over a decade, we can see a uniquely appealing income universe for active investors with a total return mindset. The growth of earnings and the compounding of dividends in EM equities can make for a powerful combination in portfolios, and we’re delighted to launch the SICAV bringing this opportunity to more investors.”
Devan Kaloo, global head of equities, added: “We have a 36-year track record of investing in emerging market equities. Matt and his portfolio construction group draw their insights from a highly experienced and well-resourced EM equities team. Our boots on the ground in crucial EM countries help support the Fund’s all-cap approach, exploiting additional income opportunities in small- cap and Frontier markets.”
