Aberdeen Standard SICAV I – Global Mid-Cap Equity

Investment process

Aberdeen Standard SICAV I - Global Mid-Cap Equity fund is an evolution of abrdn’s successful small and mid-cap desk and is designed for investors who have a lower risk appetite, but still like the growth profile associated with companies towards the smaller end of the market.

The fund’s process is led by abrdn’s proprietary Matrix system which looks for quality, growth and momentum factors. There are three sources for ideas to populate the investment universe.
The first of these are the ‘small cap graduates’. These are companies the team knows but which have grown out of the small cap universe.

The second source is ideas from the global abrdn network, which has become a useful resource since the merger in 2017. Here, the managers lever the work already completed by their colleagues, and simply adding their own analysis.

Thirdly, there will be some totally new ideas from the Matrix, or as spin-offs from research into other companies. This creates an ideas shortlist of around 300 companies. From here, the managers will conduct their own deep-dive analysis, including contacting the company to question the strategy and a full ESG analysis.

Once these ideas are analysed, they are debated amongst the whole team, with the best ideas going through to a preferred list which will populate the portfolio. Anjli will consider a variety of factors when deciding on stocks, including what level of diversification they add to the portfolio, risk analytics, and a weighted average Matrix score to ensure the portfolio has a balance of factor exposures.

Aberdeen Standard SICAV I - Global Mid-Cap Equity is unlikely to have holdings in utilities and communication services as they are highly regulated industries with low growth, and will have limited exposure to energy, materials, real estate and financials sectors which are cyclical and driven by external factors. Instead, the process will favour the likes of consumer staples, consumer discretionary, health care, technology and industrials, which are more innovative sectors with niche industry leaders.

At least 70% of the fund will be in the mid-cap benchmark at all times, but the managers will hold stocks for up to a year once they graduate from mid-cap index into larger companies.