Four of Scotland’s best for the long-term investor

Sam Slator 25/01/18 in Strategy

There are many traditional ways to mark Scottish poet Robert Burns’ birth (donning a kilt, pouring a wee dram and belting out your best rendition of Auld Lang Syne, to name but a few) but, here at FundCalibre, we are unafraid to break with convention.

Seeing as we are more knowledgeable about investing than we are playing the bagpipes or knocking up some hearty cuisine, here are four Scottish-based funds which we think should stand investors in good stead over the long term.

Standard Life Investments UK Equity Income Unconstrained

First up is Thomas Moore’s £1.3bn income fund, which will hold a concentrated and completely benchmark-agnostic portfolio of between 30 and 60 stocks at any one time.

Like most fund managers at Standard Life Investments (SLI), Thomas uses an initial quant screen called ‘the matrix’ to single out the high-quality companies. From here, he focuses on individual companies’ ability to grow their earnings and increase their dividends.

SLI’s Focus on Change’ investment philosophy also underpins the fund‘s process, which leads Thomas to buy into stocks that are undergoing periods of structural change and have therefore been undervalued by the broader market. This means he tends to avoid many of the traditional income-paying stalwarts that some of his UK equity income peers have crowded into.

Aberdeen Latin American Equity

Swapping neeps and tatties for tacos and tamales, Aberdeen’s Latin American Equity fund could serve to spice up investors’ portfolios as a satellite holding, given that it specialises in a volatile area of the market.

The £219m fund is managed using a team-based approach and, in a bid to mitigate the turbulence that can come with investing in Latin American equities, they focus on high-quality names and targeting absolute returns rather than relative returns.

The portfolio is concentrated and consists of approximately 40 holdings, but these are chosen using an extensive stock selection process which involves directly visiting management teams, as well as focusing on recurring earnings growth, strong balance sheets and past treatments of minority shareholders.

Scottish Mortgage Investment Trust

Of course, our list would not be complete without the aptly-named Scottish Mortgage Investment Trust, which is headed up by James Anderson and deputy-managed by Tom Slater.

The managers look to generate high levels of growth and, in order to do so, they are not afraid to take punchy bets or buy into companies which may be volatile on a day-to-day basis but should thrive over the long term.

James and Tom have a marked focus on global companies which are disrupters in their respective industries, which tends to mean the portfolio is overweight the technology sector.

Kames Ethical Cautious Managed

Last but not least, Iain Buckle and Audrey Ryan’s multi-asset portfolio aims to provide income and long-term growth through a combination of bonds, cash and UK equities (of which it can hold between 20% to 60% in at any one time).

The £581m fund has a highly-diversified portfolio – which tends to consist of more than 200 holdings at any one time – in order to smooth returns and minimise any potential drawdowns.

It also abides by Kames’ strict ethical screening process, which removes approximately 35% of the FTSE 100 index from the managers’ investable universe. Sectors in which Iain and Audrey are currently finding the best opportunities include industrials and financials.

This article is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. Tax treatment depends of your individual circumstances and may be subject to change in the future. If you are unsure about the suitability of any investment you should seek professional advice. Whilst FundCalibre provides product information, guidance and fund research we cannot know which of these products or funds, if any, are suitable for your particular circumstances and must leave that judgement to you. Before you make any investment decision, make sure you’re comfortable and fully understand the risks. Further information can be found on Elite Rated funds by simply clicking on the name highlighted in the article.