HL acknowledges glimpses of good performance but says the fund has struggled to deliver consistent results and attributes this to poor stock selection.
The company considers that the fund’s bias to energy, in particular, oil and gas, has been detrimental as the sector has suffered with softer commodity prices. It believes its significant exposure to financials has also proven to be a poor decision with the sector likely to suffer further on a global scale.
Head of research Mark Dampier says Aberdeen’s emerging markets fund, managed by London-based Devan Kaloo is a superior alternative. The fund’s focus is on good quality management and conservatively run businesses with good cashflow.
Dampier says: “The fund has been resilient in challenging economic conditions, which is testament to the skills of Aberdeen’s emerging markets team. In the longer term, we believe this fund has the potential to deliver superior returns.”