Following a recent review, the Aberdeen Ex-20 Australian Equities Fund has been upgraded to “Highly Recommended” by Lonsec.

In its review of the Fund, Lonsec highlighted Aberdeen’s disciplined research process, the strength of its solid and experienced investment team and the benefits of its collegiate decision making. Lonsec said it considers “fundamental, ‘bottom-up’ active research to be a core competency of Aberdeen’s investment team.  Extensive contact with company management is the cornerstone of the research process and while teams are organised along regional lines, it is common practice for analysts across various regional offices to visit companies external to their primary location. This is a strong differentiating feature from many peers and in Lonsec’s view, adds considerable depth to the process.”

The Aberdeen Ex-20 Australian Equities Fund was launched in August 2014. It is a concentrated portfolio of around 20-60 companies that are primarily listed on the ASX, excluding the largest 20. Its one-year performance (to 30 September 2015) has seen it deliver a net return of 14.86%, outperforming the S&P/ASX 300 Acc Index (Ex-20 Leaders) by 9.95%.

Rob Penaloza, Aberdeen’s Head of Australian Equities, said:

“This Fund gives us an opportunity to deliver value to clients looking for an alternative or a complement to their large cap Australian equities exposures.

“There are some compelling reasons for investing outside the top 20 Australian stocks. Our research shows that alpha potential for active Australian equity managers increases when you exclude the largest 20 companies from the ASX 300 index. That’s partly because these companies are heavily researched, making it more difficult to uncover new information and exploit inefficiencies. They are also heavily skewed to the Financials sector, creating a challenge for diversification. An ex-20 fund can reduce risk by offering greater diversification across a more equally weighted universe.”

Aberdeen has been actively advertising and promoting its Ex-20 Fund recently. It is currently available on platforms including AMP North, BT Wrap, Asgard, IOOF Pursuit and Macquarie Wrap.

Source: Aberdeen Asset Management

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