Ask The Experts: Quality Companies with Strong Balance Sheets Key to Surviving Debt Crisis
Jeremy Whitley, Head of UK and European Equities at Aberdeen Asset Management, explains the qualities he looks for when selecting companies for the Aberdeen European Opportunities Fund.
What are your thoughts on the on-going Eurozone debt crisis and what is the base case the team is working with?
- Will take a number of years to solve the sovereign debt crisis
- Fund invests in the best quality companies that operate internationally
Given the uncertainty surrounding equity markets for most of 2011, how did you position the fund over the past year and are you making any changes to the fund's positioning since investor sentiment started picking up in 2012?
- Not short-term investors and always take a long-term view (typically 7 to 8 years) when investing in companies
- Will take advantage of movements in the markets such as during the height of the Eurozone debt crisis in 2011
The fund has a pretty strong record over the last three years relative to its benchmark. What were the main reasons for this outperformance?
- Have invested in the right type of companies
- Strong business models, sustainable cash generating capabilities, pricing power
Can you briefly talk us through the rationale behind the fund's top two holdings (Aberdeen European Smaller Companies Fund, Nestle)?
- Largest holding in Aberdeen European Smaller Companies Fund as it shares the same investment process and offers further diversification
- Second largest holding in Nestle, which is a global food company with good operations and innovations
- An example is Nespresso which made 200 million sales in Swiss francs in 2000 and 3.5 billion sales in 2011. Research and development of Nespresso took 15 years in total
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