Understanding The Fund: Aberdeen Asian Local Currency Short Duration Bond Fund or “Shorty”
Adam McCabe, Senior Portfolio Manager at Aberdeen Asset Management Asia Limited, explains the investment process and strategy behind the Aberdeen European Opportunities Fund.
How long have you been with Aberdeen Asset Management and what do you think was the biggest challenge you faced since the Aberdeen Asian Local Currency Short Duration Bond Fund was launched in April 2011?
- Joined in 2009; fund was launched in March 2011
- Most difficult period so far was third quarter of 2011 when investors were looking to build precautionary pools of USD liquidity to preserve capital and speculators were anticipating outflows from local currency bond markets
- While it was a period of volatility, fundamentals remained in place
- Policymakers have demonstrated the capability and willingness to respond in times of uncertainty
How many members are there in the investment team and where is the team based?
- Team primarily based in Singapore; 7 members in team managing "Shorty"
- Singapore team is complemented by other teams located in Bangkok and Kuala Lumpur
- All part of the Asian Fixed Income team which comprises 17 investment professionals
How many holdings does the fund have, and how many issuers does it have exposure to?
- Portfolio has 65 issues
- Portfolio takes a conservative stance, investing primarily in Asian sovereign bonds, Asian quasi-sovereign bonds and supranational bonds
- At current moment, the fund is fully invested in Asian sovereign bonds. Hence number of issuers is the governments in Asia which is 10
Is there a maximum exposure the fund can have to a single issuer?
- Fund is restricted to holding up to 35% in any country or currency, or the benchmark weight plus 20%
- The fund does not have any exposure to corporate bonds
What is the fund's approach with regards to currency management? Also, how much of the fund's returns are driven by currency positions?
- Currency exposure is treated as a separate asset class; management of bonds in the portfolio is separated from their currency exposure
- Such a strategy is highly flexible to changing economic conditions and external influences
Lastly, what is the maximum cash level the fund can hold?
- No hard and fast limit with respect to cash
- Portfolio tries to be fully invested at all times to give investors the exposure they desire when they invest in the fund
- Does not affect the liquidity of the fund as the bonds the fund invests in are considered very liquid instruments
||28 May 2012
||Understanding The Fund: Aberdeen Asian Local Currency Short Duration Bond Fund or “Shorty”