Aberdeen European Opportunities Fund - Aberdeen Asset ...

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Aberdeen European Opportunities Fund - Aberdeen Asset ...

Aberdeen European Opportunities Fund

Interim short report

For the six month period ended 31 January 2010

Investment objective and policy

The Fund aims to maximise long-term total return through a portfolio of investments in European

companies, which the Manager believes will benefit from economic, political or technological

developments within Europe.

Risk profile

Shareholders should be aware of the risks inherent in investing in securities and other financial

instruments. Financial markets can be vulnerable to unpredictable price movements and are affected by

a number of factors.

The value of your investment and the income derived from it will rise and fall due to market and

company specific factors.

The specific risk warning relating to this fund is as follows:-

• The value of your investment will rise or fall with any movement in exchange rates.

Cumulative performance (%)

Period of report

31/07/2009 to

31/01/2010

Since launch

5 years

31/01/2010 C 31/01/2010 C

31/01/2005 to 05/04/2001 to

Fund - A Accumulation 11.45 16.16 15.85

Benchmark A 11.09 49.71 45.05

Annual discrete performance to 31 January B

31/01/2009 to

31/01/2010

31/01/2008 to

31/01/2009

31/01/2007 to

31/01/2008

31/01/2006 to

31/01/2007

31/01/2005 to

31/01/2006 C

% Change 27.29 -29.38 -8.31 16.05 21.43

Source: Lipper, Total Return, NAV to NAV, UK Net income reinvested, £.

A

FTSE Europe ex UK Index.

B

Figures are as at valuation point.

C

Figures for Aberdeen European Opportunities Unit Trust prior to 16 December 2005.

Please remember that past performance is not a guide to future returns. The price of shares and the

income from them may fall as well as rise. Investors may not get back the amount originally invested.

Aberdeen European Opportunities Fund is a sub-fund of Aberdeen Investment Funds ICVC, an openended

investment company (‘OEIC’) authorised under the Financial Services and Markets Act 2000.


Market review

Continental European shares joined the general rise in global stockmarkets during the six months under

review, amid optimism over the region’s economic rebound and a G-20 commitment to maintain

stimulus measures. Easy credit resulting from the European Central Bank’s (ECB) loose monetary policy

fuelled the rally, but sell-offs in the middle and at the end of the reporting period trimmed the gains.

Dubai’s debt woes, as well as Greece’s fiscal difficulties intensified risk aversion that sparked a flight

to quality. Credit tightening in China and uncertainty over proposed banking curbs in the US further

dampened sentiment. Compared to the rest of the world, European equities lagged most asset classes

in developed markets, except for Japan.

Portfolio review

The Fund outperformed the benchmark during the review period due to positive stock selection.

At the stock level, our German holdings, such as MTU Aero Engines and Wincor Nixdorf were the

biggest contributors to relative return. MTU performed well, on signs of a recovery in global air traffic;

the aircraft engine manufacturer also benefited from robust earnings, helped by improved profitability

in their commercial maintenance division. Wincor Nixdorf, which manufactures bank machines and

cash registers, was aided by healthy earnings, as resilient software sales and services offset weak

demand for hardware. Our lack of exposure to Volkswagen also contributed to relative return, as its

share price came under pressure after agreeing with Porsche to create an integrated company that

would involve a large capital increase.

On the other hand, Vienna Insurance, Nordea Bank and BMW detracted from relative performance.

Vienna Insurance was dragged down by concerns over the health of several Eastern European

economies which it has exposure to. Despite the short-term volatility, the insurer continued to deliver

solid operational results, while structural growth in these markets remains attractive in the longer term.

Nordea Bank underperformed following a particularly strong run during the previous period. The bank’s

operational performance remained solid, although concerns over the uncertain economic environment

weighed on its share price. BMW was hurt by the challenging operating environment, as demand for

luxury cars in most of its markets waned. It is, however, expected to benefit from new product launches

in 2010.

In portfolio activity, we introduced Vienna Insurance Group, a domestic market leader with solid

exposure to Eastern European growth markets. Against this, we sold AstraZeneca and Belgacom, owing

to their challenging revenue outlooks, and Skand Enskilda Banken, given loan book risks.

Outlook

Sovereign debt risk is likely to continue to weigh on sentiment in the short term, although monetary

and fiscal conditions are expected to remain supportive. As it is, the ECB may have to postpone the

withdrawal of emergency lending measures, given that budget deficit problems have severely eroded

confidence in Europe’s economic rebound. Other significant risks include rising unemployment and

a banking system that is still working through its excesses. The region’s longer-term performance

will hinge on whether policymakers can fix worryingly high public-sector debt without derailing the

recovery, and whether corporate revenue growth can meet expectations.

2 ABERDEEN EUROPEAN OPPORTUNITIES FUND


Portfolio breakdown

Portfolio of investments As at 31 January 2010 % As at 31 July 2009 %

Austria 5.85 4.06

Belgium – 1.80

Denmark 1.71 1.04

France 21.12 19.22

Germany 25.67 26.40

Italy 8.86 8.65

Netherlands 7.23 6.45

Portugal 1.45 2.03

Spain 5.68 5.80

Sweden 5.11 9.84

Switzerland 15.34 12.70

Investment assets 98.02 97.99

Net other assets 1.98 2.01

Net assets 100.00 100.00

Report and accounts

Copies of the annual and half-yearly long form report and accounts for this Fund are available free of

charge on request to Aberdeen Unit Trust Managers Limited.

ABERDEEN EUROPEAN OPPORTUNITIES FUND 3


Fund facts

Interim/annual

accounting dates

Income

payment dates

31 January, 31 July 31 October

Total expense ratio %

as at 31/01/2010

Total expense ratio %

as at 31/07/2009

Share class A 1.77 1.93

Share class I 1.27 1.43

A total expense ratio is a figure representing all operating charges and expenses as a percentage of the Fund’s value. It includes the

annual management fee as well as all the administrative costs incurred by the Fund.

Performance summary

Net asset value

as at 31/01/2010

pence per share

Net asset value

as at 31/07/2009

pence per share

Net asset value

% change

Share class A - Accumulation 101.30 90.73 11.65

Share class I - Accumulation 103.31 92.45 11.75

Net of tax and expenses.

Performance record

Calendar year Highest share price (p) Lowest share price (p)

2005 A Accumulation A 103.50 100.70

2005 A Accumulation I 103.50 100.70

2006 Accumulation A 120.80 101.40

2006 Accumulation I 121.70 101.80

2007 Accumulation A 135.90 118.10

2007 Accumulation I 137.10 119.20

2008 Accumulation A 131.01 71.85

2008 Accumulation I 132.70 72.94

2009 Accumulation A 111.67 65.39

2009 Accumulation I 114.03 66.49

2010 B Accumulation A 112.79 101.30

2010 B Accumulation I 115.19 103.48

A

A The Fund was launched on the 16 December 2005, when Aberdeen European Opportunities Unit Trust and DWS European

Opportunities Fund, a sub-fund of DWS Investments II amalgamated into the Fund.

B

to 31 January 2010.

4 ABERDEEN EUROPEAN OPPORTUNITIES FUND


Top ten holdings

% of Fund as at

31/01/2010

% of Fund as at

31/07/2009

BNP Paribas 3.95 Nordea 4.10

Nestle 3.65 BNP Paribas 3.72

Roche Holdings 3.50 Linde 3.17

Nordea 3.45 Nestle 3.06

Zurich Financial Services 3.27 Mapfre 2.98

MTU Aero Engines 3.20 ENI 2.97

Casino 3.18 OMV 2.84

ENI 3.01 BBVA 2.82

Mapfre 2.99 Zurich Financial Services 2.80

Linde 2.94 GDF Suez 2.74

ABERDEEN EUROPEAN OPPORTUNITIES FUND 5


Other information

Amalgamations

The Aberdeen European Opportunities Fund amalgamated into the Aberdeen European Growth Fund, a

sub-fund of Aberdeen Investment Funds ICVC, on 12 March 2010.

Change of Fund name

On 12 March 2010, the Aberdeen European Growth Fund’s name changed to the Aberdeen European

Equity Fund.

ISA allowance from 6 April 2010

Within government regulations, you may subscribe to two different types of ISA: a Stocks and Shares

ISA and a Cash ISA. From 6 April 2010 the higher limit of £10,200 per tax year applies to all eligible

ISA investors who can invest:

• a maximum of £10,200 each tax year in a Stocks and Shares ISA. Aberdeen UK OEIC funds qualify

as a Stocks and Shares ISA (with the exception of the Cash Fund), or split their ISA allowance and

invest.

• up to £5,100 in a Cash ISA and up to £5,100 in a Stocks and Shares ISA each tax year. Aberdeen

does not offer a Cash ISA.

Please refer to Aberdeen’s UK OEIC fund range Simplified Prospectus for further information.

The information in this report is designed to enable shareholders to make an informed judgement on

the activities of the Fund during the period it covers and the results of those activities at the end of

the period. The naming of specific shares or bonds is not a recommendation to deal in them. The views

expressed are those of Aberdeen Unit Trust Managers Limited and should not be construed as advice

either to buy, retain, or sell a particular investment. Investment in the Fund should generally be viewed

as a long-term investment.

Further information about the activities and performance of the Fund is available at

www.aberdeen-asset.co.uk or by calling our Customer Services Team on 0845 300 2890. The

Prospectus and Simplified Prospectus of Aberdeen Investment Funds ICVC, which provide full

information on all funds in Aberdeen’s UK OEIC range, is also available on our website or on request.

Aberdeen Unit Trust Managers Limited only provides information about its own products and will not

give individual financial advice. If you are in any doubt about the suitability of a product to meet your

financial needs, then you should seek the advice of a Financial Adviser.

6 ABERDEEN EUROPEAN OPPORTUNITIES FUND


Appointments

Authorised Corporate Director (ACD)

Aberdeen Unit Trust Managers Limited

10 Queen’s Terrace

Aberdeen AB10 1YG

Depositary

The Royal Bank of Scotland plc

Trustee & Depositary Services

Ground Floor

15 Bishopsgate

London EC2P 2AP

Auditor

KPMG Audit PLC

Saltire Court

20 Castle Terrace

Edinburgh EH1 2EG

Investment Advisers

Aberdeen Asset Managers Limited

Bow Bells House

1 Bread Street

London EC4M 9HH

Registrar

International Financial Data Services

(UK) Limited

IFDS House

St Nicholas Lane

Basildon

Essex SS16 5FS

(the register of shareholders can be

inspected at this address)

Cert no. SA-COC-1605


Contact us

Phone

(Lines are open 9:00am to 5:00pm, Mondays to Fridays, excluding bank holidays)

Dealing 0800 833 580

Customer Services 0845 300 2890

Broker Desk 0800 592 487

Post

All enquiries

Aberdeen Unit Trust Managers Limited,

PO Box 9029,

Chelmsford, CM99 2WJ

For more information on Aberdeen Asset Management PLC and our product range

please visit www.aberdeen-asset.com

Issued by Aberdeen Unit Trust Managers Limited, authorised and regulated by the Financial

Services Authority. A member of the Aberdeen Asset Management group of Companies.

03 1092_0310

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