0207 GEM SmlCap Brochure A4 NEW.indd - Aberdeen Asset ...

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0207 GEM SmlCap Brochure A4 NEW.indd - Aberdeen Asset ...

Aberdeen Global-Emerging Markets Smaller Companies FundUncovering Opportunities in Emerging Markets


Aberdeen Global-Emerging MarketsSmaller CompaniesFundAberdeen Global-Emerging Markets Smaller Companies Fund is a new launch fromthe highly regarded Global Emerging Markets Team at Aberdeen Asset Managers.The Fund aims to provide long-term capital growth from investment in a diversifiedportfolio of listed smaller companies which have significant activities in emergingmarkets worldwide.Why Aberdeen?Aberdeen Asset Management PLC is an international investmentmanagement group, managing assets in excess of US$148 billionfrom offices around the world. It was founded in 1983 and hasbeen listed on the London Stock Exchange since 1991. We operateas an independent company and asset management is all that wedo, freeing us of the conflicts of interest that can affect integratedfinancial groups.Aberdeen is a pioneer in Global Emerging Markets (GEM) withdedicated investments in these markets since 1987 and todaymanaging over US$7 billion in the asset class.Our investment philosophy and process is robust and effectiveand is ideally suited to emerging markets. The central tenet ofour philosophy is that, over the long term, share prices reflectunderlying business fundamentals. The strengths in our approachare:• Active management: stock selection is the key source ofequity alpha and we aim to add value by identifying goodquality securities which are attractively priced.• Proprietary research: we always visit companies beforeinvesting, making thousands of visits per annum. If a securityfails our screens, we will not own it.• Long-term focus: we are a long only fund manager with afocus on absolute returns.• Team approach: the emphasis is on collective wisdom not thecultivation of ‘stars’.Why Global Emerging Markets?The case for GEM is compelling. From a macro perspectiveemerging markets are set to grow faster than developed markets:• Positive demographics: younger populations are giving rise toan increasing workforce and underpins the case for long termgrowth in domestic consumption.• Stronger economies: over the last few years, helped by risingcommodity prices and falling interest rates, the health ofmany GEM economies have improved significantly.• Orthodox economic policies: more emerging marketpolicymakers eschew more populist measures acceptingthe need to build confidence in their economies to fosterinvestment and growth.• Emerging markets are undervalued: emerging economiesrepresent 80% of the world’s population, 66% of its FXreserves, 50% of GDP but just 7% of its market capitalisation.At a micro or company level the fundamentals have also improved:• Healthy corporate balance sheets: emerging marketcompanies have restructured over the last few years allowingthem to pay down corporate debt.• Improved profit margins: better disciplined management,supported by improved business conditions has yielded higherprofit margins and cashflow.• Better corporate governance: emerging market companiesare more aware of shareholder value and disclosure standardshave substantially improved.We do not trade, but invest for the long-term – and only incompanies that we understand and can value.“We believe that GEM small caps offer excellent prospects for long-term growth. The low coverage of the asset classand market inefficiencies benefit our proprietary research and disciplined investment process, enabling us to construct arigorously evaluated portfolio of strong companies at attractive valuations.”DEVAN KALOOHead of Global Emerging Markets1 Aberdeen Global-Emerging Markets Smaller Companies Fund


Aberdeen Global-Emerging MarketsSmaller CompaniesFundWhy a Global Emerging Markets Smaller Companies Fund?• Smaller companies are under-researched: institutional research of GEM smallercompanies is largely absent, therefore Aberdeen’s proprietary research capabilities areinvaluable.• Mispricing: the lack of investor attention to smaller companies means that marketscan be inefficient in pricing companies in the short term which creates an investmentopportunity.• Size of investment universe: the size of the investment universe is huge andgrowing, with over 1,200 companies in the proposed MSCI Emerging Markets SmallCap Index.• Corporate activity: the large number of healthy companies on attractive valuationsin emerging markets suggests corporate activity is likely to increase.• Less vulnerability to external factors: as smaller companies tend to be moreexposed to domestic activity they are less vulnerable to external slowdown.• Accessibility: a pooled fund provides investors with a spread of risk and access toilliquid situations with long-term attractions.• Launch of dedicated index: MSCI is to launch an Emerging Markets Small CapIndex (scheduled for June this year) which will aid the asset class to become moremainstream.Fund objectiveThe Fund’s investment objective is to provide long-term capital growth from direct orindirect investment in a diversified portfolio of which at least two-thirds will be investedin equities and equity-related securities of smaller companies listed on emerging stockmarkets worldwide or smaller companies with significant activities in emerging markets.The Investment Manager shall determine what constitutes a “smaller company” from timeto time. The base currency of the Fund is US Dollars.Key fund informationSectorEquity Emerging Markets GlobalDomicileLuxembourgFund ManagerGlobal Emerging Markets TeamFund TypeSICAV (UCITS III)CurrencyUS DollarMinimum Investment Class A Shares US$1,500Charges ‘A’ Shares Initial 4.25% / Annual 1.75%Fund Advisory CompanyAberdeen Asset Managers LimitedKey launch datesDateAction12 March - 23 March Initial subscription period23 March Initial subscriptions dealt at initialprice (US$10)26 March First day of dealingPortfolio parametersMarket Cap CeilingUS$2.5bnPortfolio Volatility 15-25%Tracking Error 6-15%No of Stocks 30-70Absolute Stock Position 10%Absolute Industry Position 30%Absolute Country Position 30%Model portfolio regional allocationAsia 63.0%Europe, Middle East& Africa18.0%Latin America 16.0%Cash 3.0%Total 100.0%Model portfolio sector allocationConsumer Discretionary 22.0%Consumer Staples 10.5%EnergyNilFinancials 27.5%Healthcare 4.5%Industrials 14.0%Information Technology 4.0%Materials 11.0%Telecom Services 1.5%Utilities 2.0%Cash 3.0%Total 100.0%Aberdeen Global-Emerging Markets Smaller Companies Fund 2


Aberdeen’s GlobalEmerging MarketsInvestmentTeamAberdeen’s long established Global EmergingMarkets Team has strength in depth with over 20investment professionals actively researching thebest opportunities from offices around the globe.Hugh YoungHead of EquitiesDevan KalooHead of Emerging MarketsLondon Singapore Bangkok Kuala LumpurAndrew BrownMark ButlerEdward ConroyMark Gordon JamesJoanne Irvine*Devan Kaloo*Fiona MorrisonWilliam RickardsCentral Dealers:Russell Clements,Derek McCole,Mandy PikeKasarin ChakkaphakFlavia CheongKristy FongAndrew GillianPeter Hames*Kwok Chern YehAdrian LimLydia TjhiaJeremy WhitleyChristopher WongNicholas YeoHugh YoungBoo Siew Yan, ChengHui Fang, Felicia Lee,Emerald Rosasillfiani,Tan Shuyun, EuniceTohOrsen KarnburisudthiRobert Penaloza*RatanawanSaengkitikomolAdithep VanabriskshaWasana ChinomiCentral Dealer: JiraVereewattanasakCentral Dealers:Richard Ang, SaritaBajaj, Geraldine Ng,Marcus Tan*Head of deskInvestment support staffSource Aberdeen Asset Management Asia Limited, Nov 06Gerald Ambrose*VicknesanBalakrishnanJalil RasheedFor further information, including dealing arrangements, please visithttp://www.aberdeen-asset.com/aam.nsf/institutional/gemlaunchAlternatively contact your Aberdeen representative or call us on +44 (0) 207 463 6122.OTHER IMPORTANT INFORMATION:The value of any holdings in other collective investment schemes managed by any subsidiary of Aberdeen AssetManagement PLC is excluded for the calculation of management charges. The Fund is a sub-fund of Aberdeen Global, anopen-ended investment company incorporated with limited liability under the laws of the Grand Duchy of Luxembourgand organised as a societe d’investissement a capital variable (a ‘SICAV’) with UCITS status (an Undertaking for CollectiveInvestment in Transferable Securities as defined in the European Union Directive 85/611 of 20 December 1985, asamended). Nothing herein constitutes investment, legal, tax or other advice and is not to be relied upon in makingan investment or other decision. No recommendation is made, positive or otherwise, regarding individual securitiesmentioned. Asset allocations are subject to change and yields may fluctuate. This is not an invitation to subscribe forshares in the Fund and is by way of information only. Subscriptions will only be received and shares issued on the basis ofthe current Prospectus or Simplified Prospectus for the Fund. These can be obtained from Aberdeen Unit Trust ManagersLimited, 10 Queen’s Terrace, Aberdeen, AB10 1YG. This document is only available for distribution in any jurisdictions wherethe Fund has been authorised for sale. Issued and approved by Aberdeen Asset Managers Limited which is authorised andregulated by the Financial Services Authority.RISK FACTORS YOU SHOULD CONSIDERBEFORE INVESTING:• The Fund invests in emerging marketswhich tend to be more volatile thanmature markets and the value ofyour investment could move sharplyup or down. In some circumstances,the underlying investments maybecome illiquid which may constrainthe Investment Manager’s ability torealise some or all of the portfolio.The registration and settlementarrangements in emerging markets maybe less developed than in more maturemarkets so the operational risks ofinvesting are higher. Political risks andadverse economic circumstances aremore likely to arise, putting the value ofyour investment at risk.• The value of shares and the incomefrom them can go down as well as upand you may get back less than theamount invested.• Movements in exchange rates canimpact on both the level of incomereceived and the capital value of yourinvestment. If the currency of yourcountry of residence strengthensagainst the currency in which theunderlying investments of the Fund aremade, the value of your investment willreduce and vice versa.• Past performance is not a guide to thefuture.• If insufficient income is generatedby the Fund to cover the manager’speriodic charge, the balance will bededucted from the Fund’s capital andto that extent will constrain capitalgrowth.• Derivatives may be used to hedgeagainst various risks as permitted bythe regulations but may not be usedfor speculative purposes. The use ofderivatives for hedging in a risingmarket may restrict potential gains.• When cancellation rights apply, andyou exercise them, you may not getback the full amount you invested ifthe share price falls before we receivewritten confirmation that you wish tocancel the contract.3 Aberdeen Global-Emerging Markets Smaller Companies Fund

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