The investments will be made via the Aberdeen Global – Brazil Fund (3%) and the Aberdeen Global – India Fund (3%).
The 6% will funded by the company selling its 6% holding in Japanese equities although Mike Turner, head of global strategy and asset allocation at Aberdeen AM, is not completely downcast on the prospects for Japan.
He commented: “Our Japanese equity exposure has performed well for the fund and we remain optimistic about the prospects of selective Japanese companies. However, the existing problems of an ageing population and an unsustainably high debt burden in the context of an increasing reliance on external funding represent a huge challenge for policy makers.
“Against this background, a longer-term negative view on Japanese assets arguably remains justified.”
As is Aberdeen AM’s way, the Diversified Growth Fund is managed by a nine-strong team and aims to beat 1-month Libor + 4.5% over the medium term. This latest investment is in funds run by Aberdeen’s in-house global emerging markets (the Brazil fund) and Asia Pacific (India fund) equity teams.
The current allocation is 18% in Asian and emerging equities, with 5% in Asian bonds and a further 5% in emerging market bonds.
Turner added: “While mindful of the headwinds for the global economy, in particular the eurozone crisis, equity valuations are reasonable. Furthermore, our Asia Pacific and emerging market equity teams’ bias towards financially strong, wee-run, domestic growth-oriented companies offers us comfort should economic conditions worsen.”
