Abrdn announced the launch of abrdn Sicav I - Emerging Markets Income Equity Fund on Wednesday 10 April 2024, marking a new investment offering. This new fund mirrors an existing strategy initially launched in 2012 under a UK investment vehicle, stated Abrdn in the press release. Managed by lead fund manager Matt Williams and a dedicated portfolio construction group based in London and Singapore, the strategy aims to provide investors with a blend of growth and income opportunities within emerging markets equities.

Abrdn noted that the fund adopts a nuanced approach, focusing on identifying robust businesses with sustainable growth prospects. By analysing cash flow and prioritising companies based on their dividend-paying ability relative to their investment cycle, the team aims to deliver consistent returns over time. A key aspect of the fund’s strategy is its balanced two-pillar approach, with 50% allocated to high dividend stocks and the remaining 50% to dividend growth stocks.

Matt Williams, senior investment director at Abrdn, emphasised the unique income potential within emerging markets, stating, “Emerging market investing is often associated with growth rather than income. However, data shows that there are now as many companies paying dividends in emerging markets as in developed markets.” Williams highlighted the strategy’s focus on total return, saying, “The growth of earnings and the compounding of dividends in EM equities can make for a powerful combination in portfolios,” to create a compelling proposition for active investors.

The fund’s risk management framework prioritises stock-specific insights while diversifying income ideas to mitigate country and sector risks. This approach aims to provide a stable income stream without relying heavily on a concentrated group of high-yielding stocks for performance, said Abrdn in the press release.

Devan Kaloo, global head of equities at Abrdn, underscored the firm’s extensive experience in emerging market equities, with a track record spanning 36 years. Kaloo highlighted the fund’s all-cap approach, which leverages insights from the firm’s on-the-ground presence in key emerging market countries to identify income opportunities across small-cap and Frontier markets.

As of the end of 2023, Abrdn managed and administered nearly €500bn of client assets.