Aitken Ross from Liontrust is our Fund Manager of the Month
13 NOV, 2024
By Jose Luis Palmer from RankiaPro Europe
Aitken Ross is a fund manager who joined Liontrust in April 2017 as part of the company's acquisition of Alliance Trust Investments (ATI).
Aitken started his career on the Alliance Trust Management Training programme in September 2010 after graduating in Accountancy and Finance (First Class Honours) from Dundee University and subsequently completing an MA in International Financial Analysis (Distinction) at Newcastle University. Following a successful period as an analyst within the team, Aitken became a named fund manager and is a CFA Charterholder.
Why and how did you go into the financial sector, have you had/did you consider a different type of role/career?
I always had a preference for numbers growing up, maths and logic over the likes of English for example. After a few dislocated shoulders, I knew the option of a professional rugby player would never materialise (I don’t think I was any good either), so accountancy seemed like the logical next step at university. Studying accounting and finance, I became more familiar with the world of finance and investment and found a particular interest in the latter. Every day can bring something new – trying to understand the world and how it is evolving, how companies operate across the globe and how they will perform in any given environment and so on. Distilling this information down to create a portfolio that performs for clients was a very appealing job career wise.
What is your view of the current macroeconomic environment & how should investors orient their portfolios in this environment?
The current view from the desk is that a continued weakening of the macro-economic environment, specifically across Europe, will accelerate the need for central bank cuts, in turn leading to strong positive returns from fixed income. Inflation looks to be under control and heading back to (if not below) target. Aggregate demand and growth are fairly benign, particularly within European manufacturing, which in turn is leading to a declining demand for labour and downward pressure on wages. Furthermore, this is resulting in falling confidence by the underlying consumer base, who continue to delay purchasing intentions, preferring instead to save. This should incentivise central banks to cut faster than is currently priced, leading yields to fall, and therefore we retain a preference for duration through our portfolios. Corporates are generally well positioned, underlying metrics remain robust, albeit they have come off their peak in recent months. We still believe that corporate credit offers value and are positioned as such.
What differentiates your Fund from others and what advantages does it bring to an investor’s portfolio in the current scenario?
Our process in relation to sustainability has been going for over 23 years. We believe that by understanding how the world is evolving from an environment and social perspective, it allows us to identify those companies that will be more resilient over time. Combining this underappreciated information with robust credit metrics allows us to position the portfolio behind high quality companies with conviction. Benefiting from the confidence of investing behind high quality sustainable companies, we have the conviction to create a focused portfolio that allows us to generate strong levels of alpha from stock and sector selection within our funds. These factors, combined with active duration management, are the key advantages that differentiates our funds.
Can you give us an example of a position that you have held for a long time in your portfolio for a long time and why?
Zurich is an example of a longstanding position that combines both high quality credit fundamentals and strong sustainability credentials, such as providing insurance that helps generate economic growth through the provision of a safety net that gives people and business the confidence to invest for the future. Most critically Zurich’s bonds have and continue to offer value.
What macroeconomic data is most important to your process?
I don’t believe there is any one singular piece of macroeconomic data that is the most important to process. Trying to understand the evolution of all the macroeconomic inputs, understanding why, and how this may change over time is probably the key to our process. Positioning is determined by the team’s collective view on where we believe the data will go and positioning accordingly. It is not reactive to a singular piece of data.
What do you consider most important when including a position in your portfolio?
Balancing risk and potential return is of great importance to the Fund. Understanding how the different components of a fixed income fund can move in tandem or isolation is key to generating strong consistent returns over time. So, when adding a new position to the Fund, it is critical to understand not only the potential return dynamics but how this will impact the potential risk / return characteristics of the Fund as a whole.
What do you like to do in your free time?
When the time (and weather) allow I like to spend my free time hiking in the highlands of Scotland. In today’s hectic and fast paced environment, I like to disappear into the highlands and find a nice quiet spot to enjoy some peace and tranquillity in one of the most beautiful places on earth. (Below is picture I took from the Scottish highlands.)
