abrdn launches the SICAV version of the Emerging Markets Income Equity Strategy fund

abrdn has announced the launch of the fund abrdn SICAV I - Emerging Markets Income Equity, which will be managed by Matt Williams and the portfolio construction group in London and Singapore. The aim of the fund is to achieve a combination of growth and income by investing in emerging market equities. The team seeks healthy companies characterized by profitable growth and for this they use cash flow analysis, prioritizing companies based on their ability to pay dividends, depending on the stage they are at within their investment cycle.

Investment approach

To build the portfolio, the fund adopts a balanced approach based on two pillars: 50% is allocated to high dividends and 50% goes to companies with growing dividends. The aim of this approach, coupled with agnostic stock selection across the entire universe of emerging markets, is to provide a larger (and growing) source of income in various types of market environments, as well as to take advantage of the characteristics of markets both on the upside and downside. As for portfolio risk, the objectives consist of prioritizing the team's specific perceptions about values and providing diversification of income ideas, while seeking to cushion risks by countries and sectors. The fund is not subject to a concentrated group of high-yield securities to achieve profitability.

Investing in emerging markets is usually associated with growth rather than income. However, data shows that there are currently as many companies paying dividends in emerging markets as in developed ones. With extensive experience in this market, we see an income universe that is particularly attractive for active investors with an absolute return mindset. The increase in profits and the capitalization of dividends in emerging market equities can constitute a powerful combination in portfolios. That's why we are delighted to launch the SICAV and thus be able to offer this opportunity to more investors.

Matt Williams, Investment Director at abrdn

We have been investing in emerging market equities for 36 years. Matt and the portfolio construction group rely on a very experienced emerging equity team with numerous resources. Our presence in emerging markets helps to support the fund's total capitalization approach, exploiting new income opportunities in small-cap and frontier markets.

Devan Kaloo, Global Head of Equity at abrdn