MARTIN Gilbert, chief executive of fund manager Aberdeen Asset Management, is expected to report a strong start to the financial year this week amid a flow of investment away from low-yielding bonds and back into shares.
Aberdeen, known as the “go-to” manager for emerging market equities, will deliver a trading update on Thursday at its annual general meeting.
Analysts anticipate a continuation of the strong inflow of funds that was the hallmark of the year to 30 September.
Owen Jones, analyst with Shore Capital, said market rallies in the final three months of last year would certainly benefit Aberdeen.
Although Gilbert will likely remain cautious on the broader outlook for 2013, Graham Spooner of the Share Centre agreed that Aberdeen appeared best-placed to take advantage of current investment trends.
“Investment managers tend to fall in and out of fashion, and Aberdeen is definitely in fashion right now,” said Spooner, who carries a “hold” recommendation on the stock.
Equities are the powerhouse of Aberdeen’s business, while areas such as fixed income, property and money markets have traditionally been weaker. This should suit the prevailing climate, which has seen investors ditching low-yielding bonds in the hope that shares will generate higher returns.
Last week, the Investment Management Association published statistics that showed equity funds notched up their third consecutive month as best-sellers during November, bringing in £720 million.
Meanwhile, fixed-income fund sales sank to their lowest level since October 2008.
Jones at Shore Capital said that Aberdeen will retain the upper hand if that trend continues.
“It would certainly benefit them, which would not be the case if the situation were reversed, with money flowing out of equities and into bonds,” he said.
Figures released last month showed that Aberdeen’s five executive directors shared a £13m salary and bonus pot for the second year running, making them Scotland’s best-paid plc board. Some £2.8m of bonuses was paid in cash, with £8.4m due in shares.
