Aberdeen Life Global (ex UK) Equity Fund
Formerly Aberdeen Life Overseas Equity Fund
Objective
To provide exposure to an actively managed portfolio of overseas equities - an asset class that is expected to provide long-term returns that are ahead of inflation.
Manager's Quarterly Report
July 2010
Market review
- Global equities fell in the three months to the end of June, reversing gains from the first
quarter. Optimism about the global economy faded as Europe’s fiscal woes took centre stage.
China’s attempts to rein in its housing market also added to anxiety.
Greece was eventually bailed out by the Eurozone and the IMF, while regional governments
backtracked from expansionary fiscal policies in favour of ambitious austerity plans. The
normalisation of monetary policies was also postponed.
With the exception of emerging markets, most central banks in Asia raised interest rates and
Brazil became the first in Latin America to increase borrowing costs in over a year.
Fund review
- During the quarter, we sold Italian lender Intesa Sanpaolo, on concerns over the European
banking sector. We also pared back chip manufacturer Intel and French electrical specialist
Schneider Electric, following relatively strong share price performance.
In contrast, we topped up Brazilian lender Banco Bradesco, tobacco company Philip Morris and
UK-based oil producer Royal Dutch Shell because of their attractive valuations. We also added
to Swiss drugmaker Novartis, US-based retail pharmacy CVS Caremark and chip foundry TSMC
on attractive fundamentals.