Money managers and investors must remain true to their investment style and policies despite the difficulties in achieving yield in the current market environment, said Martin Gilbert, CEO at Aberdeen Asset Management.
Speaking at the £331 billion ($520.4 billion) money manager's annual international media conference, held in London, Mr. Gilbert said: “The key thing in markets like this is you don't have a style drift. Whatever you do, you must not cut at the point of maximum pain,” going for stocks that are “going up.”
“If (you are) a quality-driven asset manager like ourselves, you will really struggle. And we are struggling at the moment as quality companies have been left behind.”
However, Mr. Gilbert believes the tide will turn for the Aberdeen's investments “when the shakeout comes.”
Some allocations, however, have benefited Aberdeen, such as a heavy overweight position in India.
The manager was underweight China and the U.S., missing out on the U.S.'s stellar two-year performance.
While China has not been a great performer for “years,” he said, “in the long run, I think China will be a fantastic market to make money. Corporate governance is improving there, companies are becoming better managed, and so I think there is huge scope to make money there. We are seeing better and better opportunities to make money.”
The manager is “top-slicing” its heavy overweight India at the moment, Mr. Gilbert said, “topping up more in the markets that haven't done so well,” such as Singapore and Hong Kong.
At the same conference, Mr. Gilbert also addressed increased regulatory focus and concerns over a bond bubble.
Investors across the globe will be able to ride out the first U.S. interest rate hike so long as they are not forced sellers of assets, he said. While the turn of the U.S. interest rate cycle will cause a “huge market dislocation for a period of time, especially in the credit markets. As long as you don't have to sell, you will be OK. If you have to sell, and there are a number of funds leveraged out there, invested in market credit, there is going to be real pain in the period just after interest rates (rise). But then that will settle down.”