Oct. 2 () –
The investment firm Abrdn has opted for alternative and unusual assets such as copyright, among others, since “they can be resilient and achieve returns of around 10% in different economic scenarios”, including the current one, with high inflation .
Abrdn remains “cautious” when investing in more traditional asset classes to achieve long-term returns, as explained by the firm’s manager, Kennet McMillan, in an interview with Europa Press.
Thus, the firm prefers alternative assets due to their “attractive” risk-adjusted return, in addition to their “resilient” nature in different economic scenarios, including high inflation.
An example of these assets is copyright, to which Abrdn gains exposure by investing in the listed company Round Hill Music with his multi-asset funds.
With a portfolio of songs by artists such as Katy Perry, Bon Jovi, Celine Dion or The Beatles, among others, Abrdn estimates that the potential annualized returns are between 9% and 11%, to which is added a dividend yield of 4.5%.
Other asset classes in which the firm invests with its multi-asset funds are renewable energy infrastructure, with which it expects a return of between 7% and 9%; pharmaceutical patents, with an estimated return of between 8% and 9% per year, or emerging market bonds issued in local currency, which have “moderate” volatility compared to equities and reduce potential losses to 10 % vs. 42% median for shares.
The objective, as explained by McMillan, is to achieve great diversification and for the fund’s return to be the result of the behavior of various asset classes.
The manager has emphasized that it is important for management to be flexible in these cases, with the ability to reduce or increase exposure to some assets or others to take advantage of the best opportunities.
HEADWINDS IN THE GLOBAL ECONOMY AND HIGH INFLATION
Abrdn considers that the global economy is facing multiple “headwinds”, with inflation that will remain high in the coming months, at the same time that central banks raise rates and tighten financial conditions and that the probability of a recession increases .
The increase in the odds of recession is a constant among the latest perspectives of investment firms, which already have negative growth figures for the first months of 2023 in Europe.
In this context, Abrdn prefers to position himself “cautious” in traditional asset classes and bet more on infrastructure, which has attractive returns linked to inflation.
BAD YEAR FOR INVESTORS IN FUNDS
Investors in mutual funds have not had a very good year due to the uncertainty in the markets caused by the war in Ukraine, high inflation rates and rate hikes by central banks.
Specifically, Abrdn’s multi-asset funds have left 3.89% so far in 2022, in the case of the Aberdeen Standard Sicav I Diversified Growth Fund, and 4.46%, in that of the Aberdeen Standard Sicav I Diversified Income Fund.
However, this fall is less pronounced than that of the average of national funds, which in the first months of the year registered a fall of 9.13%, according to the latest data from the employers’ association Inverco.
