uploads///Portfolio Breakdown of the ALEAX

Portfolio Composition of ALEAX through November 2015


Dec. 28 2015, Updated 2:55 p.m. ET

Aberdeen Latin American Equity Fund

The Aberdeen Latin American Equity Fund Class A (ALEAX) seeks long-term capital appreciation “by investing at least 80% of the value of its net assets in equity securities of Latin American companies. Remaining assets may be, but are not required to be, invested in equity securities that are expected to reflect developments in Latin America.”

The fund’s managers aim to invest across countries from the LatAm region. However, they retain the flexibility to invest a large portion of their assets into a single nation. Managers conduct fundamental analysis to select securities for the portfolio. They also adopt a bottom-up approach, which focuses on individual stocks instead of sector or country trends.

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The fund’s assets were invested across 41 holdings (including cash) as of November 2015, and it was managing assets worth $2.8 million. As of its November portfolio, ALEAX’s equity holdings included Embotelladora Andina (AKO.A), Banco Santander-Chile (BSAC), Tenaris (TS), Bancolombia (CIB), and Grupo Financiero Santander Mexico (BSMX), which formed a combined 12.5% of its portfolio.

Historical portfolios

According to the fund’s sectoral composition for November, financials commanded one-third of its assets and were the single largest sectoral holding. Consumer staples was another large holding, making up a little less than 30% of the fund’s assets. The only other sector whose exposure read in the double-digits was industrials, which formed ~13% of the portfolio. The fund is not invested in the utilities or telecom services sectors.

One notable change in the fund’s portfolio as of November 2015 compared to a year ago is its exposure to stocks from the consumer staples sector. Its exposure to the sector has risen from 24.5% a year ago to 29.1% presently. This shows that as the year has progressed, the fund’s managers have gone on the defensive.

A look at the portfolio since November 2014 shows that the fund’s managers have been quite consistent with their stock picks, barring a few exceptions. This is generally a good thing, as it shows that they’re investing for the long term and have conviction in their choices.

One reason that consistency may not always be a good thing is that sometimes managers may be stuck with their choices, unable to sell securities because of prevailing valuations.

How has ALEAX’s composition impacted its performance in year-to-date through November in 2015, and what can this performance be attributed to? Let’s take a look in the next article.


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