Fund Profile

Aberdeen Diversified Income & Growth 30 September 2020

Disclaimer

This is not substantive investment research or a research recommendation, as it does not constitute substantive research or analysis. This material should be considered as general market commentary.

Overview
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Overview

Aberdeen Diversified Income & Growth (ADIG) targets a total portfolio return of LIBOR plus 5.5 per cent per annum (net of fees) over rolling five-year periods. It invests via funds and direct holdings in a portfolio of equities, bonds and alternatives. Equities and bonds make up a very small proportion of the portfolio, though, with the portfolio having major allocations to asset backed securities, infrastructure, property and emerging market bonds (the latter through a portfolio of directly held securities). There are also allocations to loans, private equity and other opportunities, including within the listed closed-ended fund space. The aim is to provide access to strategies which are often not available to the retail investor and often available only to institutions. Unlisted investments are expected to make up around 40% of the portfolio.

ADIG offers a generous historic yield of 5.8%, paid quarterly. With almost two years’ dividends in reserve, the board is, in our opinion, in a strong position to maintain or grow its income even if some underlying investments do not generate the revenue they did pre-Covid. We think these reserves could be a highly attractive feature considering the current environment and the pressure on dividends.

The managers are Mike Brooks and Tony Foster. Mike is head of diversified multi-asset strategies. Mike joined Aberdeen in 2015 from Baillie Gifford where he was a manager on the Diversified Growth team, having co-founded the Diversified Growth strategy at Baillie Gifford in 2008. Tony is a senior investment manager on the Diversified Multi-Asset Team. He specialises in closed-ended funds for ADIG and other internal clients. Tony previously ran a fund of investment trusts at SWIP.

Mike and Tony took over in February 2017 when Aberdeen won the management contract from BlackRock. To the end of August NAV total return was up 3.9% compared to a target return of 22.5%. ADIG has not escaped the impact of the coronavirus pandemic, with its NAV total return impacted negatively by its ABS holdings, listed equities and some special opportunities such as aircraft leasing and litigation financing.

The share trade on a discount of 19%, which compares to a 15.6% AIC Flexible Sector average.

Fund History

26 Jul 2023 Our board and saviour
Boards are proving their value as discounts languish…
21 Mar 2023 Fund Analysis
ADIG’s significant discount may present a good opportunity to access a diverse range of high-quality, good value investment opportunities…
19 Oct 2022 Gimme shelter
Our analysts examine safe havens and defensive strategies as we endure the market's 19th Nervous Breakdown...
29 Jul 2022 Fund Analysis
ADIG offers investors an unconstrained multi-asset portfolio, including hard-to-access private market investments sourced through abrdn’s origination platform...
13 Jul 2022 Ready player one
We wonder where, if anywhere, should investors look for returns after a tumultuous first half of the year…
06 Jul 2022 A game of two halves
In the second article of our series on the AIC Flexible Investment sector we see how performance has stacked up during two years when markets were poles apart...
01 Oct 2020 Alternatives for Income Investors
Slides and audio from our event focused on alternative routes to a reliable income…
30 Sep 2020 Fund Analysis
ADIG offers a high yield from a portfolio of alternative assets...
30 Sep 2020 Slides and Audio: Aberdeen Diversified Income & Growth
View the presentation and listen to the audio from our 'Alternatives for Income Investors' event on 29 September...
20 Aug 2020 Alternatives for income investors
In a world where dividend are under unprecedented pressure, our income focused online event in September should provide serious food for thought…
View all

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