abrdn Global Smaller Companies Class S - Accumulation (GBP)

Since the fund launched in January 2012, its delivered some impressive returns. Over this period, its outperformed the IA Global sector average and its benchmark. Remember past performance doesn't indicate future returns

Although the majority of this performance cannot be attributed to Desson, she's played an important role, particularly in Japan, Asia, and emerging markets. She's also managed a similar global smaller companies portfolio since early 2019, where we believe she's delivered growth primarily through her stock picking ability.

Given the focus on quality companies we expect the fund to hold up relatively well when markets fall. In contrast, we expect the fund to lag the peer group when markets rise quickly.

Desson and her team hunt for companies around the world outside the usual candidates of large firms that dominate stock markets. They believe smaller companies have greater long-term growth potential and are relatively under-researched and so there's plenty of opportunity to uncover the larger companies of tomorrow.

The fund invests in smaller companies, although those in the fund tend to be larger than the average company in the benchmark. However, this is higher risk than investing in large companies.

Hunting for sustainable growth over the long term means the team doesn't invest in more economically sensitive parts of the market like energy or real estate. Their focus on quality leads them to companies with strong balance sheets and good management teams whilst avoiding those that are highly indebted or loss making. Momentum is also important, which means the team likes to run their winners and cut their losers.

To identify these attributes, they use a quantitative tool called the 'matrix' which whittles down the universe of over 6,000 companies. The matrix output is continually reviewed, and the most attractive opportunities receive further analysis and team debate. They focus on the data for individual companies, rather than broader economic views.

This results in a fund of between 40 to 80 companies. Around half the fund is invested in the US, although this is less than the global stock market. In contrast, they invest more than the stock market in European countries such as the UK, Italy, and Germany. The managers also invest in higher-risk emerging markets and can use derivatives, which if used adds risk.