Aberdeen’s multi-manager team has boosted exposure to Europe and Asia across its equity portfolios in the past few weeks after reducing its US allocation.
Co-head of multi-manager Graham Duce says the team previously cut European exposure in February over sovereign debt concerns in favour of increasing the weighting to the recovering US.
However, the managers have recently reversed the move and have built European equities back up from 8% to almost 13% in their flagship equity portfolio, the Aberdeen Multi-Manager Constellation fund.
"European markets looked deeply oversold in May, so it was very much a contrarian move to go back into this market," Duce says.
"While we made the decision on the view Europe could bounce back from these valuations, it was also beneficial because the US then started to display softer data, which has impacted equity returns.
"But the European weighting is nowhere near where it has been historically. Going back a few years, we had a quarter of the portfolio on the Continent. We are blessed to have a number of strong European managers - such as Cazenove's Chris Rice, Neptune's Rob Burnett and BlackRock's Alister Hibbert."
Duce and fellow co-head Aidan Kearney - along with portfolio managers Scott Spencer and Robert Bowie - have also increased exposure to Asia across the equity portfolios.
In the Constellation portfolio, the group has boosted Asian exposure from 10.5% to 18.5% over the past six weeks, primarily through the addition of Philip Ehrmann's Jupiter China fund.
"China has also been unloved recently after the authorities took steps to cool the economy and in particular the residential property market," Duce says.
"There have been signs of the economy cooling in recent months and if the authorities now look to take their foot off the brake, this could be an inflection point in the market.
"Fundamentally, Asia as a whole is looking much more attractive to us, with the prospective P/E and price-to-book both well under five-year averages. We are seeing good bottom-up opportunities."
To fund the moves, the Aberdeen multi-manager team has cut the Constellation fund's US exposure from 29.3% to 23%.
