Aberdeen Standard Investments' Glennie revamps inherited smaller companies income trust
Portfolio overhauled
Aberdeen Standard Investments' Abby Glennie, manager of the £74m Aberdeen Smaller Companies Income trust, has said the portfolio is now broadly where she intends it to be following an overhaul of its holdings and investment style in the six months since she took full managerial responsibility.
Glennie, who joined veteran manager Harry Nimmo's smaller companies team at Standard Life Investments in 2016, started working on the trust alongside Aberdeen Asset Management's Jonathan Allison in March 2018, a year after the two groups merged.
With its smaller companies focus, the trust was moved under the direction of Nimmo's team and Glennie became its sole manager at the start of September. Since then she has reshaped the portfolio, to reflect the quality, growth and momentum process the team is known for.
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The overhaul involved placing the fund under a stock screening tool - or 'matrix' - which was created and implemented by Standard Life in 1997 and has been core to the smaller companies team's process.
This showed a stronger bias towards value and cyclical stocks and so Glennie added and removed a number of companies to adapt to a more growth-orientated focus.
However, a number of inherited stocks remained as they still supported the quality bias.
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Glennie added: "A lot of previous holdings remain very relevant and are ones that are already long-term names for us. My focus has been to add growth.
"The portfolio is now broadly where I want it and so turnover will be around 20% to 25% a year with a three to five year time horizon for a new investment.
"There is still some work to do in the 'reduction' tail of stocks and I think concentration could come down to around 40 holdings but I am not desperate to get out of those names just yet. When I do, they will provide a great source of cash, which I will redistribute."
Income element
Rather than merging the trust with Nimmo's £1.3bn Standard Life UK Smaller Companies trust, as Aberdeen's £160m Dunedin Smaller Companies trust did last year, the Aberdeen Smaller Companies Income trust was maintained separately for its income focus.
Glennie said: "What makes this trust different to Harry's is the income element, which is a new aspect for us. We have simply taken our existing process and put an income tilt on it.
"I initially thought this would be a challenge because it was not something we had actively gone out and done before. But when we started the process I found that was not the case as we already had a positive view on many of the holdings.
"This is exciting because it allows us to offer something different to our investors that already know and like our process."
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