The Aberdeen Emerging Market SDG Equity Fund won the Best Sustainable Asia and Emerging Markets Fund category at the Investment Week Sustainable Investment Awards 2026.
Here, Catriona Macnair, investment director at Aberdeen, discusses the fund's 'profit-with-purpose' approach to sustainable investing; key performance drivers; and the team's off-benchmark positions.
Winning the Best Sustainable Asia and Emerging Markets Fund category at the Investment Week Sustainable Investment Awards 2026 is a significant achievement. What expertise does the team bring to the strategy, and what are you aiming to achieve for investors and sustainable development globally?
We have a dual objective: to deliver capital returns above the MSCI Emerging Markets Index and invest in companies that we believe make a positive environmental or societal contribution towards achieving the United Nations Sustainable Development Goals (SDGs).
These objectives are supported by Aberdeen's 39 years of experience investing in emerging markets. Our EM Equities team comprises more than 50 experienced investment professionals, including four dedicated ESG analysts, across seven locations from São Paulo to Shanghai. The team is further supported by more than 20 central sustainable investment specialists, who provide expert input and a suite of quantitative and qualitative ESG tools.
Lead portfolio manager Catriona Macnair has 18 years of investment experience, alongside portfolio managers David Smith and Mubashira Bukhari Khwaja, with 19 and 18 years respectively. Utilities sector lead Fraser Harle, who has nine years of experience, also supports the team's ESG analysis.
Sustainability is central to the fund's investment philosophy. How is this embedded within your investment process, and what measures do you take to ensure companies are delivering meaningful contributions to sustainable development?
Our profit-with-purpose approach invests in companies seeking to tackle the world's biggest problems, driven by a belief that companies aligned to the UN SDGs will deliver a better return for investors over the long term. The cornerstone of this approach is our ‘theory of change'.
Our ‘theory of change' begins by evidencing a specific environmental or social need called out by the UN SDGs. We then examine a company's intentional efforts and material exposure in seeking to address the identified need through their products or services, and lastly use measurable outputs to track and monitor results.
Holdings are selected and monitored using a SDG & Impact research note which runs through our theory of change for each company and discusses any risks of negative externalities. All these notes are peer reviewed by a cross-asset class oversight committee called the SDG Governance Group. This brings together SFDR Article 9 fund managers across equities and fixed income and subject-matter experts from Aberdeen's Sustainable Investments team.
We want our clients to understand the investments we make and why. Publication of an annual Sustainable Development report provides regular insights into our SDG-aligned process, impact pillars, and real-world outcomes delivered by portfolio companies.
The most recent 12-month period carries significant weight in the judging process. What were the key drivers of performance in the year to 28 February 2026, and how has the portfolio evolved to capture opportunities while maintaining its sustainability objectives?
Strong stock selection was the primary determinant of performance, reflecting our bottom-up approach to identify and prioritise companies with strong fundamentals.
The underweight to and strong stock selection within China was a key driver of outperformance reflecting liquid cooling, solar inverter, and health-tech names. Not holding China internet index-heavyweights, which haven't met our SDG-aligned universe criteria, also helped. Stock selection within South Korea and Taiwan proved another bright spot, thanks to memory and advanced packaging players. Against this, our longstanding overweight to India hurt, so too not holding any South African gold miners.
Over the course of the year, we collaborated closely with our technology sector leads to capitalise on the AI infrastructure opportunity. One of the best performing names was a recently initiated Chinese thermal management company which provides energy-efficient solutions associated with data centres and rising AI applications.
We also continued to prioritise idiosyncratic themes to support diversification away from AI. We are comfortable taking off-benchmark positions and moving further down the market cap spectrum. Take two recent initiations into our first higher education provider boasting a footprint spanning Mexico and Peru and India's first power-sector infrastructure investment trust, as well as adding to a high-conviction Brazilian ecopark operator.
What does winning Best Sustainable Asia and Emerging Markets Fund at the Sustainable Investment Awards 2026 mean to the team, and why is this recognition particularly important for the strategy?
Winning the Best Sustainable Asia and Emerging Markets Fund at the Sustainable Investment Award is testament to a huge amount of hard work that goes on behind the scenes to champion impactful investing in public markets.
It has been a transformational year for the Aberdeen Emerging Market SDG Equity Fund, passing its five-year milestone in December 2025 and, despite an environment of anti-ESG rhetoric in some regions, growing beyond US$100m.
It has been a pleasure to share news of the award with everyone who has supported emerging market idea generation, impact integrity, research rigour, portfolio construction, risk governance and annual reporting.
To learn more about Aberdeen's approach to investing, visit its website.
