Thursday 4 May 2017

Buying A Fund Manager (Portfolio Buy)

Fund manager pay 620

Regular readers will be aware that the DIY Income Investor promotes do-it-yourself investing rather than paying expensive fund managers to do an often less-than-stellar job of deciding where your money should be held. For that reason I don't hold any traditional managed 'funds', although I quite like Exchange Traded Funds (which provide low-cost access to world markets).

Having said that, I don't have anything against buying shares in a Fund Manager, if they offer a good yield and seem to be doing a good job.

The DIY Income Investor portfolio has become quite boring of late, with no purchases or sales - but the steady inflow of cash means I needs to choose a new investment. As usual I looked at my existing portfolio for any 'gaps': the portfolio is broadly balanced between dividend shares and fixed-income and ETFs make up over two-thirds of it. But I fancy something new.

Looking at the high-yielders in the FTSE 300, one caught my eye (after I dismissed a couple of shaky-looking options). Aberdeen Asset Management (LSE:ADN) is one of the world's largest asset managers, with over £300 billion under management and is present in 26 countries. The bulk of their work is for institutional investors such as insurance companies, pension funds, treasuries, banks, sovereign wealth funds, family offices and foundations.

The company's shares offer an attractive yield of over 6% - and that share price is around half its 2015 peak. But what really caught my eye was the recent good performance, plus the planned merger with Standard Life. Hopefully more good news for the future.

So, I look forward to receiving my share of the profits on that £300 billion under management...

[Purchase price: £2.865]

I am not a financial adviser and the information provided does not constitute financial advice. You should always do your own research on top of what you learn here to ensure that it's right for your specific circumstances.


  1. This seems a good choice - and I'm surprised it hasn't been highlighted by Telegraph's Questor Income Portfolio (that you have referred to in the past).
    I just hope the 'curse' of the mega-merger doesn't crop up when the tie-up with Standatard Life occurs.
    But as you say, a 6% yield is very handsome indeed

  2. From what I can make of their factsheets, only about 20% of their assets are in the UK, making this a good candidate for another ex-UK holding, something I started concentrating on after the crisis. Given the slide in the pound, 6% doesn't surprise me, though it is at the limit of where the alarm bells start ringing.