Standard Life Investments

Investment philosophy and process

Distinctive investment philosophy

Our distinctive investment philosophy is called Focus on Change. It helps us to analyse the key factors driving the market price of an investment and to identify the drivers that the wider market may have missed. Essentially, we aim to capture anomalies and inefficiencies between consensus and non-consensus analysis of companies. We have found that the best opportunities come from the investments where we not only have the deepest insights but also the greatest conviction that market expectations are going to change.

Robust investment process

Our investment process takes a bottom-up approach, seeking to uncover those opportunities with real potential. Company meetings are an essential part of this process; in fact they are the source of the vast majority of our non-consensus investment insights. Our size and reputation ensures we have first-rate access to firms, through both structured meetings and regular conversations with key decision makers.

Stock selection and recommendations

Every investment idea must be justified by our five questions, which underpin the common investment language. Once an analyst has researched a stock, it is then subject to rigorous peer review, where ‘buy’ ideas are scrutinised and assessed for strength of conviction, materiality and timeframe.

Portfolio construction

Our portfolios are built from a bottom-up perspective and reflect our conviction in each stock. We continually monitor our portfolios to ensure they are meeting their objectives within the defined risk parameters. We have a dedicated risk management team, and our fund managers also play an active role in managing risk.