Investment Philosophy

Producing positive investment returns calls for a distinctive investment philosophy, along with a robust and repeatable investment process. Standard Life Investments' philosophy is called Focus on Change, and it's applied to help identify the key factors driving the market price of an investment.

Understanding the dynamics behind these drivers is what lets the Standard Life Investments team focus on the changes that will cause the market to shift direction, and ultimately produce a revised price. Clearly the best opportunities come in the investments where the team has not only the deepest insights but also the greatest conviction that market expectations are going to change.

Focus on Change recognises that different factors drive markets at different times in the investment cycle. It's not inherently growth or value biased, or necessarily momentum driven. This allows the team to create opportunities to outperform throughout the investment cycle.

A common investment language

Before taking any investment decision, Standard Life Investments' people subject their ideas to five key questions:

• What are the drivers and issues?
• What's changing?
• What expectations are assumed by the market?
• Why will the market change its mind about these expectations?
• What is the trigger?

Put together, these questions comprise the company's 'common investment language', and are referred to in each regional office, across every asset class - providing a framework for deliberation and debate. They're the key to generating investment insights and convictions that can be easily understood and exploited across all portfolios.

Standard Life Investments' insights into 'what's changing' can, and do, come from a wide variety of places. For instance, the team's views of a Canadian mining stock might come from a meeting with its company management in Montreal, a competitor interview in the US or a macro-economic analysis of China completed in Edinburgh. The more pieces of corroborating evidence the team can amass, the greater the conviction it can take on an investment position.