Investment Philosophy

Standard Life Investments' Focus on Change investment philosophy seeks to identify and understand the most important factors that drive the market price of an investment and the dynamics behind these drivers. This focus is supplemented by analysis of what is priced into an investment - what are the key drivers of the price and what expectations for these drivers are currently 'priced in'. Standard Life Investments then focus on what's changing and whether these changes will lead to revised market expectations and hence to a revised share price. Clearly their best opportunities come in the investments where they not only have the deepest insights but also have the greatest conviction that market expectations are going to change.

Their Focus on Change philosophy recognises that different factors drive markets at different times in the investment cycle. It is not inherently growth or value biased or necessarily momentum driven. This means that Standard Life Investments have an opportunity to outperform throughout the cycle.

To achieve rapid and effective communication, Standard Life Investments use a Common Investment Language, when discussing their investment insights. They ensure discipline around their 'Focus On Change' philosophy by requiring that all their investment decisions are justified by their answers to five questions:

These five questions represent the Common Investment Language of Standard Life Investments and are used in all regional offices and all asset classes. This common investment language is key to generating the information advantage that creates investment insights and convictions that can be easily understood and exploited across all the funds they manage.

Standard Life Investments' insights into 'What's changing' can, and do, come from a wide variety of places. For instance, their views of the future for a UK mining stock could come from a meeting with its management in the UK, a competitor interview in North America or a macro economic analysis of China completed in Hong Kong. A key benefit of their common investment philosophy and language is the effectiveness with which they can quickly communicate these insights across the organisation and exploit them in their investment decisions. The more pieces of corroborating evidence they can amass - the greater the conviction they can take behind these investment positions.