Standard Life Investments

Investment process

Our core investment process is the product of our Focus on Change philosophy, and combines asset allocation, security selection, portfolio construction, dealing and risk management.

We believe high-quality research drives outperformance and so we carry out rigorous research in all the major financial markets. We have invested heavily in state-of-the-art technology and have built proprietary systems to add value at every stage. While the investment process for each asset class is different, there are some core elements:

Asset allocation

The Global Investment Group (GIG) considers where markets are in their own cycles and determines the best allocation of assets, between equities, bonds and other types of investment. This group is made up of senior investment professionals and is responsible for providing overall strategic and tactical focus to our decision-making process. This focus finds expression in the House View, which communicates the most favored and least favored asset classes in the construction of client investment portfolios.

Security selection

Our asset managers focus on selecting the best possible individual assets. They analyze the key drivers of prices, assess what’s factored in to these prices, and judge what is likely to shift investors’ expectations. Combined analyst and portfolio management responsibilities mean our asset managers must have the highest conviction in the assets they recommend. These recommendations can only be included in our portfolios once they've been peer reviewed.

Portfolio construction

Our asset managers select the most convincing investment ideas to construct portfolios around specific benchmarks, while also taking into account our clients’ risk profiles.

Dealing

Our team of experienced dealers finds the best available terms in the market, allowing our asset managers to focus entirely on research and the construction of investment portfolios.

Risk management

Our investment process doesn't end with the purchase of assets. We continually monitor our portfolios to ensure they are meeting their objectives within the defined risk parameters. We therefore have a dedicated risk management team that measures and monitors risk. In addition, our asset managers play an active role in managing risk within clients’ portfolios.