Is Standard Life Aberdeen a good long term investment?

[Wizard]

I held Aberdeen Asset Management before the merger to form Standard Life Aberdeen (SLA) and have benefitted from a capital gain and decent dividends. However, I cannot see how it will be a good lomg term investment if it cannot stem the outflows from its funds. Figures like the ones in this article concern me somewhat:

http://www.morningstar.co.uk/uk/news/16 ... -2017.aspx

While Standard Life Aberdeen’s (SLA) share price is up 11% since the two firms’ March merger, investors in its funds have been less enthused...

...Investors pulled £5.2 billion from Standard Life funds and £1.4 billion from Aberdeen offerings. Despite that, joint chief executives Martin Gilbert and Keith Skeoch last week told investors the outflows were “in line with our expectations”.

Standard Life has only seen net inflows in two of the previous 17 months. It was the Morningstar Bronze-rated Global Absolute Return Strategies (GARS) fund that caused Standard Life trouble, losing almost £5 billion of assets.

September was the first months Aberdeen had seen net inflows in three years. The Aberdeen Japan Equity and Aberdeen Multi-Asset funds saw outflows of £587 million and £451 million respectively.

I am not there yet, but if SLA can't turn this tide reasonably quickly I will consider cutting my loses. Are other holders happy to dig in for the long term or are they also concerned?

Terry.

[StepOne]

I try to ignore these kind of stories (good or bad), and just look at dividends received and forecast. And I tend to hold on through thick and thin, so possibly I'm not the right person to ask, but I won't be doing anything off the back of this.

StepOne

[richfool]

Terry, This maybe useful, from the HL website:

Assets Under Administration (AUA) finished the first half up 1% at £361.9bn, as market movements offset a £3.7bn net outflow.

The net outflow represents increased withdrawals from the giant GARS fund of £5.6bn, where a poor investment result in 2016 continued to weigh on performance. This was partially offset by a 32% increase in net inflows elsewhere in the Institutional and Wholesale business of £1.2bn.

The Workplace and Retail business saw net inflows of £4.2bn, with record inflows into the Wrap and Elevate adviser platforms, where AUA rose 11% to £49.2bn.

Fee based revenue from AUA rose 5% in the quarter, to £836m, and now accounts for 94.5% of total income. Expenses rose 2.7% to £581m, with the cost to income ratio remaining stable at 62%.

With Aberdeen having suffered 16 successive quarters of outflows, and Standard Life also struggling to hold on to assets, effective cross-selling and reversing recent outflows is key in the long run.

Importantly, the new group will be less reliant on either the huge Global Absolute Return Strategies (GARS) fund or emerging markets than its constituent parts used to be. While both will still go in and out of favour with investors, given their different risk profiles hopefully that won't happen at the same time!

For now, cost savings should support profit growth, and the combined group expects to offer a progressive dividend policy, growing from a base of 19.82p for the 2016 financial year. However, large scale M&A always comes with risks.

First half operating profit before tax rose 6% to £362m with underlying cash generation up 1% to £256m. The interim dividend rose 8.2% to 7p per share.

http://www.hl.co.uk/shares/shares-searc ... e-research

I am happy to continue to hold, particularly for the dividend.

[idpickering]

I am not there yet, but if SLA can't turn this tide reasonably quickly I will consider cutting my loses. Are other holders happy to dig in for the long term or are they also concerned?
.

I have held this share in my HYP since 25 Apr 17, having bought in at 367p. I am not concerned about this matter at all, and my views are much like StepOne's and richfool's above. I bought into the share to sit alongside my Legal & General holdings, in order to diversify between them in the sector. No regrets, and I have no intention of selling either.

Ian.

[kempiejon]

I bought Aberdeen for my HYP so I hadn't intended to have Standard Life, the yield on offer is around what I was getting from Aberdeen so I have no pressing need to swap to protect my income. I don't know if I would have chosen the current company SLA if it had been an option when I bought Aberdeen, perhaps not as the merged company wouldn't have had much history.

[Gengulphus]

..., perhaps not as the merged company wouldn't have had much history.

Only about twice as much recent history as most other candidates! ;-)

Gengulphus

[kempiejon]

..., perhaps not as the merged company wouldn't have had much history.

Only about twice as much recent history as most other candidates! ;-)

Gengulphus

Ha, excellent.

[scottnsilky]

I held both companies before the merger, so I now have double the value of holding in one company than I would like. I bought SL on de-mutualising, and have done very well since, doubling in value, first re-investing dividend, then taking the cash since retiring.
SL have increased the divi every year, so no complaints. I would like to sell my share held directly with SLA, the other tranche is in my HL ISA, the problem I have, what to buy? I already have too much cash with HL, so investing that is first priority. I'm holding for the time being. Appropo of nothing at all, the two holdings are 1939 and 1945 shares, so they're easy to remember, not that I ever have to!
Happy New Year to all,
dp

[monabri]

My wife thinks so and she's always right! I tend to agree with her.

We (*) hold at just under 4% HYP.



https://simplywall.st/stocks/gb/diversi ... een-shares


(*) she received some free shares (~1%HYP) from Standard Life from her pension fund and I've added them into my HYP.

[Gengulphus]

My wife thinks so and she's always right! I tend to agree with her.

OK, I give up! What is it that she thinks and you tend to agree with? There are too many candidates from earlier in the thread and I can't see any clue which one you are talking about...

Gengulphus

[monabri]

I was answering the question posted by the OP - "Is SLA a good long term investment". Standard Life was a good divi payer and my wife has held for at least 10 years (maybe more) - here's the info on the rising divis since 2006.

https://www.dividenddata.co.uk/dividend ... y?epic=SLA

(I added having read the pros/cons of the merger and having previously "held" Aberdeen).

But to answer your question "OK, I give up! What is it that she thinks and you tend to agree with?" the obvious answer is "everything"!

[Gengulphus]

I was answering the question posted by the OP - "Is SLA a good long term investment".

Thanks for clarifying - and it did need clarification, because that question was actually "Are other holders happy to dig in for the long term or are they also concerned?" and even if I guessed that that was what you were answering, it wasn't easy to decide which half of it described what your wife thought and you agreed with! Though I suppose you could be both happy and concerned - they're not actually completely contradictory emotions... ;-)

Gengulphus

[Wizard]

[quote="monabri]I was answering the question posted by the OP - "Is SLA a good long term investment".[/quote]
Thanks for clarifying - and it did need clarification, because that question was actually "Are other holders happy to dig in for the long term or are they also concerned?" and even if I guessed that that was what you were answering, it wasn't easy to decide which half of it described what your wife thought and you agreed with! Though I suppose you could be both happy and concerned - they're not actually completely contradictory emotions... ;-)

Gengulphus[/quote][/quote]

My bold.

I understood the answer and saw no need for clarification, it was clear to me the answer was to my question in the title. In fact I could not understand why you struggled to understand Monabri's post which I thought was clear, amusing and succinct.

Terry.

[Gengulphus]

You're right - sorry, a complete 'blind spot' on my part, I simply saw the body of the posts and not the thread title!

Gengulphus