Barron's Best Mutual Fund Families

Aberdeen Asset Management was named one of Barron’s Best Mutual Fund Families in its annual survey. Among the 61 leading mutual fund families, Aberdeen was ranked #3 for the one year period ending Dec 31, 2009 . Barron’s also recognized Aberdeen as #1 within the Best Taxable Bond Funds category. Aberdeen ranked #6 and #8 in the U.S. Equity and World Equity funds category, respectively.

In Taxable Bond Funds, Aberdeen’s success was seen through seeking value in the U.S. and cashing in on its strong Asian-Pacific gains. Portfolio managers sought out reasonably priced and valuable, high credit quality bonds. Aberdeen is also turning towards commercial mortgaged back securities, again investing in only high quality securities.

Aberdeen Asset Management family of mutual funds offers a clearly defined and consistent investment discipline for each mutual fund portfolio. Through this approach, we are able to yield high returns for our clients for the long-term. Employing our own internal research, we are able to provide in depth analysis and knowledge for each fund to secure quality investments and superior returns.

How Barron’s Ranked the Fund Families

To qualify for the Lipper/Barron’s Fund Survey, a group must have at least three funds in Lipper’s general U.S.-stock category, as well as one in world equity, which combines global and international funds. We also require at least one mixed-equity fund, which holds stocks and bonds. Fund shops also must have at least two taxable-bond funds and one tax exempt offering. Each fund’s returns are adjusted for 12b-1 fees, which are used for marketing and distribution expenses. The funds usually add these fees back into returns. Our aim is to measure the manager’s skill. Fund loads, or sales charges, aren’t included in the calculation of returns, either.

Each fund’s return is measured against those of all funds in its Lipper category, such as, say, small-cap value. That leads to a percentile ranking, with 100 the highest and 1 the lowest, which is then weighted by asset size, relative to the fund family’s other assets in its general classification — world equity, for instance. If a family’s biggest funds do well, that boosts its overall ranking. Poor performance in a big fund obviously has a big effect on the ranking.

Finally, the score is multiplied by the weighting of its general classification, as determined by the entire Lipper universe of funds. The category weightings for the one-year results: U.S. equity, 41.42%; world equity, 14.49%; mixed equity, 16.27%; taxable bond, 23.16%; tax-exempt bond, 4.66%.

The scoring: Say a company has a fund in the general U.S. equity category, that the fund has $50 million in assets and that it accounts for half of the company’s assets in that category. Its ranking is the 75th percentile. The first calculation would be 75 X 0.50, which comes to 37.5. That score is then multiplied by 41.42, general equity’s overall weighting in Lipper’s universe. So it would be 37.5 X 0.4142, which totals 15.5 . Similar calculations are done for each fund in our study. Then, all the numbers are added up for a total score. The fund shop with the highest score wins, both for every category and overall. The same process is repeated for the five- and 10-year rankings.

Important Information

The views expressed should not be construed as advice on how to construct a portfolio or whether to buy, retain or sell a particular investment.

Fixed income securities are subject to certain risks including, but not limited to interest rate risk, credit risk, prepayment and call risk. Certain Aberdeen fixed income funds invest in foreign securities. Foreign securities are more volatile, harder to price and less liquid than U.S. securities. These risks may be enhanced in developing market counties. Concentrating investments in the Asian region are subject to more volatility and greater risk of loss than geographically diverse funds.