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Inside story: Atlas Copco

Portfolio Manager, Zehrid Osmani, provides an insight into Atlas Copco, a long-established global manufacturer of industrial tools and equipment.

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Video Script

One of our core positions, and our largest stock in industrials (at 30 April 2021).  Atlas Copco is a long-established global manufacturer of industrial tools and equipment, and is a leader in vacuum and compressor technologies, selling its industrial equipment to a broad range of end-users, notably the autos, industrials, construction, and semi-conductors industries.

It is a leading player in air compressors - compressed air is sometimes referred to as the fifth utility - critical in powering certain industries.  Reasons we like Atlas Copco:

  • It gives us exposure to many parts of the industrial cycle, with its diverse end-user markets exposure
  • It is also well-diversified geographically, which reduces the risk of exposure to one single country or regional economic cycle
  • More than a third of its revenues are derived from service, providing resilience through the cycle
  • It has scale benefits, giving the company greater R&D firepower and leverage, making the company more innovative than the competition
  • This in turns gives it stronger pricing power, which is an important characteristic we seek in companies
  • It is best in class within the industrials sector in terms of returns on invested capital
  • It has managed to more than cover its cost of capital through the cycle, even during past severe recessions, making it one of the high-quality cyclical businesses within the Industrials sector globally

Finally, it is exposed, directly or indirectly, to some attractive structural growth opportunities, notably related to:

  • Green infrastructure initiatives such as renewable energy and efficient buildings construction
  • Electric transportation - both railway infrastructure and electric vehicles
  • 5G telephony infrastructure upgrades that are currently being undertaken
  • Healthcare infrastructure which is in need of upgrades

All in all, Atlas Copco is a company that fits our search for companies that have quality growth profiles and sustainable business models.


The information provided should not be considered a recommendation to purchase or sell any particular security. It should not be assumed that any of the security transactions discussed here were or will prove to be, profitable.


Regulatory information and risk warnings

Past performance is not a guide to future returns

This information is issued and approved by Martin Currie Investment Management Limited (‘MCIM’). It does not constitute investment advice. Market and currency movements may cause the capital value of shares, and the income from them, to fall as well as rise and you may get back less than you invested.

The opinions contained in this document are those of the named manager(s). They may not necessarily represent the views of other Martin Currie managers, strategies or funds.

The information contained has been compiled with considerable care to ensure its accuracy. However, no representation or warranty, express or implied, is made to its accuracy or completeness. Martin Currie has procured any research or analysis contained in this document for its own use. It is provided to you only incidentally and any opinions expressed are subject to change without notice.

The analysis of Environmental, Social and Governance (ESG) factors form an important part of the investment process and helps inform investment decisions. The strategy does not necessarily target particular sustainability outcomes.

Risk warning – investors should also be aware of the following risk factors which may be applicable to the strategy. Investing in foreign markets introduces a risk where adverse movements in currency exchange rates could result in a decrease in the value of your investment.

This strategy may hold a limited number of investments. If one of these investments falls in value this can have a greater impact on the portfolio’s value than if it held a larger number of investments. Smaller companies may be riskier and their shares may be less liquid than larger companies, meaning that their share price may be more volatile.

The opinions contained in this recording are those of the named manager. They may not necessarily represent the views of other Martin Currie managers, strategies or funds. These opinions are not intended to be a forecast of future events, research, a guarantee of future results or investment advice.

The information contained has been complied with considerable care to ensure its accuracy. However, no representation or warranty, express or implied, is made to its accuracy or completeness. Martin Currie has procured any research or analysis contained in this recording for its own use. It is provided to you only incidentally and any opinions expressed are subject to change without notice.

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