Investment strategy
We base our strategy on tried and tested, robust methods that aim to ensure both good profitability and long-term value creation for our customers' investments.
Value investing and fundamental analysis
Value investing involves investing with a disciplined focus on how investments are valued in relation to underlying earnings, cash flows and assets – and only investing when the valuation is low or moderate. There is solid empirical evidence that value investing has been one of the best ways to manage capital over time. That is why we invest in line with this investment philosophy. In practice, this means a strong focus on fundamental analysis and valuation (i.e. not paying too much for assets).
Quality companies
Empirical studies have shown that quality companies deliver better returns than the market over time. Therefore, we tend to focus our search on such companies. Quality companies are characterised by solid balance sheets (low debt), a history of high returns to shareholders, and the fact that they operate in industries with high barriers to entry and good future prospects. We continuously search for and monitor such companies, and invest in them when they are moderately or low priced.
Under-analysed companies
We have a so-called "all-cap" strategy, which means that we can invest in small, medium-sized and large companies. However, we prefer small and medium-sized companies because we believe that the probability of finding good investments is greatest among these. There are several reasons for this: these companies are less covered by analysts at brokerage firms, large funds are often unable to invest in such companies due to size restrictions, it is often easier to arrange meetings with senior management, and these companies tend to be less complex and more focused than large conglomerates.
Genuine active management
There has been a lot of attention in the financial press about how active the so-called active funds have actually been, often measured using the parameter "active share". Several large funds have been criticised for having portfolios that are too close to the index. We believe that if a fund is marketed as an active fund, it should be genuinely active. Therefore, we do not focus on which stocks have a high weighting in the various indices, and our portfolio will typically deviate significantly from the index and have a high "active share". Nor are we concerned with how the index performs, as our goal is not to beat a given index. We focus on absolute returns.