Selecting securities we consider quality and valuation. Quality means at first a comprehensible business model and a good corporate governance. Then we focus on companies with a strong balance sheet and resilient cash flows. A special attention is given to the return on capital employed (ROCE). Companies with a high return on capital are able to invest their capital more efficient and are characterized by a higher stability in difficult times. The most important valuation multiple is EV/EBIT, the enterprise value in relation to the operating profit. So we make sure that we don’t pay an excessive price for good companies.
We don’t focus on the development of the overall market and don’t follow stock market trends. Our work is based on the fundamental valuation of markets, products, management, shareholders, etc. We do not orient our portfolio on a benchmark nor do we manage a tracking error. Our goal is a fund performance that exceeds the overall market over a cycle.