Regarding equities, we maintain a well-diversified, stable and value-oriented portfolio of global industry leaders. These have proven that they have achieved sustainable value creation and can also navigate through crises. To this end, the companies are systematically analysed using a 5P matrix:
- People: Who is in management and on the board, what is the personnel policy?
- Product: Are products easy to copy, irreplaceable and of high customer value?
- Position: Is there a leading market position, are there strong brands?
- Perspective: Assessment based on the relative classification and changes in the key financial figures in relation to the balance sheet, valuation and earnings.
- Policy: Is the dividend policy consistent over the long-term?
In addition to the Swiss blue chips, our global equities consist of companies from western countries that meet our high standards in terms of corporate governance, property rights, sustainability reporting, stock market infrastructure and political stability. The Swiss equity portfolio is supplemented by a limited proportion of exchange-traded Swiss small and mid caps. By tending towards an equal weighting instead of a capitalisation weighting - i.e. all positions are of roughly the same size – we achieve a more efficient risk diversification in equities and thus avoid concentration risks. We actively exclude chronically low-margin sectors and unsustainable stocks.
On the level of the individual securities, a rebalancing takes place periodically. This involves selective profit-taking in order to bring the size of the positions back into the direction of the aforementioned equilibrium. Entire positions are sold if we determine, based on fundamental factors, that we no longer wish to invest in a particular company in the future.
