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INVESTMENT STRATEGIES

Sustainable Equities Swiss Small & Mid Caps

Invest locally, benefit worldwide

Most of the companies listed on the Swiss stock exchange are small and medium-sized companies, which nonetheless only represent less of a third of total market capitalization. Over many decades, these firms have developed robust business models, thanks to innovation in key niche sectors, in order to cope with an ever-strengthening Swiss Franc; they now form the backbone of the Swiss economy, and in our view represent one of the most promising asset classes.
These small to mid-sized companies are innovative leaders in niche markets which enables them to generate higher margins.
Given their size, they can operate more flexibly than large cap companies, allowing them respond faster to changing market and business conditions.
Swiss small- and mid-caps generate on average more than 80% of their sales abroad, thus benefiting from global growth.
As a result, Swiss small and mid-caps have outperformed large-caps by close to 4% per annum over the past 20 years.
Our strategy is focused on investing in innovative, well-managed companies with strong balance sheets, solid cash flows and leading market positions. We truly think and act as co-owners in each company we are invested in, and place special emphasis on smaller companies and industrials which seem best positioned to benefit from macro trends leading to structural growth.
As a pioneer in sustainable investing, we have been integrating environmental, social and governance factors (ESG) into traditional financial analysis since the late eighties. We believe that such an approach is not only good for the society, but also makes sense from an investor’s point of view. Many companies have long understood that making sustainability a priority is beneficial to their business. For example efficient use of energy and resources reduces costs, Innovative products result in higher sales, good quality management leads to customer loyalty and prevention of corruption to a better reputation.
We are convinced that long-term sustainable returns can only be realized if the livelihood of future generations is preserved. This requires dramatic ecological, social and regulatory changes to which sustainable investors can contribute through their actions. Identifying these developments early and integrate them into investment process helps us to higher opportunities and reduce risks.
For information about investment products please visit our Fund Finder.