Equity

Our equity selection process

We have only one strategy for all our equity investments, and it is focused on sustainability and the long term. We do not aspire to predict how the market will move or how specific equities will react to passing fads. We invest in businesses capable of generating sustained, above average profitability. The conviction that sustainability, quality and diversification add value lies at the heart of our equity strategy.

How we select our equities

We seek out businesses that meet our definition of sustainable quality. We use a fundamental investment process for that purpose, drawing on the conviction that sustainability, quality and diversification add value. We combine a fundamental selection process with quantitative-based idea generation and portfolio construction systems.

In addition to the general exclusions under our SRI policy, such as companies engaging in the manufacture of tobacco products or controversial arms, we screen businesses on the basis of the four pillars of sustainable value creation:

• Is the industry attractive?
• What competitive advantages ensure profitability?
• Is management capable of creating long term value?
• How does the company deal with ESG aspects to create value?

All these factors warrant long term profitability for the company. In other words, they create a moat around the company to protect its stability and profitability.

Striking a healthy balance between equities from diverse sectors and countries, we build a portfolio that can withstand market shocks.