Investment Philosophy

We have a simple and well-established investment philosophy across all funds. We are active and long-term investors in search of tomorrow’s winners, on behalf of our unit holders. Our fund selection is managed with specialist knowledge and high ambitions.

Our approach

We use a combination of “top-down” and “bottom-up” approaches in our investment process. This means that macroeconomics, market trends and sector selection are viewed in conjunction with price, liquidity and thorough company analysis.

This forms the basis for the return and risk assessments we arrive at.

We use proprietary models to evaluate the range of outcomes a given security may have. This draws on both internal and external valuations, as well as the portfolio manager’s assessment of risk. We therefore maintain a disciplined follow-up of all positions across our respective funds.

It is the portfolio manager’s subjective judgement that is decisive for all investment decisions

For many years we have invested according to the same investment philosophy and it has generated strong returns for our funds. We also believe this approach will continue to create good results for our unit holders in the future. At Fondsfinans, we have demonstrated on many occasions that we are patient and have the conviction to hold through periods where price developments have temporarily moved against our investments. During such periods we naturally reassess whether our analysis remain robust. From experience, we know that it can take time before the market reprices a company. In the long-term, daily price movements often amount to nothing more than noise.

-Ivar Qvist, Chief Executive Officer

We assess sectors from a macroeconomic perspective and combine this with thorough fundamental analysis of individual companies. We invest in companies that are well positioned for long-term trends (such as the technological, demographic and green transitions), and prefer companies we can own over time.
We manage concentrated portfolios characterised by a high active share and typically an overweight in mid-size companies. These companies are often insufficiently analysed, making it easier for mispricing of future earnings potential to arise. Today’s mid-size companies will frequently become tomorrow’s winners. This creates opportunities for us as active managers to identify attractive candidates.
A conscious approach to risk is a central element of the investment strategy. Risk is given significant weight both when investing in individual companies and when composing portfolios. In a positive outlook environment, the portfolio’s overall risk will be sought at a higher level than in a negative one. Typical examples include small companies that stake everything on the development of a single product.

: We follow global economic developments closely and publish our views monthly in our market report.

We focus on long-term trends such as the technological, demographic and green transitions.

We favour industries with extraordinary return potential. We exclude industries that are not socially beneficial.

We prefer flexible portfolios and favour investments in companies with good liquidity.

We generally avoid high-risk companies, particularly those with binary outcomes in technology or regulation.

We want to know the companies we invest in well. This may mean meeting management, understanding the ownership structure, the business model, the value chain and value drivers.

We always consider prices carefully.