The Swiss and US equity markets offer the highest levels of Cash Flow Returns on Investment (CFROI)* for equity markets. CFROI is the financial measure which best enables an investor to gauge a company’s value-creation ability. With an investment framework based on companies’ CFROI lifecyles in place since 2006, UBP’s Swiss and Global Equity investment team focuses on attractively valued opportunities. They build convictions through bottom-up analysis of companies and their environment, incorporating strict environmental, social and governance (ESG) criteria into the process.
The post-Covid-19 environment is expected to offer limited visibility on prospects for economic recovery, with earnings uncertainty lingering and numerous companies withholding guidance for the medium term.
- Active investment approach to provide stability in volatile markets
- Superior risk adjusted returns through Swiss equities’s superior value creation and ESG focus
- Strong selection process for lower turnover and medium- to long-term focus
An active investment approach with an experienced stock-picking ability, focusing on the medium to long term rather than short-term movements, should provide equity investors with the needed stability and agility to navigate this volatile period.
The Swiss equity market remains one of the most resilient markets, offering superior risk-adjusted returns over the short and longer term versus other regional and global equities. This structural outperformance is driven by Swiss equities’ superior value creation and ESG profiles.
UBP’s Swiss & Global Equity strategies continue focusing on value-creating quality companies and remain well positioned for short-term momentum as well as long-term structural drivers, without the need to time markets or themes.
Investment philosophy & process
- A company's CFROIs are consistent indicators of its ability to create value for investors, and best reflect its management’s decision-making process.
- Corporations tend to follow a similar profitability life cycle, reflected by their levels of CFROI, which allows for comparison of companies across sectors and countries.
- By choosing to follow the investment approach put in place by UBP’s Swiss and Global Equity team since 2006, an investor will be gaining access to attractively valued opportunities across the CFROI lifecycle, with well diversified geographical and sector exposures along with superior ESG profiles.
- The strong multi-year track record the team has built around bottom-up stock selection demonstrates the resilience of the investment process in the medium term and in different market conditions.
- Active stock selection explains the majority of excess returns…
- …but it is important to manage the degree of active risk. Active management of portfolio tracking error is part of the team’s approach to portfolio construction and risk.