Close contacts to company managers that have been established for over 20 years are the most important instrument for us in selecting securities. Every year we hold more than 600 meetings with corporate bodies of our portfolio companies. These discussions serve to discuss the previously analyzed financial and non-financial ESG aspects and to penetrate business models, corporate strategy and the most important success factors/drivers. Product quality, customer and supply chains, market structures and market entry barriers play important roles in understanding the company.

We also use other sources of information to support our personal discussions and for further analysis: For the fundamental data of our screening, portfolio and reporting models, for example, a large number of external research providers (brokers) and high-quality data feeds from the information service providers Bloomberg and FactSet. We obtain external ESG data from the provider MSCI, among others.

The managers look for fundamental and sustainable value potential such as outstanding sustainability indicators, continuous growth of business sectors, trend changes in the business model, incorrect valuations or restructuring in order to find quality companies suitable for portfolios. In the following, these ideas are analyzed and classified in more detail. Valuation techniques such as earnings value methods (DCF models, multiplier methods, peer group analyses) or substance value methods (consideration of the balance sheet and its intrinsic value) are used for this purpose. The analysis of the individual ESG factors of the business model plays an important role in the investment strategy of the fund.

As a result of the assessment of the business model and further personal discussions with company managers, around 40 titles form the CHOM quality portfolio. These holdings generally start equally weighted to ensure that each stock selected has a significant impact on earnings.