A good diversification is considered to be the be-all and end-all of a good portfolio. For many this means to be as close to the average as possible. NZS Capital takes a different approach here. "A core component of our investment philosophy is the double portfolio construction," says Jon Bathgate, who, like all four managers of the fund at NZS, carries the title "Investor". “There is a part of the portfolio made up of stocks that we consider resilient and part of stocks that we call optionality.” The resilient part of the portfolio consists of 15 to 20 stocks of generally more mature companies, whose possible business results are comparatively narrower Range. The area of ​​options consists of stocks of companies that offer great opportunities. The number of shares is significantly larger, the positions significantly smaller,so that it is not necessary to land a hit with every share.

Martin Hock

Editor in business.

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The principle of stock selection is the triad of quality, growth and context. Quality is based on long-term thinking and adaptability. These are basically two sides of the same coin, because successful companies focus on what will not change for their business and can adapt to everything else. When it comes to growth, the terms “non-zero sum” and “win-win” are particularly important for NZS. Bathgate believes that companies should create value for everyone involved, not just for shareholders. Such companies could more easily break into large, established markets because they offer a profit to all involved. Furmanski believes that this is also an implicit approach to sustainability. Even if the fund is not marketed as such, there are still many synergies."But we'd rather choose appropriate companies than try to turn an oil and gas company into a wind turbine manufacturer."

Either - or, not both and

Context means that the overall portfolio is not dependent on a specific future scenario.

In the resilient part, the range of possibilities for how a company can develop must be comparatively narrow, says Furmanski.

In the optional part, on the other hand, there should be real opportunities.

Avoid companies where the range of options is so broad that an investment becomes a bet.

And you would never invest 10 percent of the fund's assets in a high-risk share.

Tesla has been in the portfolio since it was founded.

But the position is trimmed every week or two because you don't want a company with such a highly optional business at the top of the fund.

“What we avoid, however, are medium weightings. There are no stocks with a weight of 1.5 or 2.5 percent in our fund. What we also don't want are stocks with a broad spectrum of possible developments with no significant price potential or - even worse - with a narrow spectrum of possible developments and zero price potential, ”says Furmanski. And the middle is also excluded: a share must either be very resilient or offer a high degree of optionality.

An example of the resilient part of the portfolio is the share of T-Mobile US.

"We all live and die with our cell phones," says Furmanski.

T-Mobile has a solid market position and can offer better quality at a lower price and so continue to grow.

The optional part includes Adyen.

In a market characterized by consolidation and integration, the payment processor has developed a new system from the ground up, says Bathgate.

Even if the fund is invested primarily in the technology sector, it is not a pure technology fund.

Innovation and disruption could also be applied to other industries.

And so, for example, the packaging manufacturer Ball Corporation or shares from the renewable energies sector can be found in the portfolio.

In the long term, the semiconductor industry is currently very interesting, but also the subject of cybersecurity as part of the optional features.

The damage caused by digital crimes is significantly greater than the expenditure on cybersecurity, says Furmanski.

The “Jupiter Global Equity Growth Unconstrained” fund from NZS has been on the market in Germany since the end of April, but is currently only available through brokers.