The New Capital
Swiss Select Equity Fund
Switzerland is not normally considered a country of extremes until you consider its approach to equity investing. The preference for large or mega-cap funds means that nearly 85% of all Swiss equity investment – representing €62bn in assets – goes into funds at the top end of the market-cap scale.
This is a growing trend as well, with total assets increasing by €2.9bn from the end of 2015. By comparison, at the end of 2016 total assets in small and mid-cap funds stood at €13.5bn, €1.8bn higher than year-end 2015 but still less than 20% of total Swiss equity investment.
This gap is getting bigger between mega caps and small caps year on year and shows no sign of changing anytime soon.
However, according to Urs Beck, manager of the New Capital Swiss Select Equity Fund, there are issues with both these styles of investment.
The SMI (Swiss Market Index) is dominated by three stocks, with Nestlé, Roche and Novartis making up a massive 50% of the index.
Any negative issues with any one of these companies puts a huge drag on the entire SMI. This has led to stocks within the SPISMC (Swiss Performance Index Small and Mid-Cap) being overpriced. The middle ground is sparse, but this is exactly where Beck finds the best opportunities.
The Fund’s flexible all-cap philosophy means it can invest across small, mid, large and mega-cap stocks, making it unique in the market.
Data as of 30 June 2017
Fund performance %
Fund manager: Urs Beck
Inception date: 13 March 2014
AUM: CHF 122m
Base currency: CHF
Price reporting Financial Times, Bloomberg, Micropal, Lipper
Swiss Performance Index
EFG Asset Management (UK) Limited
Daily 16.00 (Irish time)
Accounting period: 30 June
Inception date: 13 March 2014
NAV: CHF 150.35
Management Fee (pa): 0.70%
• Initial CHF 5,000,000/Subsequent
Dividend (for income classes):
• ISIN: IE00BJFL7248
• Bloomberg Code: NCSSEFI ID
Urs Beck is Zurich-based and has over 20 years’ experience in Swiss equities. He knows and understands each of the 150 investable stocks very well.
He spends a lot of time with CEOs and CFOs listening, reading between the lines and understanding how change might affect a company and whether any given management team has the strength to execute their strategy.
Stock split (size %)
The make-up at stock level in the Fund is 10% mega, 30% large, 30% mid and 30% small-cap – an interesting proposition in a potentially lucrative market. Its three biggest holdings are ams AG, Roche Holding and the Swatch Group. The Fund has delivered annualised returns of 13.16% since launch, is 5-star Morningstar rated and has AUM of approximately CHF 122m.
The Fund’s performance is derived precisely from the neat path it carves between the two other types of Swiss equity fund. The Fund’s high tracking error of around 7% and its active management style means it can sidestep the problems of the over-concentrated SMI and the overpriced SPISMC.
As Beck explains, there are still some very attractively-priced stocks in the small and mid-cap sectors, and active management means regular reallocation depending on where he sees value.
Issued by EFG Asset Management (UK) Limited. Registered in England and Wales 7389736.
Registered Office: Leconfield House, Curzon Street, London, W1J 5JB. Authorised and regulated by the Financial Conduct Authority.
T +44 (0)20 7412 3847 | E email@example.com
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