Now available by subscription:
The digital age transformation certificate

The Top 20 Companies: How we make our selections

Daily analysis gathers fundamental data from the entire investment universe. The data is analyzed for each individual company, and companies are then ranked by a combination of factors—valuation, growth, earnings momentum, and risk metrics. We also add one Big-Data factor to capture the company's reputation at consumer levels.

The diversification requirement ensures the number of companies in the same industry group is capped at 20% of the invested assets.

Why Our Approach is Effective

The companies selected have the following common characteristics:

Innovation:

• A clear and competitive edge
• An ultra-high level of intellectual function in their business (they are not capital- or labor-intensive)
• In-depth customer behavior analyses

Sales:

• Capitalize on a strong digital presence, data mining, new devices and a variety of technological measurement instruments
• Adapt existing services or products into more customer-friendly offerings
• Command higher prices based on proven competitive advantages

Performance:

• A proven track-record of better long-term performance versus the average market

More than simply investing in “New Technology”

Benefits:

• Gathers a large span of digitally-related companies
• Regularly rebalances to reflect changing market conditions
• Combines top-down, fundamental, and technical insights

Our Digital Age Transformation Certificate strategy offers exposure to major companies with strong engagement in intellectual property and knowledge-intensive activities. Such companies are, by definition, exclusive, and their market share is difficult for newcomers to access; they are also usually the leading disruptors in their field.

Our equity selection process gathers a broad range of such companies, where new technologies are already disrupting the existing business model, or likely will soon.

Presently, the investment universe comprises over 250 companies that are all part of the following indices:

• S&P 500
• NASDAQ-100
• Euro STOXX 600
• Nikkei 225
• S&P/ASX 200

However, the investment universe is not fixed. We expect numerous mergers and acquisitions, takeovers, and entry of new companies to the respective country indices in the near to medium-term future.

The investment universe is therefore analyzed daily. An evenly weighted classification of companies is established using the data, based on the following factors:

• 4 risk factors
• 3 momentum factors
• 4 value factors
• 4 growth factors
• Big data input

These factors are consolidated into one big data metric. Fundamental information and price data are derived from official data sources, while input for the big data metric is gathered from information that is freely available. A dynamic appraisal process identifies gain/loss opportunities, and a dynamic trailing stop-loss procedure limits the downside for every single holding.

Asset allocation is not fixed, but is currently leaning strongly towards the following areas:

• Pharmaceuticals and medical devices
• Technology hardware
• IT and business services
• Media
• Consumer discretionary products
• Machinery and automotive

To achieve optimal diversification, sub-sector exposure is limited to 20% of invested assets. This limitation offers an optimal guarantee of avoiding overexposure to the same secular growth trend.