How we invest

Our in-house capital markets research has always been the heart of DJE. We apply our proven, crisis-tested investment process consistently across all portfolios, with direct company contact as a central element. Our guiding principle: we know more because we do the work ourselves.

Philosophy FMM-Method Individual Securities Selection Research Team Sustainability

A clear Philosophy since 1974

Since our foundation more than 50 years ago, we have attached great importance to making investment decisions based on our own in-house expertise. That has not changed to this day. Our research team analyses global capital markets, speaks with companies and monitors thousands of indicators. Our primary focus is on equities, bonds and gold. The three-dimensional FMM method forms the foundation of our investment philosophy and traces its origins back to the doctoral thesis of our founder, Dr Jens Ehrhardt.

Asset Allocation & Company Analysis

Our Strategy Team analyses the capital markets on an ongoing basis using the FMM Method and derives allocation guidelines from its findings – covering regions, sectors and investment ratios – which apply across all areas of the company. This ensures a consistent view of the world throughout our entire range of products and services. The team brings together members of the Management Board, division heads and experienced portfolio managers. By combining the FMM-Method for asset allocation (top-down) with in-depth analysis of individual securities (bottom-up), we are able to identify and act on specific opportunities at company level. Our independent research is free from group-level directives and conflicts of interest. The selection process happens in stages. First, we screen the global investment universe for companies that meet our sustainability criteria: no defence companies, plus respect for human rights, labour standards, environmental protection and anti-corruption. Next, we look closely at business models, fundamentals and market positioning. Only companies that clear all these hurdles make it through to a final investment decision.

What does the FMM method examine?

Long-term

Fundamental factors

The fundamental factors are usually the decisive driver of long-term performance. Here we examine, among other things, the economic situation in selected economies and assess potential investments against a set of key financial metrics.

Midterm

Monetary factors

Analysing monetary factors allows us to answer the question of how much money can flow into the financial markets. From this we form an overall monetary picture and an assessment of the markets' further potential. Key areas of focus: inflation, money supply growth, lending, etc.

Short-term

Market technical factors

We use a wide range of market technical indicators covering the major equity and bond markets. A proprietary database of sentiment indicators, built up over several decades, plays a big role here.

How we assess individual securities

Analyst assessment

Here, our analysts use their individual sector expertise to evaluate especially the business model, the long-term strategy, the quality of management, balance sheet strength, and future cash flow and dividend potential.

Company meetings

After every company meeting, our analysts assess the statements made by their colleagues. Have past statements been reliable? How is the outlook for the next months judged?

Safety and liquidity

Even in difficult market conditions, investments should always remain sellable. Depending on the sector, a certain company size can also bring higher barriers to market entry. We therefore rate larger, more liquid companies more highly, as they carry lower risks.

Valuation

We consistently monitor daily figures for selected multiples. Target investments are assessed not only on their absolute valuation, but also relative to their own history, to the overall market, and to their sector.

Momentum

"The trend is your friend!" – trends tend to persist, and to a certain extent that holds true for equities as well. Here, the performance of target investments is viewed relative to the sector, to the domestic market, and to the market as a whole.

Sustainability criteria

We assess a wide range of sector-adjusted criteria across the environmental, social and governance (ESG) dimensions. This is based on the analysis and data provided by our external research partner, MSCI ESG Research LLC.

Note: Different sustainability criteria apply to our services in Switzerland than in Germany.

Our research team

A strategy is nothing without the people who bring it to life – in our case, a research team of experienced sector analysts and data specialists. Relationships built over many years give the team access to the management of a wide range of companies, including some that pay relatively little attention to German investors. This network helps us to make better-informed investment decisions.