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 Stock Selection Research 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 continuously analyzes the capital markets on the basis of the FMM method and derives allocation guidelines with regard to regions, sectors and investment quotas for all parts of the organisation. In this way, we ensure a harmonized global view across all our products and services. The team consists of board members, division heads and experienced portfolio managers. With the combination of the FMM method for asset allocation ("top-down") and well-founded individual stock analysis ("bottom-up"), we are able to assess and exploit specific market opportunities for companies. Our independent research is free of corporate guidelines and conflicts of interest. In a multi-stage selection process, we first filter the global investment universe for companies that meet our sustainability criteria. These include the exclusion of arms companies, compliance with human rights, labor standards, environmental protection and the avoidance of corruption. We then analyze companies according to their business models, fundamental data and market positioning. We only make concrete investment decisions once the companies have qualified according to our strict selection criteria.

What does the FMM method consider?

Long-term

Fundamental factors

The fundamental factors are decisive for the long-term asset allocation. We examine the economic development of the major economies and evaluate the market as a whole on the basis of certain hand picked key indicators.

Medium-term

Monetary factors

We analyze monetary factors to estimate how much money can flow into the financial markets. From this, we derive an overall monetary picture with a view to the further potential of the markets. In focus: Money supply, credit growth, inflation and capital requirements, among other factors.

Short term

Technical market factors

We draw on a comprehensive range of technical market indicators for the most important international equity and bond markets. Our own database of sentiment indicators, which we have compiled ourselves over decades, is a key factor here.

How we evaluate individual stocks

Analyst assessment

Here, our analysts use their individual sector experience to evaluate the business model, the company's long-term strategy, the management quality, balance sheet solidity, and future cash flow and dividends potential.

Company talks

After each company meeting, our analysts evaluate the statements made by the interviewees. Were the statements made in the past reliable? What is the outlook for the next months? Can the company exceed consensus expectations?

Security and liquidity

Even in difficult times, it should be possible to sell investments. Depending on the sector, there is a correlation between size and market entry barriers. We value larger and more liquid companies higher due to lower risks.

Rating

Daily updated ratios are measured against the relevant key multiples. Here we look at valuation in a historic context, against the sector and the broader market.

Momentum

"The trend is your friend!" - Trends generally continue, and this also applies to shares, at least to a certain extent. We measure the relative performance of the targeted investment against the respective sector, the region and the broader market.

Sustainability criteria

We evaluate a multitude of sector-specific adjusted criteria from the areas of Environment, Social & Governance (ESG). This is based on the analyses and data provided by our external research partner, MSCI ESG Research LLC.

Our research team

A strategy is nothing without those who bring it to life. In this specific case: our 16-strong research team consisting of experienced sector analysts and data specialists. Thanks to relationships built up over many years, the team has access to the management of a wide range of companies - including those that are less familiar to investors from Germany. This network helps us to make more qualified investment decisions.