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SEB Aktienfonds, which specialises in German equities, has been upgraded to Gold status by Standard & Poor’s and was also awarded the rating agency’s 5-year Long-term Fund Management rating at the end of 2011. S&P based the upgrade on the Fund’s consistently sound and above-average performance compared with its peer group and the DAX 30, which it attributed to the very convincing and disciplined fair value stock-picking approach by manager Dr. Jürgen Meyer, head of the European Equities team in Frankfurt. The focus is on premium companies that, for example, have a strong international brand image and are also attractively valued. This approach has seen SEB Aktienfonds generate a performance of 17.07 percent since the beginning of the year and 52.05 percent over three years (in comparison DAX 30: 14.63 and 41.76 percent respectively, as of 30 April 2012).
Jürgen Meyer uses a value-based stock-picking method that avoids the weaknesses seen with commonly used processes, which generally rely on simple valuation ratios. “Ratios alone do not accurately reflect a company’s value and are therefore only of limited use in evaluating its long-term earnings potential”, says Meyer. A company’s fair value is determined by its long-term return on equity. Its business model and market position are crucial factors. “This is why we use an extensive competitive analysis to identify those companies that offer long-term market power and therefore margin strength”, is how Meyer explains value approach.
In line with this, SEB Aktienfonds invests in high-quality companies whose business models add value and whose stock market prices are significantly below their fair values, so that future gains can offset the purchase price. On average, the portfolio consists of 25 to 30 stocks with different market capitalisations. The focus is currently on attractively valued large caps such as Henkel, BMW and BASF. In line with the Fund’s long-term strategy, its average holding period is around five years.
S&P also praised Jürgen Meyer’s more than 12 years of investment experience in the field of European equities management. This is one of the prerequisites for SEB Aktienfonds’ above-average long-term success, together with its highly defensive and consistent investment approach. This fair value investment approach is now also being implemented by the SEB Group’s European Equities fund management team in Stockholm.
S&P’s Gold rating (formerly AA rating) recognises funds that have a very high quality standard compared with their peer group in terms of their investment approach and the continuity of their management. Funds receive the 5-year Long-term Fund Management rating if their quality has been regularly reviewed by S&P for more than five years and have gained at least a Silver rating (formerly A rating).