Asset consulting with VVK Value Fund Strategies

Invest like Warren Buffet – with a safety margin.
Intelligent asset management based on the concept of Value Investing.

“Buy one dollar, but don’t pay more than 50 cents for it.” – Warren Buffet

Make long-term investments like the biggest investors of all time – with VVK Value Fund Strategies.

Value investment funds: Value investing even for small investors

With the assistance of the widely diversified Value Fund Strategies of VVK AG, smaller investors can also benefit from the advantages of Value Investing. From the value funds that are offered in Switzerland today, asset manager, Dr Oxana Bärtsch of VVK AG, establishes five strategies with different risk profiles, i.e. different proportions of shares and/or bonds. The Demeter strategy combines the Value Investing concept with the investment in long-term assets. 70% of all VVK Value Fund Strategies are invested or hedged in Swiss francs.

“As far as I am concerned, the stock market doesn’t exist. It is only there as a reference to see if anybody is offering to do anything foolish.” – Warren Buffett

VVK Value Fund Strategies

Up until 10 years ago, there were very few value investment funds on the Swiss market. After 2011, VVK AG gradually established close cooperation with around one hundred value fund managers worldwide, some of whom are very well-known in the professional community for their consistent investment successes. VVK AG works together, for example, with one of the oldest investment firms, Tweedy Browne, and renowned current investment giants like Dr Hendrik Leber, Prof. Max Otte, Thomas Braun, and Georg von Wyss, etc.

These funds are made available to the investor via zweiplus bank. This is one of the most inexpensive providers in Switzerland in terms of fees. Investing is already worthwhile for one-time investment amounts of CHF 10,000, or CHF 100 in a monthly fund savings plan.
Invest like a value investor with the VVK Fund Strategies!

eng_19_12_31_Factheet_Value_Fondsstrategien_alle

What is value investing?

The “Value Investing” investment style is one of the most successful investment strategies worldwide. Value investors and fund managers invest in securities of strong companies that are being sold on the stock market at an inexpensive price for a variety of reasons. Based on the effective figures, the value expert first checks the correct value of the company in the respective balance sheet, and only then invests.

Value investments and value funds are also traded on the stock market and are subject to the well-known market fluctuations; these are often more interlinked, from a value expert’s point of view, with stock market psychology than with the correct valuation of the company.

Value Investing requires the ability to valuate a company without any emotion, as well as strict discipline, patience, and a long-term investment horizon.

The basic principles of this investment style were developed by Prof. Benjamin Graham and David Dodd at Columbia University N.Y. (Columbia Business School) from 1930, and were described in the book “Security Analysis” in 1934.

One of his students, and the most famous value investor today, Warren Buffett, has been successfully applying this investment style for decades.

Why Value Investing?

With the consistent implementation of the Value Investing concept, Warren Buffett has built up a billion-dollar empire. His investment firm, Berkshire Hathaway, is among the top ten most profitable companies according to the US magazine Forbes. Over the past 50 years, he has averaged 21% annual returns.

Various scientific studies have continuously proven the overperformance of value investments: since 1926, value investments have generated an average of plus 4% per annum, compared to the results of the “normal” stock market development.

VVK AG has thus only been investing in value funds since 2011. The value strategy is especially better in years of stagnating or even falling stock markets.

This was particularly noticeable in 2011: the global stock index MSCI had had virtually no performance for 10 years (see “Das verlorene Jahrzehnt”, Erwin W. Heri, 2011). The few investment funds that had a positive performance at the time were those that invested using the Value Investing concept.

This is how the non-value investor does it: Investor behaviour and psychology on the stock market

“90 percent of the stock market is emotions,” said the famous stock market expert André Kostolany. The simple investor is overwhelmed by the flood of news and thus reacts both in panic and incorrectly. Rising prices strengthen his confidence, falling prices scare him. This “pro-cyclical” behaviour inevitably leads to losses, as one buys the stocks at inflated prices and sells them too low.

Value Investing – that means investing with a system

The Value Investing concept is the best approach to resist the false psychological impulses described above. Since the buying and selling decisions in this concept are made according to a clear system (“What is the real value of the company?”), you don’t run the risk of being influenced by the greed and fear of the stock market. In addition, the value fund manager makes sure to invest in companies with good future-oriented business models and reputable management, and which, for whatever reason, are on the market “at a relatively low price”.

Value Investing can be simplified into 3 steps:
1. The value fund manager uses the data from the balance sheet to estimate the “net asset value” of the company.

2. He compares the “net asset value” to the company’s share price on the stock market. If this is much lower (generally 30% to 40% lower, so-called “safety margin”), he buys this “undervalued” stock.

3. As soon as the stock market price increases, and in the best case exceeds the net asset value, he resells this “overvalued” stock and thus generates a positive return.

The current performance of the VVK fund strategies

The results on the fact sheet below are current. However, for legal reasons, the fund names of these fact sheets are anonymised. When you are a customer of VVK AG with the appropriate contractual arrangements, we will gladly provide you with an open fund list, also monthly on request.

FACTSHEET
DEMETER VALUE