Passion for Swiss equities
zCapital strives to achieve an above-average performance for its investors by conducting comprehensive company analysis (bottom-up approach). This fundamental assessment focuses on the qualitative analysis of the business model, company management, market structure, competitive position, quality of the balance sheet and shareholder structure. Besides valuation aspects zCapital is searching for expectation gaps in the earnings development potential of the individual companies versus market expectations.
zCapital does not steer sector allocations but seeks the best investment opportunities in its investment universe. Macroeconomic factors are also considered in the decision-making process.To control the portfolio risk in terms of concentration and liquidity risk, the fund assets are broadly diversified and do not contain any cluster risks.
zCapital is convinced that companies violating human rights, cause environmental pollution or exhibit unethical behaviour toward stakeholders carry substantial risks. In the long run, companies with higher risks in these areas are likely to experience higher volatility and possibly weaker share price performance.
The integration approach is applied at company level, with the objective of identifying such risks at an early stage and reducing them in the portfolio. With this in mind, zCapital has developed its own ESG risk monitor, which incorporates data from Inrate, ISS and Glassdoor.
zCapital follows the guidelines of the Swiss Association for Responsible Investments (SVVK) when defining exclusion criteria. Manufacturers of controversial weapons are excluded. zCapital is member of the Swiss Sustainable Finance SSF. The SSF is an interest group-based association for the promotion of sustainable investment in Switzerland.
In the course of shareholder engagement, zCapital aims to establish direct or indirect contact with companies and to table shareholder concerns. Corporate strategy is questioned and the appropriate ESG aspects are addressed by means of concrete recommendations and the exertion of influence. zCapital maintains a constructive dialogue with companies in the investment universe, usually with the Executive Board. Should it be necessary, members of the Board of Directors may also be contacted, written enquiries may be made, the opportunity to speak at the Annual General Meeting may be leveraged, and requests for items to be included on the agenda may be submitted.
zCapital does not lend securities and always enters shares in the share register. zCapital consistently exercises its voting rights. Information tools such as its own voting guidelines, voting recommendations by Inrate and ISS, corporate governance analyses by Inrate and analyses by internal investment specialists are available for decision-making. On this basis, the votes are exercised in accordance with the long-term interests of the company and its shareholders. A summary report on the exercise of voting rights is published in the annual report of the zCapital Funds.