2017 may have some surprise or other in store for investors. What does that mean for Small & Mid Caps?
Björn Glück: Actually, a relatively high level of volatility is to be expected in the financial markets in 2017. This is due not least to the growing protectionist and separatist tendencies in some countries as well as US economic policy which is still very hard to predict. On the other hand, on account of their high degree of adaptability, smaller companies have proven repeatedly that they are able to compensate relatively quickly for the loss of entire markets. They have often extended their sales markets across the whole world which creates a sound base. Also, I am relatively optimistic that we will soon see a rational economic policy in the USA and that Brexit will be handled sensibly. All in all 2017 could be a good year for equities because the economic situation is now improving significantly.
Which sectors are you looking at this year?
Björn Glück: As a matter of principle, we are not pursuing any special sector-oriented approach because we are interested in individual stocks. However, there are very interesting companies in the technology sector at the moment. That is why there is currently a predominance of more cyclical stocks from the industry and technology sector, especially the semiconductors sector. Moreover, the Fund is positioned in the telecommunications market.
What do you look at when you select companies?
Björn Glück: We are stock pickers. This means that as a matter of principle we only pick companies for the Fund when we are fully confident about them. The primary factors for selection are the earnings performance, market position, the market environment and of course an attractive valuation. We verify all these factors by personal meetings with the management of the companies in order to get a reliable impression. At the same time we consciously allow ourselves the freedom to deviate from the consensus and thus exploit market opportunities. And in this way we have done rather well in recent years.