Vontobel creates an initial investable universe of approximately 350 companies through an investment process that begins with screening FactSet and the Bloomberg Professional Database for companies that meet the following main criteria:
- free cash flow generation
- low or moderate debt
- high return on assets
- high return on equity
- high long-term rates of return on incremental capital, including reinvested earnings
- businesses and industries that are stable, transparent, understandable and unlikely to experience major change
We supplement the screening process with an in-depth evaluation of the certainty of the long-term economic characteristics of each individual business and the quality of its management in terms of its ability to realize the full potential of the business. To be admitted to our portfolio, a company's market price should be below our estimate of its fundamental value.