SaraSelect
Invested with conviction in Swiss quality
Zug, May 2020
Agenda
© VV Vermögensverwaltung AG
Unique Approach
Investment Philosophy
Focus Small Caps
Investment Process
Our Value Added
Outlook / Conclusion
VV Vermögensverwaltung AG
207.05.2020
Unique ApproachSelection is the key to success
© VV Vermögensverwaltung AG 3
We invest with conviction in Swiss quality
Invested in global market leaders, in high quality Swiss small and mid caps
We favor entrepreneurial lead approaches to management lead ones
Distinct stock picking – we have learned to say NO
Preference for B2B against B2C
Vast experience – fund exists since 1996
Amongst the leaders in our industry – assets of CHF ~700 m
07.05.2020
Introduction
Attractive PerformanceSaraSelect ytd as of 8 May -5.78% vs benchmark -12.93%
Source: VV AG, Bloomberg / 30.04.2020
Period 31.01.1996 – 30.04.2020
© VV Vermögensverwaltung AG 408.05.2020
Introduction
0100200300400500600700800900
1'0001'1001'2001'3001'4001'5001'600
1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
YTD 1M 1 yr 3 yr 5 yr 10 yr since inception
Fund -7.87% 10.28% -2.03% 1.67 % p.a. 11.41 % p.a. 9.65 % p.a. 9.19 % p.a.
Index -13.88% 6.00% -6.39% 1.45 % p.a. 6.71 % p.a. 8.01 % p.a. 8.72 % p.a.
Attractive SegmentSwiss World Champions as global leaders in their niches
© VV Vermögensverwaltung AG 5
Sika: Building Envelope Solutions for all
type of Buildings140 million dollar deal
Tesla signs 3-year-contract with Bossard!fff
Nespresso renews contract with Dätwyler
Introduction
Belimo technology in the world’s
highest building
07.05.2020
Ideal formula…
This will automatically lead to better products, high market shares and pricing power
© VV Vermögensverwaltung AG 607.05.2020
Prerequisite for success
Introduction
Success = ƒ(entrepreneurs, passion, culture, focus, time, courage, innovation, responsible
anchor shareholder, not too many short-term oriented financial shareholders)
Competitive forcesHigh market shares as a prerequisite for and result of success
The understanding of competitive forces within an industry allows better decisions
Source: VV AG, VAT, Michael Porter’s “five forces” / 03.03.2020
© VV Vermögensverwaltung AG 7
High correlation of marketshare development and reported margins
07.05.2020
Introduction
MegaTrends
Communication
Environ-ment &Energy
Aging & Lifestyle
Security &Regulation
Urbani-zation
Mobility
Tomorrow’s winners…
Speaking of mega trends there’s no way around involving Swiss companies
© VV Vermögensverwaltung AG 807.05.2020
Attractive Prospects
Introduction
ESG as one criterium for success…
Speaking of ESG, there’s no way around involving Swiss companies
© VV Vermögensverwaltung AG 908.05.2020
UN SDG implementations monitored
Introduction
80.6%
53.8%
10.6%
24.4%
75.0%
49.4% 52.5%
13.1%
86.3%80.0%
11.3%
30.0%
90.0%
61.3%67.5%
20.0%
0%
20%
40%
60%
80%
100%
Good Healthand well
being
QualityEducation
Clean Waterand
Sanitation
Affordableand clean
Energy
Industry,Innovation
andInfrastructure
SustainableCities and
Communities
ResponsibleConsumption
andProduction
ClimateAction
UN SDGs Adoption(8 out of 18 goals taken)
Our universe SaraSelect
Independent
We make our own decision and implementation
-> No conflicts of interest nor blind index tracking
Demanding
We focus consciously on quality
-> Holding of only few but solid companies
Patient
We invest with a timeline of 5 – 7 years
-> No distraction by monthly or quarterly performances
Dedicated
We cultivate an intensive exchange with the companies
-> We get actively involved with the firm
Responsible
Our basic PrinciplesAs investors we are:
Responsible action pays off in sustainable returns
© VV Vermögensverwaltung AG 1007.05.2020
Investment Philosophy
Being invested over the cyclesSuccessful market timing is very difficult
Performance is done in very short periods, missing them leads to much lower results
Source: VV AG, Bloomberg / 30.06.2019
© VV Vermögensverwaltung AG 11
Investment Philosophy
07.05.2020
9.6%
5.2%
2.2%
-2.7%-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
average performance without best 30 days without best 59 days = 1% without best 117 days = 2%
Average yearly return SPISMC Indexfrom 31 January 1996 to 30 June 2019
Being invested over the cyclesVolatility as a sub-optimal risk measure
With 7 years investment horizon no loss is incurred
Source: VV AG, Bloomberg / 31.12.2019
© VV Vermögensverwaltung AG 12
Investment Philosophy
07.05.2020
-20%
0%
20%
40%
60%
80%
100%
120%
140%
160%
180%
200%
SaraSelect rolling 7 year performance
SaraSelect yearly average performance 10.11%
-60%
-40%
-20%
0%
20%
40%
60%
80%
SaraSelect rolling 12 month performance
SaraSelect yearly average performance 10.11%
Swiss small & mid cap yield triangleA long-term horizon is the only guarantee for positive performance
No loss with some years investment horizon
Source: VV AG, Bloomberg / 31.12.2019
© VV Vermögensverwaltung AG 13
Investment Philosophy
07.05.2020
1995
1996 12.8%
1997 28.5% 46.4%
1998 23.5% 29.1% 13.9%
1999 24.3% 28.4% 20.3% 27.0%
2000 24.3% 27.4% 21.6% 25.7% 24.4%
2001 12.6% 12.6% 5.5% 2.8% -7.5% -31.3% Annual Swiss small & mid index returns
2002 6.3% 5.3% -1.4% -5.0% -13.7% -28.1% -24.8%
2003 9.5% 9.1% 3.9% 2.0% -3.5% -11.3% 0.7% 35.0%
2004 9.9% 9.5% 5.1% 3.7% -0.5% -5.9% 4.6% 23.3% 12.6%
2005 12.0% 11.9% 8.2% 7.4% 4.5% 0.9% 11.0% 26.5% 22.4% 33.0%
2006 14.1% 14.2% 11.1% 10.8% 8.6% 6.2% 15.9% 29.1% 27.2% 35.1% 37.3%
2007 13.4% 13.4% 10.6% 10.2% 8.3% 6.2% 14.1% 24.1% 21.5% 24.6% 20.6% 6.0%
2008 7.9% 7.4% 4.5% 3.6% 1.2% -1.3% 3.9% 9.7% 5.2% 3.4% -4.9% -20.9% -40.9%
2009 9.3% 9.0% 6.4% 5.7% 3.8% 1.7% 6.8% 12.3% 8.9% 8.2% 2.8% -6.7% -12.5% 29.6%
2010 10.0% 9.8% 7.4% 6.8% 5.2% 3.4% 8.2% 13.3% 10.5% 10.1% 6.0% -0.6% -2.7% 24.8% 20.1%
2011 7.9% 7.6% 5.2% 4.6% 2.9% 1.1% 5.1% 9.1% 6.2% 5.3% 1.3% -4.6% -7.1% 8.0% -1.5% -19.1%
2012 8.3% 8.0% 5.8% 5.3% 3.7% 2.2% 5.9% 9.6% 7.1% 6.5% 3.1% -1.7% -3.1% 9.6% 3.6% -3.7% 14.6%
2013 9.3% 9.1% 7.1% 6.7% 5.4% 4.1% 7.7% 11.3% 9.2% 8.8% 6.1% 2.2% 1.6% 13.3% 9.5% 6.2% 21.7% 29.3%
2014 9.5% 9.3% 7.5% 7.1% 5.9% 4.7% 8.1% 11.4% 9.5% 9.2% 6.8% 3.5% 3.2% 13.2% 10.2% 7.8% 18.7% 20.8% 12.9%
2015 9.6% 9.4% 7.7% 7.3% 6.2% 5.1% 8.3% 11.4% 9.6% 9.3% 7.2% 4.3% 4.1% 12.9% 10.3% 8.5% 16.7% 17.4% 11.9% 11.0%
2016 9.6% 9.4% 7.7% 7.4% 6.3% 5.3% 8.4% 11.2% 9.6% 9.3% 7.4% 4.8% 4.7% 12.4% 10.1% 8.6% 15.1% 15.3% 10.9% 10.0% 9.0%
2017 10.4% 10.3% 8.7% 8.5% 7.5% 6.6% 9.6% 12.4% 10.9% 10.8% 9.1% 6.8% 6.9% 14.2% 12.4% 11.4% 17.4% 18.0% 15.4% 16.2% 18.9% 29.7%
2018 9.1% 8.9% 7.4% 7.1% 6.1% 5.2% 7.8% 10.3% 8.8% 8.6% 6.9% 4.7% 4.6% 10.7% 8.8% 7.4% 11.9% 11.4% 8.2% 7.0% 5.7% 4.1% -16.4%
2019 9.9% 9.8% 8.3% 8.1% 7.2% 6.4% 9.0% 11.4% 10.0% 9.9% 8.4% 6.4% 6.5% 12.3% 10.7% 9.7% 14.0% 13.9% 11.5% 11.3% 11.3% 12.1% 4.2% 30.0%
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Year in with Swiss small & mid cap index was bought
Ye
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in w
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wis
s s
ma
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old
We define quality as follows:
… invested in Quality IWe have high quality requirements
In many cases, small caps meet these requirements particularly well
© VV Vermögensverwaltung AG 14
Sound Management Trustworthy and entrepreneurial spirit
Attractive Business Model Leading products in several lucrative business markets
Free Cash Flows High level of internal financing
Strong Balance SheetHigh equity ratio, moderate debt level, assets of good
quality
Investment Philosophy
07.05.2020
We try to avoid the following sectors:
In our search of quality we on purpose avoid certain areas
… invested in Quality II
© VV Vermögensverwaltung AG 15
BanksLack of visibility and predictability of income streams,
principle-agent problem, regulatory risks
Insurance CompaniesUnattractive business model, large and risky bond
portfolios especially in times of low interest rates
UtilitiesPolitical and regulatory risks, questionable expansion
abroad, high level of dependency on energy trading
Real EstateUsually represents a separate asset class, which we do
not duplicate
Erratic business model, lack ability of internal financingVenture
(Bio- & Hitech)
Investment Philosophy
07.05.2020
… thanks to innovation leadershipGlobal Innovation Index: Once again, Switzerland is at the top
State-of-the-art infrastructure, outstanding education and an attractive business environment ensure a high level of competitiveness.
Source: VV AG, www.globalinnovationindex.org 2019
© VV Vermögensverwaltung AG 16
Reasons for Switzerland’s
high innovative capacity:
• Sizeable industrial sector
• Over 320’000 small and
medium enterprises
(>99% of all companies)
create innovation
pressure
• Innovation stimulated by
tax reliefs
• State-of-the-art
educational system
Investment Philosophy
07.05.2020
Outperforming Segment in SwitzerlandBy far the best performance in the long run
In the long run, small caps outperform large caps by over 3% yearly and mid caps by over 1%.
Source: VV AG, Bloomberg / 30.04.2020
© VV Vermögensverwaltung AG 17
Period 01.02.1996 – 30.04.2020
Focus Small Caps
07.05.2020
0
200
400
600
800
1000
1200
1400
1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
Small Cap Index Mid Cap Index SMI Total Return
(Perf. 10.09% p.a.)
(Vol. 12.64% p.a.) (Vol. 14.71% p.a.)
(Perf. 8.69% p.a.) (Perf. 7.26% p.a.)
(Vol. 11.18% p.a.)
PositionSmall -
Mid
SaraSelect
(Weighting)
Index
(Weighting)
Performance
YTD
ALSO Holding AG M 9.68% 0.34% 24.27%
Bachem Holding AG S 8.63% 0.30% 49.17%
Sika AG L 6.72% 0.00% -10.93%
LEM Holding SA M 6.31% 0.29% -12.22%
Belimo Holding AG M 6.29% 1.16% -10.01%
Daetwyler Holding AG M 4.40% 0.47% -9.43%
Interroll Holding AG M 4.31% 0.43% -15.68%
Logitech International SA M 4.31% 2.60% 1.48%
Bell Food Group AG S 4.30% 0.18% -5.92%
Bossard Holding AG M 3.79% 0.27% -30.00%
Chocoladefabriken Lindt & Spru M 3.43% 3.01% 2.39%
Gurit Holding AG S 3.29% 0.18% -6.51%
Bobst Group SA M 3.02% 0.13% -11.62%
Huber + Suhner AG M 2.87% 0.39% -17.10%
CPH Chemie & Papier Holding AG S 2.81% 0.07% -15.66%
Total Top 15 74.17% 9.84%
Stable Core PortfolioOur largest positions are all leaders in innovation
Source: VV AG, Bloomberg / 30.04.2020
Small Caps are particularly innovative and are therefore prominent holdings in our portfolio
© VV Vermögensverwaltung AG 18
The larger our positions,
the higher the degree of
our long-term conviction.
We must not invest more
than 10% of our fund
assets in a single
company. Furthermore,
the fund is not allowed to
hold more than 10% of the
voting rights of a company.
07.05.2020
Focus Small Caps
Segment allocation
Distinct Portfolio Profile
Relative sector weights SaraSelect vs Benchmark
Focus on smaller companies and industrials
Rather small companies with a strong industrial footprint offer solutions for megatrendsleading to structural growth from which they benefit.
Source: VV AG, Bloomberg / 30.04.2020
© VV Vermögensverwaltung AG 1907.05.2020
Our Value Added
23.9%
10.5%
-2.8%
-4.0%
2.9%
-2.2%
-27.1%
-0.4%
-0.8%
-30% -15% 0% 15% 30%
Industrials
Technology
Consumer Goods
Health Care
Basic Materials
Consumer Services
Financials
Telecommunication
Utilities
34.6%
62.4%
30.5%
63.4%
89.2%
10.8%0%
20%
40%
60%
80%
100%
SMIM Mid Caps Small Caps
SaraSelect P CHF SPI Small & Mid Cap Index
Balance sheet quality
Robust and attractive valued Companies
Valuations
Well-equipped for challenging economic environment
7% discount for twice as solid balance sheets
Source: VV AG, Bloomberg / 30.04.2020
© VV Vermögensverwaltung AG 2007.05.2020
Our Value Added
53%
24%
43%
48%
0%
10%
20%
30%
40%
50%
60%
Equity in % of assets Intangible assets in % of equity
SaraSelect Small & Mid Cap Index
24.9
14.4
4.42.1
23.0
14.8
4.22.9
0
5
10
15
20
25
30
P/E 2020 EV/EBITDA2020
Price/Bookvalue
Dividend yield(%)
SaraSelect P CHF SPI Small & Mid Cap Index
Attractive Business Model IIIInterroll: Impressive revenue development in constant currencies
The real value added is becoming visible in constant currencies, this explain nicely the actual valuation
and market perception.
Source: VV AG, Interroll 2020
© VV Vermögensverwaltung AG 2107.05.2020
Our Value Added
0
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Revenues in mn CHF Revenues at constant FX Market cap in mn CHF (rhs)
10-year local FX sales CAGR 11%
Attractive Yield in the Long-termNet performance of over 9% per annum since inception
Quelle: VV AG, Bloomberg / 30.04.2020
© VV Vermögensverwaltung AG 2207.05.2020
Our Value Added
YTD 1M 1 yr 3 yr 5 yr 10 yr since inception
Fund -7.87% 10.28% -2.03% 1.67 % p.a. 11.41 % p.a. 9.65 % p.a. 9.19 % p.a.
Index -13.88% 6.00% -6.39% 1.45 % p.a. 6.71 % p.a. 8.01 % p.a. 8.72 % p.a.
0
200
400
600
800
1'000
1'200
1'400
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1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
SaraSelect P CHF (NAV Div.adj.)
-60%
-40%
-20%
0%
20%
40%
60%
96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20
SaraSelect P CHF SPI Small & Mid Cap Index
Segment performanceSmall Caps short-term neglected
Smaller companies are more innovative, the RISK-OFF mode will fade away again
Quelle: VV AG, Bloomberg / 30.04.2020
© VV Vermögensverwaltung AG 2307.05.2020
Our Value Added
Relative performance contributionsBachem as a clear highlight
Heavy weights with big temporary setbacks – RISK-OFF
Quelle: VV AG, Bloomberg / April 2020
© VV Vermögensverwaltung AG 2407.05.2020
Our Value Added
Stable Payout over YearsAppealing especially to private investors thanks to non-taxation of capital gains
Constant yearly payout, usually above Swiss government bond yield
Source: VV AG, Bloomberg / December 2019
© VV Vermögensverwaltung AG 25
Our Value Added
07.05.2020
-1%
0%
1%
2%
3%
4%
5%
-5
0
5
10
15
20
25
96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19
Dividend payout per share Capital payout per share
Yield SaraSelect (rhs) Yield 10y Swiss Gov (rhs)
Global PMI stands with 39.8 not in growth territory anymore. Europe with 33.4 worsening because of Germany (34.5). The US at low 41.5.
Switzerland 40.7 still below 50, other readings as well are lower than the previous month.
Italy due to crisis at 31.1 and China back to 50.8 after 52.
Leading Indicator as a Compass in the DarkStill good global growth ahead…
Source: VV AG, Bloomberg / 05.05.2020
© VV Vermögensverwaltung AG 26
Global Purchasing Manager Index (PMI Manufacturing)
07.05.2020
Outlook
Apr 20 Mar 20 Feb 20 Jan 20 Dec 19 Nov 19 Oct 19 Sep 19 Aug 19 Jul 19 Jun 19 May 19 Apr 19
Global 39.8 47.3 47.1 50.3 50.1 50.3 49.8 49.8 49.6 49.3 49.4 49.8 50.4
Switzerland 40.7 43.7 49.5 47.8 48.8 48.5 48.9 44.9 47.4 45.2 48.6 49.0 49.1
Euro zone 33.4 44.5 49.2 47.9 46.3 46.9 45.9 45.7 47.0 46.5 47.6 47.7 47.9
Germany 34.5 45.4 48.0 45.3 43.7 44.1 42.1 41.7 43.5 43.2 45.0 44.3 44.4
France 31.5 43.2 49.8 51.1 50.4 51.7 50.7 50.1 51.1 49.7 51.9 50.6 50.0
Italy 31.1 40.3 48.7 48.9 46.2 47.6 47.7 47.8 48.7 48.5 48.4 49.7 49.1
UK 32.6 47.8 51.7 50.0 47.5 48.9 49.6 48.3 47.4 48.0 48.0 49.4 53.1
USA 41.5 49.1 50.1 50.9 47.8 48.1 48.5 48.2 48.8 51.3 51.6 52.3 53.4
Japan 41.9 44.8 47.8 48.8 48.4 48.9 48.4 48.9 49.3 49.4 49.3 49.8 50.2
China 50.8 52.0 35.7 50.0 50.2 50.2 49.3 49.8 49.5 49.7 49.4 49.4 50.1
Global PMI stands with 37.0 not in growth territory anymore. Europe with 11.7 worsening because of Germany (15.9). The US at low 27.0.
Switzerland 21.4 well below 50, other readings as well are lower than the previous month.
Italy due to crisis at 17.41 and China back to 43 after 26.5.
Leading Indicator as a Compass in the DarkStill good global growth ahead…
Source: VV AG, Bloomberg / 05.05.2020
© VV Vermögensverwaltung AG 27
Global Purchasing Manager Index (PMI Manufacturing)
07.05.2020
Outlook
Apr 20 Mar 20 Feb 20 Jan 20 Dec 19 Nov 19 Oct 19 Sep 19 Aug 19 Jul 19 Jun 19 May 19 Apr 19
Global 37.0 47.1 52.7 52.0 51.6 51.0 51.4 51.7 52.5 51.9 51.6 52.7 53.7
Switzerland 21.4 28.1 51.9 57.3 51.3 52.6 54.5 55.8 54.9 48.9 53.7 56.1 61.8
Euro zone 11.7 26.4 52.6 52.5 52.8 51.9 52.2 51.6 53.5 53.2 53.6 52.9 52.8
Germany 15.9 31.7 52.5 54.2 52.9 51.7 51.6 51.4 54.8 54.5 55.8 55.4 55.7
France 10.4 27.4 52.5 51.0 52.4 52.2 52.9 51.1 53.4 52.6 52.9 51.5 50.5
Italy 17.4 52.1 51.4 51.1 50.4 52.2 51.4 50.6 51.7 50.5 50.0 50.4 53.1
UK 12.3 34.5 53.2 53.9 50.0 49.3 50.0 49.5 50.6 51.4 50.2 51.0 50.4
USA 27.0 39.8 49.4 53.4 52.8 51.6 50.6 50.9 50.7 53.0 51.5 50.9 53.0
Japan 22.8 33.8 46.8 51.0 49.4 50.3 49.7 52.8 53.3 51.8 51.9 51.7 51.8
China 43.0 26.5 51.8 52.5 53.5 51.1 51.3 52.1 51.6 52.0 52.7 54.5 54.4
Swissmem exportsSome countries are more important…
Germany makes up over 25% of all Swissmem exports
Source: VV AG, Swissmem / 30.04.2020
© VV Vermögensverwaltung AG 28
Swissmem (machine, electro & metal industry)
07.05.2020
Outlook
0.0
5.0
10.0
15.0
20.0
25.0
30.0
Swissmem Industry 1Q 2020 exports(Countries in % of total Swissmem (machine, electro + metal) exports)
Leading Indicators as compassFreight forwarders as leading indicators
China back to about 95% of the pre Covid-19 level
Source: VV AG, ZKB, GS, Bloomberg / 30.04.2020
© VV Vermögensverwaltung AG 29
Kühne + Nagel as a proxy for many companies
11.05.2020
Outlook
China is back
Leading Indicators as compass
Daimler as a proxy for many companies
China as leading indicators
China back to pre Covid-19 level
Source: VV AG, Daimler / 30.04.2020
© VV Vermögensverwaltung AG 3011.05.2020
Outlook
Leading Indicators as compassFreight forwarders as leading indicators
Some sort of V-shape recovery expected, after 90m units only 71m
Source: VV AG, Osram / 30.04.2020
© VV Vermögensverwaltung AG 31
Kühne + Nagel as a proxy for many companies
07.05.2020
Outlook
Structural growth intact
German car industry production
Pent-up demand as in 2009 ?
Shrinking on yearly basis – but high pent-up demand for the years to come
5-6mn yearly produced cars, actual low levels seen in the past with corresponding rebounds
Source: VV AG, Bloomberg / 30.04.2020
© VV Vermögensverwaltung AG 3207.05.2020
Outlook
Anatomy of bear markets
Anatomy of bear markets
Speed of recovery
(to) fast recovery – aggressive central banks stabilize everything
Quelle: VV AG, ZKB, GS, Bloomberg / 30.04.2020
© VV Vermögensverwaltung AG 33
Impact of Covid-19 as «Event Driven», very rapid and harsh correction and subsequent rebound, thecomplete recovery will need some time, 1Q2020 > 2Q2020
07.05.2020
Outlook
Anatomy of bear markets (GS Study: all bear markets of the S&P500 Index since 1800)
-60%
-50%
-40%
-30%
-20%
-10%
0%
Average setback in %
0
5
10
15
20
25
30
35
40
45
50
Average duration in months
0
20
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60
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Average duration of the recovery
2 in 1: Home Bias and Emerging Markets ExposureMassive outperformance in Swiss francs
Smart strategy: Bias to home market combined with exposure to emerging marketsthrough global acting, well-positioned Swiss small caps
Source: VV AG, Bloomberg / 30.04.2020
© VV Vermögensverwaltung AG 34
Performance comparison since 1995
07.05.2020
Outlook
0
200
400
600
800
1000
1200
1400
1600
1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Small Cap Index (SPI19) inCHF / 10.24% p.a.
MSCI Emerging Markets inlocal Ccy / 6.12% p.a.
MSCI Emerging Markets inCHF / 2.09% p.a.
Equities have to rise furtherRenewed P/E expansion likely, risk reward still favorable
The earnings will have to be slightly adapted, depending on the final impact of corona
Source: VV AG, Bloomberg / 30.04.2020
© VV Vermögensverwaltung AG 07.05.2020 35
Outlook
P/E SPI +/- P/E SPI +/- P/E SPI +/- P/E SPI +/- P/E SPI +/- P/E SPI +/-
5.00% 22.3 9'892 -17% 20.0 8'855 -26% 16.7 7'379 -38% 15.0 6'638 -44% 14.3 6'325 -47% 12.5 5'535 -54%
4.50% 25.2 11'136 -6% 22.2 9'839 -17% 18.2 8'050 -32% 16.2 7'176 -40% 15.4 6'812 -43% 13.3 5'904 -50%
4.25% 26.8 11'883 0% 23.5 10'418 -12% 19.0 8'434 -29% 16.9 7'479 -37% 16.0 7'084 -40% 13.8 6'107 -49%
4.10% 28.0 12'382 4% 24.4 10'799 -9% 19.6 8'682 -27% 17.3 7'674 -36% 16.4 7'259 -39% 14.1 6'236 -48%
4.00% 28.8 12'738 7% 25.0 11'069 -7% 20.0 8'855 -26% 17.6 7'809 -34% 16.7 7'379 -38% 14.3 6'325 -47%
3.75% 31.0 13'725 15% 26.7 11'807 -1% 21.1 9'321 -22% 18.5 8'169 -31% 17.4 7'700 -35% 14.8 6'560 -45%
3.59% 32.6 14'436 21% 27.8 12'330 4% 21.8 9'644 -19% 19.0 8'416 -29% 17.9 7'919 -33% 15.2 6'718 -44%
3.00% 40.4 17'882 50% 33.3 14'759 24% 25.0 11'069 -7% 21.4 9'481 -20% 20.0 8'855 -26% 16.7 7'379 -38%
2.50% 50.6 22'407 88% 40.0 17'711 49% 28.6 12'651 6% 24.0 10'618 -11% 22.2 9'839 -17% 18.2 8'050 -32%
2.00% 67.8 29'998 152% 50.0 22'138 86% 33.3 14'759 24% 27.2 12'065 1% 25.0 11'069 -7% 20.0 8'855 -26%
1.00% 210.1 93'019 681% 100.0 44'277 272% 50.0 22'138 86% 37.5 16'583 39% 33.3 14'759 24% 25.0 11'069 -7%
0.50% -4166.7 -1'844'873 -15596% 200.0 88'554 644% 66.7 29'518 148% 46.1 20'404 71% 40.0 17'711 49% 28.6 12'651 6%
0.25% -365.0 -161'595 -1457% 400.0 177'108 1388% 80.0 35'422 198% 52.1 23'061 94% 44.4 19'679 65% 30.8 13'624 14%
*Risk premium = equity yield (Reverse P/E ratio) ./. bond yield
3.00%
ltr averagetoday
-0.524% 0.00% 1.00% 1.67% 2.00%
10yr Swiss Government Bond
Ris
k p
rem
ium
Net interest spending rising to 2.6% of GDP
Interest rates can not move up
Budget deficit to rise to 5.5% of GDP
Crowding out as a future potential danger to the system
Interest rate have to stay low short-term and will eventually dramatically increase
Source: Congressional Budget Office: «The 2020 Long-term Budget Outlook» / VV AG
© VV Vermögensverwaltung AG 3607.05.2020
Outlook
0.0
5.0
10.0
15.0
20.0
25.0
1.7 2.6
9.0 7.8
5.4 7.0
4.9
6.0
2020 2030
Spending% of Gross Domestic Product
Social Security
Major Health CarePrograms b
Other NoninterestSpending a
Net Interest
0.0
5.0
10.0
15.0
20.0
25.0
4.5 5.5
1.41.21.11.3
5.95.9
2020 2030
Revenues% of Gross Domestic Product
Individual Income Taxes
Payroll Taxes
Corporate Income Taxes
Other Revenues c
Deficit
Little euphoria in the marketsSentiment in the US crashing
No exuberance visible in the equity markets yet
Source: VV AG, Bloomberg / 30.04.2020
© VV Vermögensverwaltung AG 07.05.2020 37
Outlook
60
70
80
90
100
110
120
130
140
150
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
State Street Institutional Confidence Index2005 - 2019
USA Europe
Euphoria
No overvaluation visible yetIndicator in neutral territory
Still a long way to go for the Swiss equity market
Source: VV AG, Bloomberg / 30.04.2020
© VV Vermögensverwaltung AG 07.05.2020 38
Outlook
2'000
4'000
6'000
8'000
10'000
12'000
14'000
-4
-2
0
2
4
Jan 2005 Jan 2007 Jan 2009 Jan 2011 Jan 2013 Jan 2015 Jan 2017 Jan 2019
SPI and 10y Swiss Government Yield(3 year, normalized standard deviation)
Norm. SD 10y Swiss Gov. SPI Index (rhs)
Equity
BU
Y s
ignal ->
Equity
<-
SE
LL
sig
nal
Attractive total return of 7.8% p.a.Investors fear drawdowns more than they enjoy performance
The average performance is at an attractive long-term 7.8% p.a. but negative years happen regularly
Source: Pictet / VV AG; log scale
© VV Vermögensverwaltung AG 3907.05.2020
100
1'000
10'000
100'000
1925 1935 1945 1955 1965 1975 1985 1995 2005 2015
Swiss stocksYearly total returns (average 7.83 % p.a.)
-37.5%-46.5%
-41.3%
-42.3%
-34%
Outlook
Value generating sectors – business modelsBig differencies in the longer run
Sectors with low barriers to entry should be avoided systematically
Source: Bloomberg / VV AG / 30.04.2020
© VV Vermögensverwaltung AG 4007.05.2020
Outlook
High resilience during the financial crisis
Attractive Example
Long-term structural growth success story
Sika much less cyclical than usually perceived
Unlucky categorizations lead to misperceptions
Source: VV AG, Bloomberg / 22.01.2020
© VV Vermögensverwaltung AG 4107.05.2020
Outlook
0
100
200
300
400
500
600
700
800
5.0%
7.0%
9.0%
11.0%
13.0%
15.0%
17.0%
200
6
200
7
200
8
200
9
201
0
201
1
201
2
201
3
EBITDA (rhs) EBITDA margin (lhs)
0.0
5000.0
10000.0
15000.0
20000.0
25000.0
30000.0
10.0%
11.0%
12.0%
13.0%
14.0%
15.0%
16.0%
17.0%
18.0%
19.0%
20.0%
200
0
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
200
9
201
0
201
1
201
2
201
3
201
4
201
5
201
6
201
7
201
8
201
9
Sales (rhs) EBITDA margin (lhs)
Global Covid-19 spread not a question, speed and impact will be decisive
After China now Europe and the US affected as well – sentiment suffers
Many roadshows, general assemblies, events canceled – alternative platforms
Chinese factories are ramping up again, logistics still a big problem
Central bank reactions show negative potential on the credit side (junk burst)
Next weeks will be decisive, mid-term mainly structural trends intact
“ThereIsNoAlternative” more stringent than before
Short-term outlookCovid-19 related uncertanties
Structural trends will reemerge, as soon as “dust settles”
© VV Vermögensverwaltung AG 4207.05.2020
Outlook
Swiss culture and mindset enable sustainable market leaders
Alignment of interests with management is crucial – good CG decisive
Exclude dangerous business models – say NO
High barriers to entry protect companies
B2B is more stable than B2C
Structural growth outweights cyclical growth
ConclusionInvested with conviction in Swiss quality
SaraSelect offers you immediate access to a portfolio of well-positioned market-leadersenabling structural growth and mega-trends
© VV Vermögensverwaltung AG 4307.05.2020
Conclusion
Foundation 1995
Number of shareholders 2
Business activity Fund manager of SaraSelect / individual mandates in Swiss equities
Domicile Lauriedstrasse 7, 6302 Zug
Legal form Corporation
Share capital > CHF 1mn
Supervision FINMA (Swiss Financial Market Supervisory Authority FINMA(authorized asset manager of collective investment schemes)
Auditor PricewaterhouseCoopers AG, Zurich
VV Vermögensverwaltung AGVast know-how and experience as asset managers of Swiss equities
07.05.2020© VV Vermögensverwaltung AG
Marc Possa, CFA Katharina Rauch Thomas Buri, CFA
44
VV Vermögensverwaltung AG
Share Class P (Private) Share Class C (Clean) Share Class I (Institutional)
Fund Category Equity Fund Equity Fund Equity Fund
Fund Management JSS Investmentfonds Ltd, Basel JSS Investmentfonds Ltd, Basel JSS Investmentfonds Ltd, Basel
Portfolio Management VV Vermögensverwaltung AG, Zug VV Vermögensverwaltung AG, Zug VV Vermögensverwaltung AG, Zug
Custodian Bank J. Safra Sarasin Ltd, Basel Bank J. Safra Sarasin Ltd, Basel Bank J. Safra Sarasin Ltd, Basel
Fund Domicile Switzerland Switzerland Switzerland
Securities Number 123 406 23 229 560 27 229 341
ISIN CH0001234068 CH0232295607 CH0272293413
Date of Inception 1. February 1996 25. February 2014 22. April 2015
Currency CHF CHF CHF
Accounting Period 1. September – 31. August 1. September – 31. August 1. September – 31. August
Subscriptions/Redemptions Daily Daily Daily
Payout Date December December December
Total Expense Ratio 1.71% 1.20% n.a.
of which Management Fees 1.50% 1.00% 0.90%
Benchmark SPI Small & Mid Caps® SPI Small & Mid Caps® SPI Small & Mid Caps®
German Tax Transparency Transparent Transparent Transparent
SaraSelect Fund DetailsOverview share classes
Source: JSS Investmentfonds Ltd / December 2019
07.05.2020© VV Vermögensverwaltung AG 45
Many thanks for your interest and your attention!
© VV Vermögensverwaltung AG
VV Vermögensverwaltung AG
Lauriedstrasse 7 • Postfach 7837 • CH-6302 Zug
T + 41 41 720 47 90 • F +41 41 720 47 91
[email protected] • www.vv-ag.ch
07.05.2020 46
While VV Vermögensverwaltung AG has made every effort to ensure that the information on this document iscorrect at the time of publication, VV Vermögensverwaltung AG can make no representation or warranty (includingliability to third parties) either expressly or by implication as to the accuracy, reliability or completeness of the saidinformation. If it’s not stated explicitly otherwise, all figures are unchecked.
Past performance does not guarantee future returns. The performance shown does not take account of anycommissions and costs charged when subscribing and redeeming units. The performance figures include all costscharged to the fund (net performance). The performance calculation is based on net asset values (NAV) withdividends reinvested. Additional commissions, costs and taxes on the level of the investor affect the performancenegatively. The bank and/or the fund's broker may receive or pay a one-off and/or recurring commission inconnection with this product, the amount of which will be communicated to you upon request. Furthermore,investments in foreign currencies include a foreign exchange risk which may increase or decrease the return dueto currency fluctuations.
Persons domiciled in the USA or US nationals are not permitted to hold shares in SaraSelect, and units inSaraSelect may not be publicly sold, offered or issued to anyone residing in the USA or to US nationals. Thispublication is intended only for investors in Switzerland.
The prospectus including management regulations of the Fund, the simplified prospectuses as well as the annualand semi-annual reports are available free of charge from the custodian bank (Bank J. Safra Sarasin Ltd,Elisabethenstrasse 62, P.O. Box, CH-4002 Basel, Switzerland) or the fund manager (JSS Investmentfonds Ltd,Wallstrasse 9, CH-4002 Basel, Switzerland).
DisclaimerImportant legal information
© VV Vermögensverwaltung AG 4707.05.2020