Investing in Equities

Use of the share price potential of equities

At the core of our active investment philosophy and investment process lies our belief that capital markets are not entirely efficient: not all publicly available information is correctly considered by the market all the time. Market valuations at a given point in time merely reflect the balance of the market participants’ expectations – but not necessarily all relevant that is actually available. With our own comprehensive research, we identify the most important factors for market prices and spot inefficiencies in the market. These factors comprise financial as well as non-financial aspects (e.g. ESG factors, carbon footprint and reputational risks/exclusions).

On this basis, we uncover investment opportunities which we profitably exploit for our funds. We ensure this through disciplined, clear and yet flexible investment and decision-making processes. This process is centered on the timely recognition of investment themes and trends and the resulting selection of securities with above average share price potential. Our team structure, and the fact that each fund is managed by one portfolio manager, ensures clear accountability for research as well as on the portfolio construction. The results are constantly reviewed by our integrated portfolio monitoring and risk management process.

Our beliefs

Active Portfolio Management	Capital market inefficiencies offer opportunities for alpha
Proprietary fundamental research	Proprietary research capabilities form the foundation for an information advantage A truly global and interactive network of investment professionals can leverage information more effectively Efficient integration and centralized access to all in-house research (e.g., micro, macro, and ESG) facilitates the creation of alpha ideas
Consistent investment process	A uniform framework and clear accountability at each step of the process ensure quality decision making for all clients Continuous quality management protects and promotes further development of high-quality investment standards.
Our mission	We want to be a leading active investor, who delivers alpha to our clients by leveraging our investment talent using our quantitative and fundamental approach, to capitalize on market inefficiencies in a responsible manner.

Our primary mission is to be the partner of choice for our clients and to help them fulfil their financial objectives by following and implementing their investment beliefs as well as their stewardship responsibilities. Within DWS we manage multiple strategies for our clients to meet their varied investment objectives. Our aim is to ensure that, to the best extent possible, these strategies are managed according to a common mission and philosophy. Our goal is to deliver strategies to our clients that preserve and enhance risk adjusted returns.

Our strengths in equity investments

Equity Strategies

With our equity strategies, we cover almost all global regions with different investment styles.

Global

Global Equities Blend

Qualitative and quantitative criteria are analysed for this bottom up, stock picking strategy. These are: sustainability of business model, quality of management, organic growth, balance sheet and accounting model, valuation. Benchmark is the MSCI World (NDR) in Euro.

Global Equity Income

Our Global equity income strategy is focusing on companies with above average dividend yield, reasonable dividend growth and sustainable dividend coverage. For that reason this stock picking strategy is especially searching for quality stocks with strong balance sheet and free cash flow, low net debt and good credit rating.

ESG Global Equity Income

Our Global ESG equity income strategy focusing on companies with excellent ESG criteria, (https://dws.com/solutions/esg/) above average dividend yield, reasonable dividend growth and sustainable dividend coverage.

Europe

The investment process of the Infrastructure team uses leading discounted cash flow methods and strict quality assessments. This allows the full audit of companies, industries, regions and capital markets.

Global
International (ex USA)
Regional, including US, Asia, Australia and Europe

Germany

German Equities

German equity strategy focusing on firms sustainable business models and strong balance sheets. The investment universe consist of CDAX large cap companies with flexible addition of high quality small/mid caps.

Emerging Markets

DWS Emerging Markets Equities Strategy

Emerging economies are not homogenous, each reacting differently to global and local events. In the DWS emerging market team, we believe in global perspective and local knowledge. We have investment teams locally based in Asia, Latin America and Europe led by experienced portfolio managers. Our process starts with country and currencies allocation, with stock and sector selections based on their fit for the given environment. We have a strong focus on risk-adjusted relative performance, seek to avoid taking excessive, unintended or unnecessary risks.

Small Caps

European Small & Mid Cap Equities

This strategy focuses on small and medium-sized companies, which are often more innovative than their large-cap counterparts and they can therefore offer greater earnings growth (EPS) and better long-term performance results since inception of the European Small/Mid-Cap indices in 2000. This equity segment should also reward actively managed strategy with a focus on bottom up stock selection based on own fundamental research, because the coverage by sell-side analysts is much lower and results in a higher information inefficiency and greater potential for alpha generation. DWS’ principal selection criteria include “Quality”, “Structural Growth” and so called “Mispriced inflection (Value with a trigger)” investment opportunities.

German Small & Mid Cap Equities

The efficient, comprehensive and detailed analysis of the available information is the recipe for success for this strategy. Small and mid-cap companies are selected that meet one of the following criteria: structural growth prospects, positive surprise in profit, attractive valuation.