Investment Philosophy
Dividend House equity funds implement a dividend-oriented investment philosophy - we invest in quality dividend payers over the long term.
Investment Philosophy
Quality, predictability and dividend growth are at the heart of our investment philosophy. We are looking for companies with sustainable competitive advantages in stable and growing industries. We avoid industries and companies that are fluctuated by external factors and are not profitable.
High return on equity and a strong balance sheet are the most important financial metrics in investment valuation. Return on equity reflects sustainable competitive advantages and enables growth to be financed at the same time as generous dividend distribution. A strong balance sheet strengthens the ability to pay dividends, brings stability to the business and are key factors of a well-managed company.
Moderate valuation of investments and good dividend yield is the last criterion of our investment philosophy. We assemble our portfolio of high quality dividend payers so that individual industries are not over-weighted and companies’ shares are attractively priced.
Principles of Responsible Investment
Dividend House is a responsible investor. Customer interest and fair treatment of clients, as well as uncompromising, goal-oriented and consistent portfolio management are the cornerstones of our investment activities. In addition to the economic aspects, we also take into account environmental, social and good governance issues in our investment activities (ESG-issues).
Integration of responsibility into investment activities
The environmental, social and governance implications of business influence corporate income, costs and reputation. They are therefore also relevant to the investor’s return and risks. Dividend House has written principles for ethical investing and portfolio managers consider responsibility in their daily investment activities.
Our investment process is based on a deep understanding of the business and operating environment of the target company. In our investment activities, we emphasize, among other things, healthy and growing industries and sustainable competitive advantages. One of the key investment criteria is the stability and predictability of the target company’s business. This directs you to invest in companies that operate to the standards set by society and are guided by consistent goals and principles – including ethics, sustainable development and corporate social responsibility.
Monitoring and Exclusion of Violations of Standards
We expect the investee companies to comply with national and international laws, good governance, and general ethical principles and standards regarding human rights, labor rights, the environment and corruption. For example we do not invest in companies that manufacture weapons prohibited by international treaties nor do we invest in companies whose turnover exceeds 50% of tobacco products.
Active ownership and influence
We regularly discuss with the management of the portfolio companies and raise issues and responsibilities related to responsibility as appropriate. When we attend General Meetings, we vote in accordance with the principles of responsible investment.
Reporting and actions
At Dividend House, any person making an investment decision must adhere to the Company’s Principles for Responsible Investment. Corporate social responsibility issues are part of the company’s portfolio management and risk management process and the implementation of corporate responsibility principles is regularly monitored. Any deviations and observations are reported to the CEO who decides on the necessary actions.