Investing in European innovation champions | FONDSNET “FIT” magazine

March 28th, 2022 General, News

CHARACTERISTICS OF INNOVATIVE COMPANIES

There are many innovative ideas. AMG Fondsverwaltung AG (fund manager of the “ALPORA Innovation Europa Fonds”) and ALPORA AG (cooperation partner focusing on innovation measurement) know that “innovation” per se is not a guarantee of sustainable profitable growth, and this fact is crucial in stock selection. When investing, it is important to identify the innovation champions that also create added value for investors. Innovative companies are able to compete more effectively. Technological change is increasingly affecting all sectors of the economy. Innovative companies can consolidate or expand their market positions in this change through new products and services or improved processes. Innovative companies also frequently realize new business models and markets and can thus tap new or additional sources of revenue.

Innovation-efficient companies recover more quickly

Innovation-efficient companies do better in economic crises. According to scientific studies, innovative companies also generate better stock performance. Especially after stock market slumps, shares of innovation-efficient companies recover more quickly than the overall market. This is also one of the main characteristics of the ALPORA Innovation Europa Fund: Since the fund was launched in October 2014, one of the fund’s distinguishing features has been that its recovery time after market declines is significantly shorter on average than that of the overall market. And that’s with comparable volatility.