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DWS applies proprietary CROCI valuation strategy to thematic investing with new intellectual capital fund


DWS is breaking new ground in the thematic space with the launch of an investment fund targeting companies with high levels of intellectual capital, which is generally not recognised on balance sheets but is a significant driver of revenue growth.

The DWS Invest CROCI Intellectual Capital fund is based on research by DWS’s in-house CROCI (Cash Return on Capital Invested) team, which finds that, over the past decade, economic growth and equity returns have increasingly been driven by companies with comparatively low capital and labour but a high concentration of intangible assets, or intellectual capital. Investors can position themselves to benefit from this trend by taking exposure to firms identified as possessing the intellectual capital required to create revenue growth in the new economy.
 
“DWS’s CROCI valuation investment approach has measured intangible assets since 1996 and is the perfect analysis tool for finding future revenue generators linked to intellectual capital. Our new fund takes an established investment approach and uses it to capture the structural shift in the economy out of physical capital into intangible capital. The result is a unique vehicle for positioning for future growth,” says Francesco Curto, co-Head of Research and Head of the CROCI Investment Strategy and Valuation Group.

The new fund uses a systematic methodology to provide exposure to companies with real earnings growth potential based on intellectual capital. It has a standard seeding share class annual all-in fee of 40bps.

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