Quality Innovation | Method

Unique analysis and investment process

Quality Innovation is Serafin Innovation Hub's special investment approach to stock selection. This approach combines classic quality analysis, which focuses on the current state of the company, with modern innovation analysis, which forecasts the future qualitative strength of the company. Our unique company selection is based on scientific knowledge in innovation management - for objectively measurable success through the positive correlation between innovation efficiency and stock performance.

For an innovation to qualify as a Quality Innovation, the focus must be on the long-term profitability of the innovation. Quality innovations have characteristics that lead to higher customer satisfaction and loyalty, greater market share, and long-term profitability compared to the competition. Companies that focus on a qualitative innovation strategy try to keep profitability high through innovation and to cover research and development expenses from existing cash flow.

Eylem Cetin-Hansmeyer

Director Sales

How innovation and stock performance are related

The Serafin Innovation Hub identifies innovators and emerging technologies that offer high growth potential for investors at an early stage. This enables it to invest in companies that are developing or using these technologies before they are widely accepted. Companies that regularly innovate successfully benefit from revenue growth, higher profits, and faster market penetration. It seems obvious that the share prices of companies with such innovation successes and technological advantages tend to rise.

Selection

With our "Quality Innovation" investment style, we look for companies that are leaders in their industry and stand out for their track records of continuous innovation and introduction of new products or services into the market. The Serafin Innovation Hub, therefore, looks for companies that have a strong competitive advantage, a proven ability to innovate, and a focus on developing high-quality products or services. Companies should have a long-term vision and a commitment to invest in research and development to stay ahead of the competition.

The innovation analyses of the Serafin Innovation Hub include two core phases:

  • Quantitative innovation efficiency measurement
  • Qualitative innovation detail measurement

Serafin Innovation Funds each include the most innovation-efficient companies in the universe. Based on the exclusively built databases, Serafin combines selected innovation analytics methods to analyze the innovation efficiency of companies. The evaluation and analysis results produce a ranking of companies according to their innovation efficiency within the peer group relevant to a fund.

Get to know our methods in detail:

Quantitative innovation efficiency measurement

The innovation capability of companies is measured by comparing the input and output indicators of the innovation process using an innovation efficiency measurement. The graphic on the right shows this measurement procedure and the comparison of innovation inputs (e.g. R&D investments) to innovation outputs (e.g. sales of new products), which subsequently have a financial impact on the company. A significant advantage is that in this way small and large companies can be considered and compared simultaneously with each other in one measurement at the same time.

Qualitative innovation detail analysis

The innovation efficiency measurement results in a ranking list of the most innovation-efficient companies. The top 60 companies in this ranking are then subjected to a detailed qualitative review by the Serafin Innovation Hub team. The purpose here is to develop an understanding of the company's current innovation activities that are not already accounted for by the input/output measurement.

The Serafin Innovation Hub additionally reviews the extent to which potential portfolio candidates cover current megatrends and innovation trends and focus on general-purpose technologies and enabling technologies.

Which domains are analyzed by Serafin?

In summary, the following domains are of particular interest in the innovation analyses. These are quantified where possible and otherwise examined qualitatively.

  • Research and development
  • Knowledge creation
  • Innovation culture
  • Cooperations
  • Commercialization
  • Patent success
  • Process improvement

The Serafin Innovation Hub introduces itself

The Innovation Hub is responsible for the development of innovation-focused models and the execution of innovation analyses within the Serafin Asset Management Group.

In this context, the innovation efficiency and innovative strength of companies are measured quantitatively using advanced models. In addition, a detailed qualitative analysis of innovators is also carried out about their future viability and coverage of relevant market and technology trends.

The resulting innovation assessment of listed companies serves as a basis for Serafin's innovation investment products. Furthermore, the results are also made available internally for the other products and a close cooperation with the investment team of Serafin Asset Management Group is ensured. The Innovation Hub enables the inclusion of factor innovation in all investment strategies of Serafin. Depending on the focus of the respective investment strategy, innovation can be weighted more or less strongly.

Learn more about our two Innovation Funds

ALPORA Innovation Europe

ALPORA Innovation World Large Caps

Publications

INNOVATION HUB INSIGHTS | AI

INNOVATION HUB INSIGHTS | AI

Download now (PDF)
White Paper | Quality Innovation

White Paper | Quality Innovation

Download now (PDF)
White Paper | Inflation

White Paper | Inflation

Download now (PDF)

You would like to invest? Contact our experts

Dr. Julian Kauffeldt

Head of Innovation Investment Products
Serafin Innovation Hub

Dr. Niklas Bayrle

Investment Manager
Serafin Innovation Hub

Patrick Hofer

Investment Manager
Serafin Innovation Hub / Quality Swiss Equities

The content of this website is directed at persons who are resident in Germany or Switzerland or who access this website from Germany or Switzerland.

This website and the information provided on this website shall not constitute an offer to sell or a solicitation to purchase or subscribe any shares or units in the funds mentioned on this website. The key investor information, the prospectus, the annual and semi-annual reports of the funds are published on this website to comply with statutory requirements.

Subscriptions will only be received and shares or units in the funds issued on the basis of the most recent key investor information and the contractual conditions set out in the prospectus in conjunction with the most recent annual and/or semi-annual report of the fund.

A financial investment is associated with risks. The value of a fund unit/share or investment, as well as the income derived from it, may be subject to fluctuations and are not guaranteed. The investor may not get back the full amount invested. Past performance is not indicative of future performance that may be expected.

The following information is general in nature and is not and may not be construed as constituting investment advice or any form of recommendation by Serafin Asset Management. Prior to any potential investment users should carefully consider the suitability of the investment for their individual circumstances and personal perspectives and should consult their tax, legal, financial, investment or other advisor.

For website visitors located in Germany: Please note the additional legal notices and the privacy policy.

For website visitors located in Switzerland: Please note legal information and the privacy policy as well as the information obligations (FINSA).

Any person who is a U.S. person (as such term is defined in Regulation S under the U.S. Securities Act of 1933) is not eligible to invest in the investment funds indicated on this website. I hereby certify that I am neither a citizen nor a resident of the United States of America and that I do not have a place of business in the United States of America and, in particular, that I am not a U.S. person (as such term is defined in Regulation S under the Securities Act of 1933).

The content of this website is directed at persons who are resident in Germany or Switzerland or who access this website from Germany or Switzerland.

This website and the information provided on this website shall not constitute an offer to sell or a solicitation to purchase or subscribe any shares or units in the funds mentioned on this website. The key investor information, the prospectus, the annual and semi-annual reports of the funds are published on this website to comply with statutory requirements.

Subscriptions will only be received and shares or units in the funds issued on the basis of the most recent key investor information and the contractual conditions set out in the prospectus in conjunction with the most recent annual and/or semi-annual report of the fund.

A financial investment is associated with risks. The value of a fund unit/share or investment, as well as the income derived from it, may be subject to fluctuations and are not guaranteed. The investor may not get back the full amount invested. Past performance is not indicative of future performance that may be expected.

The following information is general in nature and is not and may not be construed as constituting investment advice or any form of recommendation by Serafin Asset Management. Prior to any potential investment users should carefully consider the suitability of the investment for their individual circumstances and personal perspectives and should consult their tax, legal, financial, investment or other advisor.

For website visitors located in Germany: Please note the additional legal notices and the privacy policy.

For website visitors located in Switzerland: Please note legal information and the privacy policy as well as the information obligations (FINSA).

Any person who is a U.S. person (as such term is defined in Regulation S under the U.S. Securities Act of 1933) is not eligible to invest in the investment funds indicated on this website. I hereby certify that I am neither a citizen nor a resident of the United States of America and that I do not have a place of business in the United States of America and, in particular, that I am not a U.S. person (as such term is defined in Regulation S under the Securities Act of 1933).

The content of this website is directed at persons who are resident in Germany or Switzerland or who access this website from Germany or Switzerland.

This website and the information provided on this website shall not constitute an offer to sell or a solicitation to purchase or subscribe any shares or units in the funds mentioned on this website. The key investor information, the prospectus, the annual and semi-annual reports of the funds are published on this website to comply with statutory requirements.

Subscriptions will only be received and shares or units in the funds issued on the basis of the most recent key investor information and the contractual conditions set out in the prospectus in conjunction with the most recent annual and/or semi-annual report of the fund.

A financial investment is associated with risks. The value of a fund unit/share or investment, as well as the income derived from it, may be subject to fluctuations and are not guaranteed. The investor may not get back the full amount invested. Past performance is not indicative of future performance that may be expected.

The following information is general in nature and is not and may not be construed as constituting investment advice or any form of recommendation by Serafin Asset Management. Prior to any potential investment users should carefully consider the suitability of the investment for their individual circumstances and personal perspectives and should consult their tax, legal, financial, investment or other advisor.

For website visitors located in Germany: Please note the additional legal notices and the privacy policy.

For website visitors located in Switzerland: Please note legal information and the privacy policy as well as the information obligations (FINSA).

Any person who is a U.S. person (as such term is defined in Regulation S under the U.S. Securities Act of 1933) is not eligible to invest in the investment funds indicated on this website. I hereby certify that I am neither a citizen nor a resident of the United States of America and that I do not have a place of business in the United States of America and, in particular, that I am not a U.S. person (as such term is defined in Regulation S under the Securities Act of 1933).