Three Years of FERI Systematic Global Equity: Outperformed the MSCI World Index Through Systematic Stock Selection

The FERI Systematic Global Equity (ISIN: LU2669794443) is celebrating its third anniversary today. With this global equity strategy, FERI AG now manages more than 700 million euros and, since its launch in October 2023—adjusted for ongoing fund expenses—has outperformed the MSCI World Index while simultaneously recording a lower maximum drawdown. The systematic strategy of the Bad Homburg-based asset manager is based on the insight that return factors operate cyclically: “Value stocks, for example, performed strongly up until the financial crisis, then underperformed the market for many years, and have only been generating excess returns again since 2019,” explains Thomas Gerner, Head of Systematic Equities, Commodities & Precious Metals and Lead Manager, citing this as an example.

The FERI Systematic Global Equity Fund therefore focuses on targeted diversification. A pool of over 60 criteria—including those related to valuation, profitability, quality, growth, and momentum—is grouped into approximately 20 factor groups. Closely related metrics, such as various margins, are combined rather than relying on just one of them. The dynamic weighting of the factors is based on their statistically proven predictive power. The investment process is entirely rule-based and requires virtually no discretionary decisions.

Systematic Stock Selection Instead of Market Forecasts

“Anything can happen on the stock market every day. The future can only be predicted to a limited extent—even with artificial intelligence,” Gerner emphasizes. “Instead of relying on market forecasts, we therefore focus on a consistent, data-driven stock selection process.” From a global universe of approximately 1,250 stocks, the fund selects about 150 companies. The goal is not to find the best sprinter or the best high jumper, but rather the best decathlete. “A stock that performs well across many disciplines ranks higher in our portfolio than one that excels in only a single factor. For example, a stock that is highly valued must be correspondingly profitable.”
“The FERI Systematic Global Equity is aimed at investors who are looking for an attractive alternative to a passive MSCI World investment or an active stock-picking approach for their core equity allocation,” explains Carsten Hermann, Executive Managing Director, Investment Management at FERI.

The fund invests physically in the selected stocks; FERI does not engage in securities lending or use swaps for synthetic replication. The composition of the Systematic Global Equity Fund is reviewed and adjusted monthly. Thanks to its global focus and benchmark-oriented positioning, the fund can serve as a core component of a global equity allocation. This makes the strategy particularly suitable for investors who wish to supplement their existing equity allocation with systematic opportunities for excess returns without sacrificing broad exposure to global equity markets. As an Article 8 fund, the FERI Systematic Global Equity Fund also takes environmental and social factors into account in its investment process.