Long-Term Investing in Switzerland: How arvy Does It – and Why It Works

"To be better than the crowd, you must act differently from the crowd." — Sir John Templeton

arvy's Teaser: Most investors know what they should do: stay invested, think long-term, ignore the noise. But most don't. Not because they lack intelligence — but because markets test your emotions before they test your strategy. arvy was built for exactly this gap: between knowing and doing.

Skin in the Game: We Invest Ourselves — With Everything

Before we explain how arvy invests, the most important thing first: the arvy founders invest in their own strategy — not symbolically, but with all their relevant personal capital.

The Foundation: Quality Investing and Momentum

arvy doesn't invest based on gut feeling or whatever is trending in financial media. We follow a scientifically grounded strategy: quality and momentum.

Quality companies — firms with strong balance sheets, high returns on capital, sustainable competitive advantages, low leverage, and management with integrity — structurally generate better returns than the broad market over the long term.

The key difference: we measure quality through Cash Return on Operating Capital — not Earnings per Share. EPS says nothing about capital employed. Anyone chasing EPS growth can "buy" as much as they want — at corresponding capital cost. That's not real value. Real value is created when a company generates sustainably high cash returns on its invested capital.

The Investment Process: Quantitative + Qualitative

Pillar 1 — Quantitative screening: We systematically screen the global investment universe: cash return on capital, leverage ratio, free cash flow generation, earnings stability across multiple cycles. Companies that score poorly are eliminated — regardless of how compelling the narrative sounds. Most can be excluded based on their industry alone: too cyclical, too capital-intensive, too dependent on leverage.

Pillar 2 — Qualitative deep analysis: Is the competitive advantage durable? Does management act in owners' interests — or optimise short-term metrics at the expense of the long-term franchise?

The result: A concentrated portfolio of 25–35 high-conviction positions with high active share — deliberate deviation from benchmarks. Anyone holding 150 positions is effectively running an expensive index fund. We know exactly why each position is in the portfolio.

Why an ETF Alone Isn't Enough

S&P 500 ETFs have performed well over the last 15 years — driven by a handful of mega-cap technology stocks. But anyone buying the index today carries roughly 50% exposure to AI-related stocks. That's not diversification — it's a concentrated valuation bet at historically elevated levels.

On top of that: the typical index fund investor in practice earns significantly less than the index — because they buy and sell at the wrong time. Which brings us to the most underestimated risk of all.

Capital Preservation First: The Mathematics of Losses

Warren Buffett: "The biggest risk is the permanent loss of capital." Behind this simple statement lies mathematics that most investors systematically underestimate:

Someone who's lost 40% rarely makes rational decisions. Panic selling at the bottom, inactivity during the recovery — these are the real return killers. Since launch in February 2019, arvy has outperformed in virtually every major downturn — COVID crash 2020, rate shock 2022, tech correction 2023. Those who lose less in downturns start from a higher base — and benefit disproportionately from the next recovery.

The Behaviour Gap: What 1.4% per Year Really Costs

There's a return thief that barely gets discussed: the behaviour gap — the difference between the return a fund achieves and the return the average investor in that fund actually receives. Studies consistently show: this gap is around 1.4% per year.

1.4% sounds small. But compounding is ruthless — in both directions:

The investor who performs "just" 1.4% worse — because they trade at the wrong time — has CHF 90,000 less after 20 years. That's the invisible price of emotion and lack of commitment.

This is where a central value of arvy lies: not just delivering the strategy, but accompanying the investor on the journey. The tortoise doesn't win because it's faster. It wins because it never stops running.

How arvy Measures Success: Jensen's Alpha and the 7-Year Horizon

Return alone says little. Achieving 20% while accepting 40% volatility isn't a good deal. arvy measures success primarily through Jensen's Alpha — how much excess return is generated per unit of risk. Currently this alpha is at 1–3%.

The second benchmark: the 7-year horizon. Outperformance across a full market cycle — bear market, recovery, bull market, correction — is the hardest proof of a sustainable strategy. Many managers shine in bull markets. The real question is: who survives the downturn too?

What Sets arvy Apart

The Bottom Line: Think Differently to Do Better — and Sleep Better

To be better than the crowd, you must act differently from the crowd. arvy embraces the deviation from the mainstream: concentrated portfolio, high active share, low portfolio turnover, full focus on capital preservation during downturns.

Those who hold structurally excellent companies, stay disciplined for at least seven years, avoid large drawdowns, and protect the compounding effect will earn attractive long-term returns — with a risk profile that lets them sleep at night. And with managers who risk the same capital as you.

"Investing is a marathon. And we run it — together."