The Canadian Income & Growth Equity strategy is a diversified, actively managed portfolio that aims to provide long-term capital growth and income by investing in a well-diversified portfolio of dividend income-producing Canadian securities that have relatively high yield. Companies chosen will primarily be mature but growing businesses. To achieve the strategy’s investment objectives, the investment team generally focuses on securities that offer an attractive current yield combined with superior management, industry leadership, a high level of profitability compared to their competitors, a sound financial position, strong earnings and dividend growth, and a reasonable valuation. The small capitalization, resource, technology and communication sectors will typically be under-represented within the strategy, as compared to broader equity market indices.
- Large cap Canadian equity portfolio, primarily mature but growing businesses.
- Invests in income-producing securities with a relatively high yield.
- Fundamental research presents risk/reward outlook for stocks, guiding conviction and positioning.
- ESG is fully integrated into the investment philosophy and process.
- Team of sector specialists led by experienced portfolio manager.
Investment philosophy and style
- The investment philosophy underlying the team’s approach to Canadian equities is centered on the belief that higher quality companies outperform over the long-term, that growth is key to long-term value creation, and that the price paid for a stock matters to long-term returns. The team believes that long-term value creation is more important than near-term valuations.
- The team’s investment process is primarily bottom-up.
- The investment team’s research process is facilitated by a number of proprietary tools, including their templates, sector playbooks, and dashboard guides.
- In addition to identifying investment opportunities, a related function of the team’s research process is to develop conviction in those opportunities.
- The team has developed checklists to assist them in establishing conviction around the quality of businesses as well as the drivers of the returns that they expect.
- The resulting conviction establishes a risk/reward outlook and helps guide their positioning in individual holdings.
- The objective of the team’s portfolio management process is to translate the research findings into a portfolio. It can be thought of as comprising two components: portfolio construction and risk management.
- The team builds the portfolio to optimally blend 1) taking enough risk to meet the objectives for value added, 2) ensuring that their highest conviction investment ideas are expected to have the biggest impact on performance, and 3) measuring and monitoring unwanted risks for deliberate calibration.
- As a result, two-thirds of the portfolio comprises the team’s highest conviction (quality) companies, while the remaining one-third of the portfolio helps control for any unintended style or sector risks.
- As with the team’s research process, portfolio management decisions are assisted by proprietary fundamental and quantitative tools.