The Canadian Equity GARP ("growth at a reasonable price") strategy is a diversified, actively managed strategy that aims to provide long-term capital growth by investing in common shares of Canadian corporations. To achieve the strategy’s objectives, the PH&N Canadian Equity team emphasizes investments in quality, growing companies whose shares are trading at reasonable valuations. The strategy is managed by a research-intensive, bottom-up investment process, complemented by the use of proprietary tools.
Strategy overview
- Emphasis on identifying companies creating long-term value through quality growth opportunities.
- Proprietary fundamental research is the key to security selection.
- Core large cap Canadian equity portfolio, complemented by small cap stocks and dedicated gold stock management.
- The team integrates material ESG factors into its investment decisions.
Our approach
Investment philosophy and style
- Growth at a reasonable price
- The PH&N Canadian Equity team’s investment philosophy is centered on their belief that the best long-term returns come from the stocks of companies that create value for shareholders through long-term growth when bought at reasonable prices.
- Research-intensive, bottom-up investment process.
- Integrates material ESG factors into its investment decisions.
- Experienced team of sector specialists led by two portfolio managers
Investment process
- Bottom-up, fundamental research is focused on the belief that high-quality businesses outperform through proven management, sustainable competitive advantages, and attractive capital allocation.
- The PH&N Canadian Equity team thinks in scenarios, not a specific right answer. Outcomes are inherently uncertain and the processes anticipate uncertainty and incorporate buy triggers to take advantage of volatility.
- Integrates material ESG factors into its investment decisions.
Portfolio construction
- Through their various proprietary tools, the PH&N Canadian Equity team ranks every company in the S&P/TSX Capped Composite Index on Quality, Return, and Conviction drivers.
- From there, approximately two-thirds of the portfolio is made up of the highest quality/conviction ideas, while the rest of the portfolio comes together from a risk management perspective to ensure that the strategy is not taking any unintended sector or style bets.
- As a result, the highest conviction investment ideas are expected to have the largest impact on performance, and risks are accurately measured and carefully managed.
- ESG considerations are a component of the team’s overall fundamental analysis. The team engages with companies’ management and boards to better understand potential material ESG risks and opportunities, as well as the underlying processes the companies have in place to manage these risks and opportunities.