We believe companies focused on innovative products and services that simultaneously improve quality of life and environmental circumstances are being increasingly rewarded by investors. We also believe that sustainable technologies represent a faster-growing opportunity set in the market. Our specialist team has defined high-growth environmental themes which have been further honed through collaboration with the AGF global analyst pool. The result is a high-active share portfolio that we believe enhances our ability to exploit inefficiencies in this segment of the market.
The Strategy's investment process
Martin Grosskopf explains his investment philosophy and the global themes he is currently focused on.
The trends behind sustainable investing
Martin Grosskopf discusses the trend behind fossil fuel divestment as investors diversify away from carbon risk and become more engaged with companies that are providing solutions to dramatically reduce emissions.
The investment process is based on a fundamental bottom-up approach. Four environmental mega themes are used to establish the investment universe. Within this universe, the team seeks out opportunities that either provide exposure to high-growth environmental themes or ‘catalysts’, or that have been identified within the undervalued segments of a particular industry’s value chain. Typically, the catalyst is technology or product-related and is a definable environmental advantage, or the catalyst is expected to have an impact within 18 months. Idea generation efforts are focused on two areas: fundamental strength and free cash flow.
Fundamental strength is examined from the perspective of proprietary long-term competitive advantages, which can take one of several forms:
Once a list of candidates is identified, the team conducts a comprehensive assessment of the security’s future performance potential. This process includes discussions with company management, to develop a deeper understanding of its business strategy and the stability of its business model. Using internal and third party research, the portfolio manager assesses security valuation by determining the underlying financial quality, profitability, balance sheet strength, earnings quality and cash flow.
Our portfolio construction process is driven by our bottom-up security selection process. Our portfolios represent the portfolio manager’s best ideas and reflect conviction on a security and sector level.
AGF Global Sustainable Growth Equity Strategy offers investors access to four macro themes, within which market-relevant subthemes are identified.
|ENERGY & POWER TECHNOLOGIES||WASTE MANAGEMENT & POLLUTION CONTROL||WATER & WASTEWATER SOLUTIONS||ENVIRONMENTAL HEALTH & SAFETY|
*Does not provide investment advice or recommendations.