May 19, 2021 | By: AGF

Spotlight on Sustainable Returns

5 min read

No trade-off between value versus values

The market swings over the past few years have demonstrated the importance of a sustainable investing approach. With the crash and rebound brought on by the pandemic, followed by a sustained bull run, sustainable strategies have showed their value in all market conditions, adding value to investors’ portfolios and demonstrating protection from risk.

Research is showing that indexes made up of companies focused on ESG issues, climate change and the transition to a low-carbon economy outperformed and can act as a defensive characteristic in times of crisis1, in addition to their ability to generate outperformance in growing markets1.

A focus on good stewardship and sustainable investing practices may help investors mitigate the risks associated with market downturns, as well as find opportunities in more bullish environments. Effective research, analysis and evaluation of ESG issues may enhance the value and performance of an investment over the medium and longer-term.

Investors are increasingly seeking ways to meet their financial goals while contributing to positive environmental, social and governance outcomes. No longer considered a “niche” investment, sustainability has gone mainstream and hasn’t resulted in a trade-off between value and values. In 2020, 42 per cent of sustainable funds were ranked in the top quartile of performance, and 33 per cent were ranked in the second quartile of performance2.

Sustainable Equity Funds: 2020 Return Rank by Morningstar Category Quartile

Sustainable Equity Funds: 2020 Return Rank by Morningstar Category Quartile

Source: Morningstar Inc. as of December 31, 2020.

Why AGF’s Sustainable Investment Platform

In addition to the integration of ESG considerations across our investment platforms, AGF’s Sustainable Investing Platform offers a spectrum of solutions specifically aimed at achieving sustainable outcomes for investors through exclusionary screens, explicit ESG factor incorporation, thematic and impact approaches.

QBTL - AGG Global SUstainable Strategy Spotlight

AGF Global Sustainable Growth Equity Strategy

An active, fundamental approach seeking sustainable returns

Sustainability isn’t just about exclusion or managing the risk of climate change in portfolios. The AGF Global Sustainable Growthy Equity Strategy invests in four sustainable themes, identifying innovative companies within each theme: Health and Well Being, Water and Wastewater Solutions, Waste Management and Pollution Control and Energy & Power Technologies.

Under these four broad themes, we look to identify sub-themes where there are clear drivers and catalysts for growth, analyzing the market conditions and building a picture of the investment opportunities. We then conduct ESG and fundamental analysis to build a high-conviction sustainable portfolio.

The strategy offers one of the longest track records in sustainable investing (launched in 1991) and invests in global equity securities with a primary focus on providing investors long-term capital appreciation within the four themes. It has demonstrated persistent outperformance over its long-term history3 and can be a source of alpha when used in a portfolio.

Learn more about the AGF Global Sustainable Growth Equity Fund

Explore a quantitative approach to sustainable returns

1Source: Morningstar Inc. February 2021: https://www.morningstar.com/insights/2021/02/08/morningstars-esg-indexes-have-outperformed-and-protected-on-the-downside

2Source: Morningstar Inc. January 2021: https://www.morningstar.com/articles/1017056/sustainable-equity-funds-outperform-traditional-peers-in-2020

3Source: AGF Investment Operations as at March 31, 2021

You cannot invest directly in an index.

The commentaries contained herein are provided as a general source of information based on information available as of May 19, 2021 and should not be considered as investment advice or an offer or solicitation to buy and/or sell securities. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. The content intends to provide you with general information and is not intended to be comprehensive investment advice applicable to the circumstances of the individual. Market conditions may change and the manager accepts no responsibility for individual investment decisions arising from the use or reliance on the information contained herein. Investors are expected to obtain professional investment advice.

Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated.

AGF ETFs are ETFs offered by AGF Investments Inc. ETFs are listed and traded on organized Canadian exchanges and may only be bought and sold through licensed dealers.

Commissions, management fees and expenses all may be associated with investing in AGF ETFs. Exchange-traded funds are not guaranteed, their values change frequently and past performance may not be repeated. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. There is no guarantee that AGF ETFs will achieve their stated objectives and there is risk involved in investing in the ETFs. Before investing you should read the prospectus or relevant ETF Facts and carefully consider, among other things, each ETF’s investment objectives, risks, charges and expenses. A copy of the prospectus and ETF Facts is available on AGF.com.

Past performance is not necessarily a guide to future performance. The value of investments and the income from them can fall as well as rise. Investments denominated in foreign currencies are subject to fluctuations in exchange rates, which may have an adverse effect on the value of the investments, sale proceeds, and on dividend or interest income. Investors may not necessarily recoup the full value of their original investment. Investors should be aware that forward looking statements and forecasts may not be realised.

©2021 Morningstar. All Rights Reserved. The information, data, analyses and opinions contained herein (1) include the confidential and proprietary information of Morningstar, (2) may include, or be derived from, account information provided by your financial advisor which cannot be verified by Morningstar, (3) may not be copied or redistributed, (4) do not constitute investment advice offered by Morningstar, (5) are provided solely for informational purposes and therefore are not an offer to buy or sell a security, and (6) are not warranted to be correct, complete or accurate. Except as otherwise required by law, Morningstar shall not be responsible for any trading decisions, damages or other losses resulting from, or related to, this information, data, analyses or opinions or their use. This report is supplemental sales literature. If applicable it must be preceded or accompanied by a prospectus, or equivalent, and disclosure statement.

AGF Management Limited (“AGF”), a Canadian reporting issuer, is an independent firm composed of wholly owned globally diverse asset management firms. AGF’s investment management subsidiaries include AGF Investments Inc. (“AGFI”), AGF Investments America Inc. (“AGFA”), Highstreet Asset Management Inc. (“Highstreet”), AGF Investments LLC (formerly FFCM LLC) (“AGFUS”), AGF International Advisors Company Limited (“AGFIA”), Doherty & Associates Ltd. (“Doherty”) and Cypress Capital Management Ltd. (“CCM”). AGFI, Highstreet, Doherty and Cypress are registered as portfolio managers across various Canadian securities commissions, in addition to other Canadian registrations. AGFA and AGFUS are U.S. registered investment advisers. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission.

Publication date: May 19, 2021

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