AGF Emerging Markets Equity Strategy

Approach
Fundamental, bottom-up investment approach.
Cap
All cap
Benchmark
MSCI Emerging Markets Index
Inception Date
June 2003
Documents

Key Reasons to Invest

    • For Investors seeking exposure to a broad universe of high quality companies in emerging market countries
    • Emerging Market fundamentals are improving at both the company and country level
    • The asset class currently has attractive valuations and a large discount to the developed markets

Strategy

The strategy’s objective is growth at a reasonable price derived by investing in equities of companies operating in emerging market countries with a fundamental, bottom-up investment style and top-down country allocation framework.

Philosophy

The AGF Emerging Markets Equity Strategy focuses on economic value added (EVA). We believe this will drive long-term returns while controlling risk, and that companies generating returns in excess of their cost of capital create shareholder value. Our long-term investment horizon approach strives to take advantage of what we believe are short-sighted markets. We believe that markets are short-sighted and the differences between winners and losers become differentiated over time. We analyze existing holdings with a view towards the long term.

The result of our investment process reveals emerging market stocks with strong profitability, resulting in sustainable earnings growth prospects not recognized by the market and selling at attractive valuations which drive our disciplined and diversified portfolio construction process.

Process

Our investment process is based on the concept of EVA, which focuses on finding companies that over time will exhibit characteristics such as strong/growing cash flow generation, sales, margins, and/or asset utilization.

Our process is underpinned by fundamental stock selection and aided by our disciplined country allocation framework, with an awareness of the macroeconomic conditions through country analysis. Our emerging markets universe includes the MSCI Emerging Markets Index and Hong Kong, and contains 24 countries.

The country universe is scored and ranked for valuations, growth/sentiment, and risk. A minimum market cap of US$500 million is applied in the security screening process. The remaining universe is then ranked based on historical and prospective valuation, growth, and sentiment characteristics.

We apply an EVA screen to the resulting universe to uncover companies that have the ability to generate a return on investment that exceeds the company’s cost of capital. From there, selected names are reviewed using in-depth fundamental analysis to uncover companies with strong businesses and management, unrecognized growth potential, and attractive valuations. The portfolio manager imposes disciplined controls at the country, sector, company, and portfolio level.

Emerging Markets Process

Fund Managers

Regina Chi, CFA

Vice-President, Portfolio Manager
AGF Investments Inc.

Alpha Ba, M.Sc., CFA

Vice-President and Portfolio Manager
AGF Investments Inc.

Title and Position

Regina Chi is Vice-President and Portfolio Manager with lead responsibility for AGF Emerging Markets strategies. She has an investment philosophy consistent with AGF’s Global Equity Team and looks for quality companies that have long-term sustainable competitive advantages at attractive valuations.

Regina is a CFA charterholder. She received her Bachelor of Arts in Economics and Philosophy from Columbia University. Regina has a working knowledge of Korean and Spanish.

Approach or Quote

Regina brings 23 years of international equity experience to this role. She was most recently a partner at DePrince, Race & Zollo Inc. where she was portfolio manager for the Emerging Markets and International Value disciplines. She was also head of portfolio management and research as they related to Emerging Markets, Global, International and International Small Cap strategies. Prior to this role, she held senior investment management roles at Oppenheimer Capital, Federated Investors and Clay Finlay Inc.

Registered as a Portfolio Manager under AGF Investments Inc. and AGF Investment America Inc. CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.

Years with AGF

< 1

Years in the industry

23

Title and Position

Alpha Ba is Vice-President and Co-Portfolio Manager of AGF’s emerging market strategies. His knowledge of global markets is complemented by his hands-on experience of these markets. Alpha is also a member of the AGF Asset Allocation Committee (AAC), which is comprised of senior portfolio managers who are responsible for various regions and asset classes. The AAC meets regularly to discuss, analyze and assess the macro-economic environment and capital markets in order to determine optimal asset allocation recommendations.

Alpha earned an M.Sc. in Finance and Investment from Brunel University in London, England, and a B.A. in Finance from the Institut Supérieur du Commerce de Paris, France. He is a CFA charterholder and is fluent in French and Fulani, with a working knowledge of Spanish and Arabic.

Approach or Quote

Prior to joining AGF, Alpha was an analyst with the Caisse de dépôt et placement du Québec where he researched and reported on the global technology sector. Previous to that, he held positions in various investment management firms in Montreal and Geneva.

Registered as a Portfolio Manager under AGF Investments Inc. and AGF Investment America Inc. CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.

Years with AGF

11

Years in the industry

18

Analyst Name

MBA, JD, CHA
Portfolio Management

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