AGF Global Dividend Equity Strategy
Approach
A fundamental, combined investment approach.
Cap
Large cap
Benchmark
MSCI All Country World Index
Inception Date
August 2007
Resources
Key Reasons to Invest
1
The Strategy invests in high-quality, dividend-paying companies and maintains strong risk controls at the country, sector and company level which has contributed to lower volatility and better downside protection relative to the peer universe.
2
For investors seeking the benefits of global market diversification and capital appreciation.
3
The strategy focuses on risk-adjusted returns and downside protection.
Overview
Strategy
The AGF Global Dividend Strategy seeks to capture returns from asset pricing inefficiencies at the company and at the country level. The Strategy focuses on Economic Value Added (EVA) with a fundamental, combined fundamental and quantitative core investment approach to drive long-term returns while controlling risk.
Philosophy
We believe a combined focus on corporate economic profit (EVA) growth and country allocation drives long-term returns while controlling risk. We further believe that a focus on dividend yield and dividend growth can add incremental performance. We seek companies that can generate returns in excess of their cost of capital, thereby creating shareholder value. We emphasize countries with attractive value, growth/sentiment and risk profiles.
Process
Our process is based on the concept of EVA (economic value added), 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. The global universe contains 49 countries. Political and liquidity screens eliminate a number of countries. The resulting country universe, representing approximately 90% of MSCI All Country World Index by market capitalization, is then scored and ranked for valuations, growth/sentiment, risk and dividend yield. A minimum market cap screen of US$1.5 billion is applied in the security screening process. The remaining universe is then ranked based on historical and prospective valuation, growth and sentiment characteristics. Companies in the top six deciles in this analysis are included in the next screening.
Subsequent EVA analysis reduces the universe to the ‘watchlist’. Selected names are reviewed using in- depth fundamental analysis to uncover companies with strong businesses and management, unrecognized growth potential, attractive valuations, dividend yield and/or dividend growth prospects.
The portfolio manager imposes disciplined controls at the country, sector, company and portfolio level. The Portfolio typically maintains a dividend yield in excess of the MSCI All Country World Index.
Investment Process
- 49 countries
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1. Country Allocation Framework
- Screen: Liquidity; Political Risk
- Rank: Valuation, Growth/Sentiment, Risk, Dividend Yield
- 29 countries (10 EM, 19 Developed)
- Universe: 4,000 – 5,000 companies
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2. Initial Analysis and Filter
- Screen: Liquidity (min. mkt. cap of US$1.5B)
- Rank: Attractive Valuation; Growth/Sentiment
- Universe: 1,500 – 2,000 companies
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3. EVA Analysis
- Ability to generate future economic profits driven by historical value creation and/or business transformation
- Universe: reduced to a watchlist of 600 – 800 companies
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4. Fundamental Research
- Strong management and fair value
- Distinct competitive advantage
- Historical financial analysis
- Positive dividend prospects
- ESG analysis
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5. Disciplined and Diversified
- Country: Minimum level of exposure to key markets
- Sector: 8 of 11 GICS sectors, +/- 15% of index
- Company: Maximum 6%
- 50 – 100 names
Investment Team
Steve Way leads portfolio management responsibilities for global equity and global dividend mandates at AGF Investments. As the architect of the Economic Value Added (EVA)-based investment process used for these industry-leading mandates, he is supported by a team that uses its collective experience to locate opportunities unrecognized by the market. Steve is a member of The Office of the CIO – a structure within the Investment Management team at AGF Investments. This leadership structure encourages and further embeds collaboration and active accountability across the Investment Management team and the broader organization. He is also a member of the AGF Investments Asset Allocation Committee (AAC), which consists 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.
Steve’s industry experience began when he joined AGF Investments in 1987. In 1991, he established AGF Management Limited’s wholly owned subsidiary AGF International Advisors Company Limited in Dublin, Ireland and ran the operations as Managing Director until 1994.
Steve holds a B.A. in Administrative and Commercial Studies from the University of Western Ontario. He is a CFA® charterholder and a member of CFA® Society Toronto.
CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.
Abhishek Ashok
M.A., MFE, CFA
Rasib Bhanji
MBA, CFA
Ling Han
M.Sc., MBA, CFA
Grace Huang
MBA, CFA
Marko Kais
CFA
John Kratochwil
MBA, P.Eng.
Henry Kwok
MBA
Renato Monzon
MBA
Aria Samarzadeh
MFin, CFA
Pulkit Sabharwal
MBA
Wai Tong
MBA, P.Eng., CFA
Wyeth Wright
CFA
Lillian Zhang
MBA, CFA
Regina Chi
CFA
CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.