AGF Global Equity Strategy

Approach
Fundamental, bottom-up investment approach.
Cap
All cap
Benchmark
MSCI All Country World Index
Inception Date
May 1995
Documents

Key Reasons to Invest

    • A diversified global equity strategy that invests in attractively priced quality companies
    • Experienced, disciplined team with long-tenured leadership since inception
    • Fundamental research focused on strong management and fair value, historical financial analysis and distinct competitive advantage

Strategy

The AGF Global Equity Strategy is designed for institutional investors seeking global diversification through targeted exposure to growth-oriented companies around the world. The strategy’s objective is to emphasize countries with attractive valuations, growth/sentiment and risk profiles with a core investment style and a fundamental, bottom-up investment approach. Risk management is embedded throughout portfolio management.

Philosophy

We seek to capture returns from asset pricing inefficiencies at the country and at the company level. At the country level, we believe stock markets fluctuate based on several factors, including home country bias and investor sentiment. Thus, we use a disciplined Country Allocation Framework (CAF) to identify and exploit mispriced countries.

At the stock level, we believe the market at times fails to recognize the impact of a company's economic profitability, or Economic Value Added (EVA) – its return on investment in excess of its cost of capital – on its long-term share price performance. As such, we focus on the primary drivers of EVA, which allows us to more accurately evaluate a company's sustainable competitive advantage, invest with conviction and generate high active share.

We believe the market's short-term focus leads to the mispricing of stocks. Our long-term approach allows us to arbitrage market expectations relative to our differentiated perspectives, with the differences between winners and losers being amplified over time.

We believe that considering ESG factors can help uncover investment opportunities and reduce portfolio risk, and that ESG analysis is most impactful when fully integrated within the fundamental research process.

Process

Our investment process is based on the concept of identifying the key investment drivers of a company through EVA. We believe companies that effectively deploy capital and consistently earn a rate of return in excess of their cost of capital, have the ability to create long-term, positive economic value for shareholders. Recognizing that while EVA leads us to quality companies, we also emphasize valuation, which can lead us to mispriced stocks that have the potential to benefit from multiple expansion and earnings growth.

Our process is underpinned by fundamental stock selection and aided by our disciplined CAF. Political risk considerations and liquidity screens eliminate several countries from the global universe of 49 countries. The CAF helps identify countries from the remaining universe where local stock markets exhibit the appropriate combination of attractive valuation, low-risk characteristics and attractive growth/sentiment factors that will outperform in the long run.

A minimum market cap size and our tolerance levels for liquidity is applied when screening for companies. The remaining universe is then ranked based on valuation, growth and sentiment characteristics. An EVA screen is then applied to further reduce the universe to arrive at our watch list of companies. Selected names are reviewed using in-depth fundamental analysis to uncover companies with defensible businesses, strong management, attractive long-term growth prospects and attractive valuations. Analysts also incorporate financially-material ESG risks and opportunities in their investment thesis and valuation framework. During portfolio construction, we seek to ensure the portfolio is well-diversified and comprised of largely uncorrelated stocks. Several disciplined controls are imposed to achieve diversification across and within regions, countries and sectors.

Global Equity Process

Fund Managers

Stephen Way, CFA

Stephen Way, CFA

Senior Vice-President and Portfolio Manager
AGF Investments Inc.

Title and Position

Stephen Way leads AGF’s global equity team in Toronto, while maintaining portfolio management responsibilities for their global equity and emerging markets mandates. As the architect of the EVA-based (Economic Value Added) investment process used for these industry-leading mandates, he is supported by a team that uses their collective industry experience and globally diversified cultural backgrounds to locate opportunities unrecognized by the market. Stephen is also a member of the AGF 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.

Stephen holds a B.A. in Administrative and Commercial Studies from the University of Western Ontario. He is a CFA® charterholder and a member of the Toronto CFA Society.

Approach or Quote

Stephen’s industry experience began when he joined AGF in 1987. In 1991, he established AGF’s wholly owned subsidiary AGF International Advisors Company Limited in Dublin, Ireland and ran the operations as Managing Director until 1994.

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

33

Years in the industry

33

TEAM EXPERIENCE MATTERS

200+

Years of experience

10

Different home countries

13

Languages spoken

20+

Years - Stephen Way, the longest-tenured global equity manager in Canada

Analyst Name

MBA, JD, CHA
Portfolio Management
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