AGF Global Sustainable Equity ADR Strategy

Approach
Blend of thematic and bottom up approach
Cap
All-Cap
Benchmark
MSCI World Net Index
Inception Date
December 2018
Resources

Key Reasons to Invest

1

Invest in the thematic opportunities that are arising from the ongoing transition to a sustainable economy.

2

Differentiated positioning - a concentrated global portfolio with high active share.

3

Make a positive impact while minimizing environmental footprint.

Overview

Strategy

Our dedicated Sustainable Investment Team combines thematic analysis with a disciplined, fundamental bottom-up approach. Our objective is to outperform broad global equity markets by providing differentiated positioning focused on sustainable themes. We seek to make an impact by providing capital to companies developing solutions to key sustainability challenges, and by measuring both financial and non-financial performance.

Philosophy

We believe that a transition to a more sustainable economy is underway and is gaining velocity. Drivers include policy and regulation, changing corporate objectives, societal pressure, and technological advances. Our view is that investing in the thematic opportunities related to this transition forms a compelling and enduring strategy to deliver both positive impact and the opportunity for superior returns.

Process

Our investment process combines thematic analysis with fundamental stock selection. We map 1,000 companies to four proprietary sustainable themes (Energy & Power, Water Solutions, Waste & Pollution Control, and Health and Well Being). We then identify accelerating sub-themes by examining societal trends, demand, cyclicality, growth, margin potential, regulatory drivers, pricing power, competition, and barriers to entry. We further examine sub-themes across GICS sectors to identify which segments of the Value Chain (materials, suppliers, producers) contain the most attractive investment opportunities.

Our fundamental analysis seeks to identify companies with revenues accelerating in line with our sub-themes. Our Stage Appropriate Analysis allows us to consider stocks across the maturity spectrum and assesses fundamentals such as revenue and earnings growth, margins, management, free cash flow, valuation, and sustainability of competitive position. ESG analysis examines risks and opportunities related to climate, diversity, and human capital, and our active ownership stance governs our proxy voting and corporate engagements.

Our objective is to outperform broad global equity markets by constructing a differentiated portfolio of 25 to 400 holdings from all capitalization ranges, each providing solutions to key sustainability challenges.

Investment Process

Universe
  • Map 1,000 companies providing sustainable solutions to four broad themes and 14 sub-themes.
  • 1. Thematic Analysis
    • Identify attractive sub-themes based on demand, regulatory drivers, and new products and technologies.
  • 2. Value Chain Assessment
    • Determine most attractive segment of value chain (material, suppliers, and producers.)
  • 3. Fundamental Analysis
    • Assess companies with ESG attributes, accelerating revenues, and clear catalysts in line with our sustainable themes.
Portfolio Construction
  • 25 – 40 names. Unconstrained, Impact measured.

Investment Team

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