AGF Fixed Income Plus Strategy

Approach
Core “Plus” Investment Approach
Cap
All cap
Benchmark
Bloomberg Barclays Canadian Aggregate Bond Index*
Inception Date
March 1993
Resources
AGF Fixed Income Plus Fact Sheet AGF Fixed Income Plus Commentary

Key Reasons to Invest

Overview

Strategy

The AGF Fixed Income Plus Strategy is an actively managed investment-grade fixed-income strategy that focuses on high-quality Canadian government bonds and corporate fixed income securities with a history of steady interest or distribution payouts and favourable fundamentals. The Strategy combines a conservative Core "anchor" of high-quality, along with the flexibility to hold alternative fixed-income securities such as convertible debentures, high-yield bonds and emerging market debt, forming a compelling and enduring strategy which seeks to deliver the opportunity for superior returns versus the benchmark, while contributing to portfolio stability and generating an attractive yield. 

Philosophy

We believe the key to adding value in fixed income is to leverage our long-tenured expertise in our core competencies to deliver sustainable alpha to our clients. We focus on adding value by strategically allocating across alternative fixed-income categories with historically low correlations to traditional bond markets . We believe our strengths lie in the use of global fixed-income specialists to capture unique investment opportunities and that our disciplined methodology, using quantitative models and fundamental research, enables us to capture inefficiencies across fixed-income categories.

Process

The AGF Fixed Income Plus investment process combines a large, high-quality core investment grade bond portfolio with select exposure to additional income-generating asset classes up to a maximum of 30%.

The core portion emphasizes quality while focusing on managing term and duration relative to the benchmark. The core also includes high-quality investment grade credits with attractive yield spreads. The "plus" portion employs alternative income-generating asset classes, such as high-yield bonds, convertible debentures and emerging market debt, to supplement the core.

These asset classes, while providing higher yields and/or return expectations, can also dampen interest rate volatility within the portfolio, as they typically exhibit low correlations with traditional bonds due to their lower interest rate sensitivity. They also provide the potential for capital appreciation, which has rewarded investors in this strategy historically. Top-down decisions are distilled from the Team’s macro-economic analysis of the Canadian and global economy. Some of the factors discussed include economic growth, inflation, central bank policy, yields and spreads. This analysis drives the core/”plus” exposure as well as duration, curve, credit and sector allocations. These decisions emphasize relative risk-adjusted return prospects.

The strategy is well-diversified across fixed-income categories and sectors while a risk-controlled framework is integrated within the research and portfolio management process, with a goal of generating favourable risk-return outcomes for our clients. Equity research from the North American Research and Global Equity teams is leveraged to identify opportunities in corporate, convertible and emerging market bonds with strong potential to outperform.

Investment Process

Universe
The AGF Fixed Income Plus investment process combines a large, high quality core investment grade bond portfolio with select exposure to additional income-generating asset classes up to a maximum of 30%.
Portfolio

Investment Team

David Stonehouse
David Stonehouse, MBA, CFA
Interim Chief Investment Officer & Head of North American and Specialty Investments
AGF Investments Inc.
Jean-Sébastien Nadeau
Jean-Sébastien Nadeau, MBA, CFA
Portfolio Manager
AGF Investments Inc.
Analysts
Analysts
Investment Team
David Stonehouse, MBA, CFA
Interim Chief Investment Officer & Head of North American and Specialty Investments

David Stonehouse is Interim Chief Investment Officer, AGF Investments Inc. In this role, supported by AGF Investments’ Office of the CIO, David oversees the execution of AGF’s investment management strategy, leads and develops the investment management team and determines research priorities, policies and programs that aim to achieve the investment objectives of the organization and its clients. David continues to oversee AGF Investments’ North American and Specialty Investments teams, while maintaining direct portfolio management responsibilities for his current mandates.

With nearly three decades of experience managing equity, fixed income and balanced mandates, David employs a rigorous and disciplined investment process combining a top-down approach to duration and asset allocation with a bottom-up approach to security selection.

David received a B.Sc. in Applied Science from Queen’s University, an MBA in Finance and Accounting from McMaster University and is a CFA® charterholder.

Registered as a Portfolio Manager under AGF Investments Inc.

CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.
Jean-Sébastien Nadeau, MBA, CFA
Portfolio Manager

Jean-Sébastien Nadeau is a Portfolio Manager on the AGF Fixed Income Plus Fund and supports the AGF Global Corporate Bond Fund as part of the Fixed Income Team. He plays a key role in portfolio construction and also contributes to fundamental and credit research across both strategies.

Prior to joining AGF Investments, Jean-Sébastien was a lead analyst at the Bank of Canada where he gained valuable insight into how monetary policy is developed and implemented in Canada. He started his career in the Corporate Fixed Income Team of Caisse de Depot et placement du Quebec.

Jean-Sébastien earned a BBA (major in Finance) and an MBA (Finance) from Université Laval. He holds a Financial Risk Manager (FRM) designation and is a CFA® charterholder.

CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.
Jie Shi
MFE
Analyst
AGF Investments Inc.
Sherry Xu
MBA, CFA
Foreign Exchange Analyst
AGF Investments Inc.
Tom Nakamura
CFA
VP, Head of Fixed Income & Currencies & Portfolio Manager
AGF Investments Inc.
Daniel Chivu
CIM
Multi-Asset Portfolio Specialist
AGF Investments Inc.

CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.