AGF Global Select Equity ADR Strategy

Overview

Strategy

A bottom-up growth investment style that looks for companies with above-average earnings and revenue growth relative to their historical earnings, the industry or overall market.

Philosophy

We believe that investing in the growth leaders of each market cycle offers investors the best opportunity to outperform over time. For this reason, we seek companies that reflect innovation and quality, while exhibiting a clearly defined strategy for achieving above average growth and the proven ability to implement and drive the strategy forward. Our approach leads to a concentrated, high conviction portfolio.

Investment Process

We employ a bottom-up stock selection process based on in-depth fundamental research. Our process begins with a global investment universe of over 5,000 securities

This universe is then narrowed to a list of 350+ companies through a variety of both qualitative and quantitative screens to identify companies in the universe that exhibit growth characteristics defined by our team. The quantitative screens narrow the investable universe by analyzing key factors such as revenue growth, earnings growth, positive earnings revisions and rising free cash flow. Growth measures are viewed from both an absolute and relative basis, as well as a historical perspective in conjunction with an examination of sustainability into the foreseeable future.

Proprietary research models and external databases are utilized to determine these characteristics for each company. The qualitative analysis continues to narrow the investable universe to 200+ companies through on-going, targeted research. This analysis identifies strong companies with leading product or service innovations, strong management and industry leaders in attractive markets. Company valuations are constantly monitored on both an absolute and relative basis compared to a peer group and the market, and valuation is also considered on a relative basis considering the long-term growth expectations. The rigorous bottom-up research process ensures each candidate for inclusion exhibits strong fundamentals.

The catalyst identification process further reduces the universe to 100+ companies, singling out potential purchase candidates. Factors scrutinized at this stage include market share trends, research and development (R&D), free cash flow generation and profitability. These factors are included in evaluating a company's ability to grow at above average rates. Innovation and the allocation of spending to R&D are closely monitored, as is the productivity of this spending.

Our resulting high-conviction portfolio consists of 25-40 companies that exhibit strong growth characteristics.

Investment Process