AGF Investments Inc. Monday introduced AGF U.S. AlphaSector Class, an investment product for Canadian advisors seeking to manage their clients’ portfolio risk in volatile markets. The fund offers a different approach to risk by managing the impact of down markets.
“Canadian investors are conservative by nature and market volatility often leaves them on the sidelines,” said Gordon Forrester, executive vice president, product and marketing and head of retail, AGF Investments Inc.
“This fund addresses a Canadian market need with a unique solution that considers risk from a client’s perspective.”
Advised by Boston-based F-Squared Investments, AGF’s U.S. AlphaSector Class is constructed exclusively from nine exchange traded funds (ETFs) reflecting the 10 sectors of the S&P 500 in addition to one short-term treasury ETF.
“Our AlphaSector strategy is ‘client centric’ not ‘benchmark centric,” explains Howard Present, president and CEO, F-Squared Investments. “This partnership with AGF provides Canadian investors with a defensive complement to more volatile equity investments.”
The fund offers a way for investors to participate in rising markets and preserve capital while minimizing drawdown risk through an allocation strategy that identifies volatility at a sector level. Indicated sectors are then omitted from the portfolio and the assets are allocated equally to the remaining sectors. When three or fewer sectors are represented, the portfolio will begin building a position in cash equivalents.
“Our strategy allows us to focus on healthy sectors and eliminate our exposure to declining sectors. Our ability to go to 100% cash if our indicators dictate allows us to be truly defensive during downward trending markets,” adds Present.
AGF Investments is a unit of independent investment management firm AGF Management Ltd. (TSX:AGF.B). With approximately $37 billion in total assets under management, AGF serves more than one million investors.