investment philosophy

Lincluden Investment Management offers a clearly defined investment philosophy and approach to portfolio construction in the following areas:

Value Investment Philosophy

As value investors we believe that financial markets are efficient in the long run but can be inefficient in the short and medium term. The investment process that we employ focuses on identifying mispriced securities to create diversified client portfolios that will outperform over time. Our goal is to identify securities that trade at a discount to our appraisal of their intrinsic or true economic value. This approach acts as a buffer from further price decline and offers the potential for greater capital appreciation.

We invest with a long-term focus, we perform our own research and we follow a strict price discipline when purchasing and selling securities. Performing our own research gives us the conviction to construct focused portfolios of our best ideas.


Our portfolio managers screen a broad universe of Canadian, U.S. and international stocks in our ongoing search for undervalued securities. Investment decisions are based on a thorough financial assessment of corporations and their management teams to identify securities that are trading at a substantial discount to our appraisal of their fair value.

Our focus on cash flow in determining a company's valuation is based on our belief that free cash flow is the best currency to enable a company to grow. By relying on our own original, in-depth research - a cornerstone of our investment process - our portfolio managers are able to act with confidence and conviction when investing in out-of-favor securities. Their disciplined investment process allows them to:

  • Analyze a working company over a representative time frame in order to effectively explore potential price disparities;
  • Estimate current and future normalized cash flows for a company;
  • Use our proprietary discounted cash flow valuation process to accurately value a company and its stock; and
  • Buy stocks at a discount.

Fixed Income

We believe that the economy and financial markets are cyclical in nature, and that the markets are not always efficient in recognizing value and risk. Our fixed income portfolios are structured to achieve the most efficient combination of duration, credit, yield curve and foreign exposure from a long-term, risk-reward perspective.

Our investment process begins with an economic overview, which allows us to develop a view on inflation - the key determinant of interest rates. Based on our view of value and risk, we then determine the appropriate portfolio duration which reflects our long-term view of inflationary trends relative to the current level of interest rates and shape of the yield curve. We believe that real interest rates should be calculated using long-term inflationary expectations instead of the current rate of inflation.

Our exposure to credit risk through corporate, provincial and municipal government issues is a reflection of our diligent risk-reward analysis and detailed credit analysis. We do not rely on rating agency reports to make our investment decisions; instead, we emphasize internal analysis by the fixed income team, with support from the equity team.

In searching for the best value opportunities in fixed income markets, we consider both domestic and foreign securities. When we find better value opportunities in foreign markets, our preference is to eliminate foreign exchange risk through the use of hedging.


Creating long-term wealth with a value-based, risk-managed approach requires disciplined asset allocation and security selection. Lincluden's valuation and portfolio structuring process incorporates a "top-down" approach to determine asset mix, and a "bottom-up" process to individual security selection. Our methodology factors in the fundamental long-term earning power of corporations, long-term interest rates and the dynamics of rapid asset re-pricing.

Balanced portfolios benefit from the insights of Lincluden's entire team of investment professionals. Based on analysis and discussion of interest rates, the inflationary outlook, and corporate profitability, we review the asset allocation weekly. Policy changes are generally incremental, reflecting Lincluden's long-term orientation. These changes reflect actual client benchmarks, but in the absence of client constraints, they will range from +10% to -15% of the equity component of a 60% equity/40% fixed-income benchmark.

Environmental, Social and Governance Policy

Lincluden has a long history of incorporating ESG analysis in its value driven, client focused investment approach. We believe that responsible investing is a fundamental component in our portfolio management process. In particular, our opinion is that environmental, social and governance factors can have significant impact on our assessment of the risk-vs-reward of the investments we analyze. By careful consideration of ESG factors, we aim to more effectively manage the investment risks while pursuing sustainable, long-term investment returns. This leads to a focus on quality, sustainability, and opportunity, and allows us to assess materiality of ESG factors into the investment process. We are committed to working with and accommodating clients who have individual ESG related requirements.

Lincluden is a signatory to the UN Principles for Responsible Investment (PRI), a supporter for the Task Force on Climate-Related Financial disclosures (TCFD), and a member of the Canadian Coalition for Good Governance.

Lincluden is committed to the goal of net zero by 2050. For clients that have elected to align with net zero, we will require 50% of portfolio holdings to have science-based targets (SBT) by 2030 and 100% by 2040. This methodology is aligned with Science Based Targets Initiatives portfolio coverage approach. Our Climate Action Plan can be found here

Our Environmental, Social and Governance Policy can be found here.

Our Proxy Voting Policy can be found here.

Our latest Proxy Voting Record can be found here.

The Lincluden Balanced Fund 2023 Proxy Voting Record can be found here