stable income equity
| Asset Class/Style | Canadian Equity / Value |
Overview
A focused Canadian dividend (income) equity portfolio that utilizes a bottom-up, value-based approach to security selection and portfolio construction.
Investment Process
Lincluden has consistently applied a value-based investment philosophy since its inception. Portfolio managers operate under the belief that financial markets are efficient in the long run but can be inefficient in the short and medium term providing an opportunity to identify mispriced securities. Equity portfolio managers are assigned sector responsibilities on a global basis. Each portfolio manager is charged with identifying investment opportunities within their area of responsibility. Portfolio construction is implemented with an objective of producing a portfolio with superior risk/reward characteristics, ensuring prudent diversification. The combination of thorough quantitative and qualitative analyses allows the team to identify companies trading at a substantial discount of fair value. A focus on cash flow in determining a company’s valuation reflects the fact that free cash flow is the best currency to enable a company to grow. By relying on their own original, in-depth research – portfolio managers are able to act with confidence and conviction when investing in securities which may be overlooked by others. The approach culminates in portfolios of high-quality companies with excellent prospects for long-term appreciation.
Strategy Description
Investment Objective
The investment objective of the Stable Income Equity strategy is to provide strong annual income and to achieve long-term capital appreciation. The portfolio will provide better capital protection and less volatility then the market by investing in a diversified portfolio of Canadian equity dividend paying securities.
Investment Strategies
The investment objective of the Stable Income Equity strategy will be achieved by investing in Canadian equity securities and securities linked to the performance of Canadian public companies which pay a strong and sustainable dividend yield.
Securities will be selected using a value based, bottom-up process, which also screens for free cash flow and dividend yield in order to identify attractive investment opportunities. The portfolio of securities selected will also be diversified to reflect a variety of companies and sectors. No single issuer may exceed 8% of the Stable Income Equity Strategy.
The Stable Income Equity Strategy will normally be invested in a minimum of five (5) sectors and will usually hold between 20 to 35 issuers in its portfolio of securities.
