AGF ETFs embrace ESG and infrastructure themes

Morningstar Canada 13 February, 2018 | 10:00PM

AGF Investments Inc. has launched a pair of strategic-beta exchange-traded funds with global equity mandates, one investing in stocks that rank highly according to environmental, social and governance (ESG) factors, and the other in global infrastructure stocks.

AGFiQ Enhanced Global ESG Factors (symbol: QEF) and AGFiQ Enhanced Global Infrastructure ETF (symbol: QIF) opened for trading on Feb. 12 on the NEO Exchange. The management fee for each ETF is 0.45%, which covers most expenses.

Portfolio management is carried out by AGFiQ Asset Management, AGF's quantitative-investing platform. It combines personnel from AGF and from AGF affiliates Highstreet Asset Management Inc. of London, Ont., and Boston-based FFCM LLC.

For both ETFs, the stock-selection process involves screening for growth, value, quality and risk factors. In addition, stocks selected for AGFiQ Enhanced Global ESG Factors are subject to a proprietary quantitative multi-factor model that generates ESG rankings.

The managers of each ETF will also employ risk constraints concerning exposure by country, industry, sector, style and individual security concentrations. These constraints are designed to foster portfolio diversification, liquidity and risk mitigation.

The portfolios of the ETFs will be reconstituted and rebalanced on a monthly basis, but management can rebalance at other times as well, depending on their assessments of market conditions.

The AGFiQ Enhanced Global Infrastructure ETF uses a quantitative, multi-factor investment approach to provide investors with access to the diversification and benefits of this high growth area by investing primarily in global equity securities of issuers in the infrastructure industry and related sectors including telecom, utilities, energy and transportation.

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