Generating alpha in volatile times: AGF Investments – Best Smart Beta Equity ETF Issuer ($100m-$1bn)
By Philippa Aylmer – Headquartered in Toronto, AGF Investments has had a strong presence in the US for some time. The firm manages assets totalling USD927 million its combined US operations of 40-Act mutual funds, separately managed accounts, US-listed ETFs and model portfolios for a range of clients in the intermediary retail and institutional channels.
However, since the acquisition of Boston-based quant manager, FFCM, AGF is making headway in the intermediary retail market in the US. Earlier this year, the firm brought in Damion Hendrickson, Managing Director of US Business at AGF Investments LLC, to run and to set the strategy for the US business.
“Our strength is in adding value on an asset allocator and due diligence team model, so our focus is going to be on growing the business via registered investment advisers, family offices and private bank models,” says Hendrickson.
He explains that while generally, ETFs have been focused on plain vanilla exposure, at AGF they have “flowed against that with the creation of innovative vehicles that are risk diversifiers and consistently adding alpha.”
“The fact that we have been able to create a market neutral structure differentiates us from our competitors. When the markets sold off, our products and specifically BTAL, were able to deliver the returns they were supposed to, and they added a really significant hedge to people’s portfolios at a time of need.”
Not surprisingly, AGF has seen assets under management for BTAL increase from USD113 million at end of December 2019 to USD229 million as of 24 September 2020.
“We weathered this market really well and our ETF business continues to grow.”
“Our Canadian ETF business has seen positive inflows too. That is because performance has been remarkably strong, and we are focusing on the places that investors are looking for. A year ago, we had a little over CAD50 million and now we are north of CAD160,” says Hendrickson.
It has been an interesting year on a personal level for Hendrickson too. “My first day in the job was 2 March 2020 so I only spent 5 days with my team in the office.” However, he states that it allowed him to take a step back, set the strategy with his team and “we still had some pretty good opportunities to put BTAL in front of people.”
Like a lot of people Hendrickson and his team are settling into the new normal. “We are trying to grow our business virtually. As an organisation, we are set up well with technology and have been able to connect with clients seamlessly. We also have a fantastic political strategist, Greg Valliere, who provides daily commentary on the forthcoming US elections and its potential implications on the markets.”
ETFs are one of the fastest growing assets in the organisation, says Hendrickson, and “we will look to expand our ETF line up in alignment with investor needs while continuing to focus on the alternatives space as well as sustainable investments.
“At AGF, we aim to consistently add alpha and focus on risk mitigation and that is what differentiate us from others in the market.”
Managing Director, US Business, AGF Investments LLC
Damion Hendrickson is responsible for accelerating the strategic growth of AGF’s US operations. Damion is also accountable for managing AGF’s institutional and strategic partnerships as well as enhancing distribution across key intermediary channels such as the Registered Investment Advisor (RIA) channel. Damion brings more than 25 years of investment distribution and financial services experience across roles with Fidelity Investments, BNY Mellon Asset Management and, most recently, HSBC Global Asset Management.