At Genus, our investment strategy is shaped by a global view that examines asset value, growth, expectation, momentum, quality and sustainability. This diversified approach helps ensure our fossil-free investments are strong.

Overall Portfolio Strategy

 

Securities are selected by specialist teams with in-depth expertise in each asset class, and a clearly defined process with proven results. Portfolios combine our expertise in stock selection and asset allocation with the complementary skill set of Addenda Capital, one of Canada’s leading fixed-income firms.

The overall asset allocation is driven by our DynaMix process, which evaluates more than 100 proven market indicators to forecast monthly asset class performance. Through these insights, Genus increases weightings to attractive areas and reduces exposure to those presenting more risk.

DynaMix insights help us systematically increase exposure to attractive asset classes and avoid those presenting more risk.

Genus Fossil Free’s Total Equity Investment Strategy

 

We combine Canadian and international stocks to build globally optimized fossil-free portfolios. As a result Genus Fossil Free offers a unique solution for resource-based markets like Canada.

Fossil Free Family of Funds

Genus is one of the few firms in Canada that offers an entire suite of fossil free strategies including fixed income and equity funds.   This allows us to choose from a variety of fossil free strategies to build a suitable fossil free portfolio that will aim to meet both your risk and return objectives. Our fossil free portfolio building blocks (or strategies) are as follows:

Government Bond Component

 

The investment objective of the Government Bond Component is to preserve capital and to create added value through its fixed income holdings.

 

To achieve this objective, the portfolio advisor primarily invests in Canadian bonds, debentures and other debt instruments. The minimum quality standard for bonds and debentures is a “BBB” credit rating as determined by the Dominion Bond Rating Service or another comparable rating service. It may also include privately placed investments if consistent with the Component’s overall objective.

 

The returns of this Component are derived from interest and capital appreciation on the securities held in the Component’s portfolio.

Fossil Free Corporate Bond

 

The investment objective of the Fossil Free Corporate Bond Component is to preserve capital and to create added value through its fixed income holdings.

 

To achieve this objective, the portfolio advisor primarily invests in Canadian bonds, debentures and other debt instruments. The minimum quality standard for bonds and debentures is a “BBB” credit rating as determined by the Dominion Bond Rating Service or another comparable rating service. It may also include privately placed investments if consistent with the Component’s overall objective.

 

The returns of this Component are derived from interest and capital appreciation on the securities held in the Component’s portfolio.

Fossil Free Dividend Equity

 

The investment objective of the Fossil Free Dividend Equity Component is to achieve maximum income consistent with preservation of capital with the potential for moderate growth.

 

To achieve this objective, Genus primarily invests in companies included in the S&P/TSX Composite and MSCI World Indexes that offer high income, such as equity securities with high dividend yields and income trust units. The primary strategy employed is one of quantitative security selection, holding between 40 and 100 securities that are expected to outperform the target indexes as a whole.  The Component may also use futures to manage cash flows, beta and currency exposure of the component without creating leverage.

 

The portfolio reflects reasonable GICS sector diversification with maximum single sector exposure capped at 30% and maximum 10% exposure in individual securities.

 

The returns of this Component are derived primarily from dividends and capital appreciation on the securities held in this Component’s portfolio.

Fossil Free CanGlobe Equity

 

The investment objective of the Fossil Free CanGlobe Equity Component is to achieve maximum income consistent with preservation of capital with the potential for moderate growth.

 

To achieve this objective, Genus primarily invests in equity securities of companies included in the S&P/TSX Composite and MSCI World Indexes. The primary strategy employed is one of quantitative security selection, holding between 60 and 120 securities that are expected to outperform the target indexes as a whole. The Component’s portfolio reflects diversification by country, sector and quality. Individual equity investments generally do not exceed 10% on a cost basis.

 

The returns of this Component are derived from dividends, capital appreciation on the securities held in this Component’s portfolio and currency movements.

Fossil Free Impact Equity

 

The investment objective of Fossil Free Impact Equity Component is to use funds to support companies making the biggest positive environmental and social impact while also seeking to achieve competitive returns with market-like risk.

 

Securities for this Component will be selected from the S&P/TSX, NASDAQ and MSCI World Indexes. Companies that appear weak with respect to environmental, social and governance characteristics are excluded as an initial screen.  For instance, all companies directly involved in extraction, processing and transportation of oil, gas and coal are excluded.  Next, a sustainable thematic approach, which seeks to profit from the long term trends that are unfolding, is applied. The belief is that population growth will affect demand for scarce resources such as food, water and energy, and that supporting life for more people will also increase the environmental strain on our planet.  As a result, the Component strives to thematically emphasize products and services that offer sustainable solutions to these challenges.

 

Investments are focused in companies that are leaders in areas such as: renewable energy, energy efficiency, water and waste management, low negative impact products, sustainable agriculture, as well as access to healthcare, education and technology.  The Component uses a multifaceted stock selection discipline that considers value, growth, momentum, quality and analyst expectations.

Go Fossil Free.

Let one of our Personal Portfolio Managers contact you to learn about your values, timeframe, risk comfort and overall objectives, and help devise your optimal Fossil Free investing strategy.

 What is ESG Investing?

In investment management, ESG (environmental, social and governance) refers to the three central factors in measuring the sustainability and ethical impact of a company. As a signatory to the United Nations Principles for Responsible Investing, Genus considers ESG issues across all of our mandates.

Environment

Companies are scored on the sustainability of their business practices, such as resource-, waste- and carbon-emissions management.

Social

Companies are scored on commitment to human rights, consumer protection, animal welfare and diversity within the workplace.

Governance

Companies are scored on items like transparency, executive compensation, employee relations and management structure.

Not all ESG funds are the same. It is important to distinguish genuinely fossil fuel free funds from the broader range of socially responsible and ethical funds. Many ESG and ethical funds include oil gas and coal companies that contribute to climate change. Our Genus Fossil Free funds take a firmer line with absolutely no investment in companies involved in extracting, processing or transporting fossil fuels.

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