AGF Announces Risk Rating, Fund Name and Proposed Investment Objective Changes
|Fund Name||Previous Risk Rating||Revised Risk Rating|
|AGF Canadian Dividend Income Fund||Low to Medium||Medium|
|AGF North American Dividend Income Class||Low to Medium||Medium|
|AGF North American Dividend Income Fund||Low to Medium||Medium|
|AGF China Focus Class||Medium to High||High|
|AGF Global Equity Class||Low to Medium||Medium|
|AGF Global Equity Fund||Low to Medium||Medium|
|AGF Elements Conservative Portfolio||Low||Low to Medium|
|AGF Elements Conservative Portfolio Class||Low||Low to Medium|
AGF Elements Yield Portfolio/Class Renamed to AGF Global Yield Fund/Class
Also effective today, AGF Elements Yield Portfolio has been renamed AGF Global Yield Fund and AGF Elements Yield Class has been renamed AGF Global Yield Class. These name changes are being made to better reflect the funds position as yield-oriented, monthly income paying offerings. AGF Global Yield Fund/Class can be used as a core holding to complement existing portfolios to manage volatility or enhance income.
At the special meeting of securityholders to be held on June 15, 2023, subject to extension or adjournment thereof, securityholders of each of AGF Strategic Income Fund will be asked to approve the following proposed changes in the investment objective of the fund:
|Fund||Current Investment Objective||Proposed Investment Objective|
|AGF Strategic Income Fund||The Fund’s objective is to provide high long-term total investment returns with moderate risk through a combination of long-term capital growth and current income. It invests primarily in a mix of common and preferred shares of Canadian companies, Canadian federal and provincial bonds, high-quality corporate bonds and money market instruments.||The Fund’s objective is to provide long-term capital growth and income with moderate risk. The Fund uses an asset allocation approach. It invests primarily in a diversified mix of funds and ETFs that provide exposure to global equity and fixed-income securities.|
- Name Change: AGF Strategic Income Fund will change its name to AGF Global Strategic Income Fund.
- Strategy Changes: The investment strategies of the AGF Strategic Income Fund will be amended.
Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm delivering excellence in investing in the public and private markets through its three distinct business lines: AGF Investments, AGF Private Capital and AGF Private Wealth.
Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual fund securities are not covered by the Canada Deposit Insurance Corporation or by any other government deposit insurer. There can be no assurances the fund will be able to obtain its net asset value at a constant amount or that the full amount of your investment in the fund will be returned to you.
Director, Corporate Communications
The family office for Mark Zuckerberg and Jack Dorsey backs French rival to Microsoft Excel – CNBC
French business planning software startup Pigment has raised $88 million in a funding round led by ICONIQ, the private investment fund that manages the money of tech billionaires such as Mark Zuckerberg and Jack Dorsey.
Pigment is best known for its business planning and forecasting platform that’s designed to be more user-friendly than Microsoft’s spreadsheet software Excel.
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The company, co-founded and helmed by dual CEOs Eleonore Crespo and Romain Niccoli, told CNBC it planned to use the funding to expand its reach in the U.S. and artificial intelligence.
Venture capital firms Felix Capital, Meritech, IVP, and FirstMark also participated in the funding round.
Pigment counts the likes of Klarna, Miro and Tommy Hilfiger owner PVH as its customers.
The company’s tools are mainly used by finance teams to plan and make financial and business decisions. As well as Microsoft, Pigment also views enterprise software tools from giants like Google, SAP and Oracle as rivals.
Crespo said that, in 2022, Pigment grew its revenues by 600% and its total user base increased tenfold — and insisted it was well positioned to compete with behemoth incumbent Microsoft.
“We not only have users in the finance team but outside of finance, and that’s super interesting for investors to hear that we are not a finance platform but a business database that can serve any business leader out there from HR to sales to marketing, to R&D [research and development],” she said.
“We are here to sell [to] any business leader. And not only that, but they have heard from their portfolio companies that we managed to serve the most forward-looking companies out there.”
Pigment also plans to use the latest influx of money to invest in the development of AI products.
It introduced a new service called Pigment AI last month, on the heels of heightened buzz surrounding AI and products like ChatGPT, which lets clients query data, identify patterns and automate analysis and reporting.
Crespo said there are no plans to increase headcount substantially and Pigment was instead looking to grow in a more sustainable way, given the pressure from investors on businesses to achieve profitability in favor of breakneck growth.
Saudi Arabia’s Public Investment Fund just reshaped pro golf. It’s not stopping there
Saudi Arabia’s mountain of cash has upended the world of professional golf. But that is only a small sliver of the money it is sinking into a number of prominent businesses elsewhere around the globe as the kingdom moves to diversify away from a dependence on oil income – and as the petro-kingdom tries to achieve its political goals.
The Saudi Public Investment Fund is a government-controlled fund that has $650 billion in assets under management, according to its most recent filing. It is aiming to top $1 trillion within a few years. A state-owned investment fund like the PIF is not unique. It is ranked only the seventh-largest in the world, according to the Sovereign Wealth Fund Institute.
While some of those are pension funds for a country’s citizens or public employees, others, like the PIF, operate the way a private sector investment firm might, trying to make money through a diversified portfolio of investments.
But what makes Saudi Arabia’s fund different from those private investment firms is that since the country faces widespread condemnation for its human rights record, its investments in sports and other entertainment companies can be seen as an attempt to polish that tarnished reputation.
The PIF’s creation of LIV Golf a year ago, reportedly at a cost of $2 billion, attracted many of the sport’s top players away from the US-based PGA Tour and Europe-based DP World Tour by offering big dollar prize money. It led to a year-long legal battle that banned LIV golfers from the established tours and brought some unwanted attention to Saudi’s human rights record. Critics of LIV Golf accused the Saudis of backing the new tour as a form of “sportswashing” its reputation.
But the legal battles, acrimony and competition for the best golfers between LIV and the PGA and DP World Tour suddenly ended Tuesday with the announcement that the three would form a combined for-profit company. The PIF plans to make undisclosed additional investments into the entity.
Soccer, video games and other investments
The chairman of the new golf series will be the chairman of state-owned petroleum company Saudi Aramco, Yasir Al-Rumayyan, who also controls English soccer team Newcastle United and is himself a governor of the PIF.
The Saudis have also been throwing big dollars at some of the world’s best known soccer players, wooing legends such as Cristiano Ronaldo and Karim Benzema to play in Saudi Pro League.
The investment in sports is not a vanity play, according to Al-Rumayyan.
“It all makes financial sense to us. We don’t like to subsidize things,” he said on an interview on CNBC Tuesday announcing the deal with the PGA.
But whether the Saudis’ investments are driven by a desire for profits or good publicity, what’s clear is that pro sports are not the only place where the Saudis are flexing their financial might.
For example, it has a total of $7.5 billion in investments in several leading video game companies, according to its most recent filing, giving it a 9% stake in Electronic Arts
(EA), a 7% stake in Take-Two Interactive and nearly a 5% stake in Activision Blizzard
(ATVI). It also owns more than 5% of Live Nation
(LYV), the concert promoter and owner of Ticketmaster, and significant stakes worth hundreds of millions each in cruiser operator Carnival Corp
(UBER) and Zoom
Its biggest US investment is in upstart electric vehicle maker Lucid
(LCDX). The PIF owns 60% of Lucid
(LCDX)’s stock, worth $7.6 billion as of Tuesday’s close. Lucid
(LCDX) recently announced the PIF would invest another $1.8 billion in the company to help fund its operations.
In 2018 when Elon Musk was thinking about taking Tesla
(TSLA) private, he sought funding from the PIF, which already had a stake in Tesla
(TSLA) at that time. It no longer lists Tesla
(TSLA) as one of its holdings. But last year it helped Musk with his $44 billion purchase of Twitter by agreeing to roll over its existing $1.9 billion investment in the social media platform to the new Musk-controlled company.
Not all of the PIF investments have been publicly disclosed. For example it’s not clear exactly how much it invested to start up LIV Golf. And the Washington Post has reported that it invested $2 billion into a private equity firm created by Jared Kushner, Donald Trump’s son-in-law, soon after Kushner left his position in the White House in January of 2021. CNN has not been able to confirm that report, but what is known is that LIV Golf tournaments have been held on Trump Organization properties.
Saudi Arabia and human rights criticisms
Many of these investments, including the creation of LIV Golf, have sparked controversy.
The PIF is chaired by Mohammed bin Salman, the Crown Prince of Saudi Arabia. Bin Salman is the man a US intelligence report names as responsible for approving the operation that led to the 2018 murder of journalist Jamal Khashoggi. Bin Salman has denied involvement in Khashoggi’s killing.
In addition, the US State Department says the Kingdom’s dismal human rights record includes free speech restrictions, torture, political prisoners and enforced disappearances.
And families of some of the victims of the Sept. 11 terrorist attack decried the news of the LIV-PGA agreement Tuesday. Some have accused the Saudi government of complicity with those attacks. Fifteen of the 19 al Qaeda terrorists who hijacked four planes were Saudi nationals, but the Saudi government has denied any involvement in the attacks. The 9/11 Commission established by Congress said in 2004 that it had found “no evidence that the Saudi government as an institution or senior Saudi officials individually funded” al Qaeda.
– CNN’s Coy Wire, Jack Bantock and Steve Almasy contributed to this report
Investors turn to a variety of investment products in search of higher yield and income
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In a period of market volatility, higher interest rates and inflation, more high-net-worth investors desire higher yield and income-producing products for their portfolios that go beyond the traditional stocks or bonds, according to a new report from Investor Economics.
Covered-call exchange-traded funds (ETFs) and private credit are two types of investments investors mention in particular, says Carlos Cardone, managing director of Toronto-based Investor Economics, an ISS Market Intelligence business.
Covered-call strategies are designed to provide exposure to a portfolio of stocks while writing covered calls against them to earn premiums, says Darcie Crowe, senior portfolio manager and senior wealth advisor with Crowe Private Wealth at Canaccord Genuity Wealth Management Canada in Vancouver. She cautions clients to look beyond the attractive yield.
Some clients don’t fully recognize the downside risks of the strategies, along with the fees involved. They also don’t understand they’re sacrificing some of the upside in exchange for income, she adds.
“We want to make sure clients are looking at it from a total return perspective,” Ms. Crowe says. “If we have a positive outlook on the underlying stocks, our preference is typically to hold them for the long term, collect the dividends and not cap the upside potential through a covered-call strategy.”
Andrew Feindel, portfolio manager and investment advisor with Richie Feindel Wealth Management at Richardson Wealth Ltd. in Toronto, says clients need to comprehend all the nuances of what they’re buying. He recently landed a few clients who had a bunch of covered calls.
“They didn’t understand why they weren’t protected when markets went down,” Mr. Feindel says. “There’s this whole idea that covered calls protect you and they don’t. If the markets go down, you’ll lose that amount. When the markets go up, you just got a higher dividend because you’re receiving those options.”
Private credit offers strong yields but also higher risk
In terms of private credit, Ms. Crowe says it has been a popular asset class for high-net-worth clients for several years, as some move away from the traditional 60/40 equity-bond portfolio to explore alternatives.
“They’re looking for products that can be included in a portfolio to generate income through a diversified return stream,” she says.
Ms. Crowe positions it for a “very unique investor profile.” For starters, the investor must be accredited to have access to these products and have a minimum amount to invest in them – typically around $25,000.
Private credit funds provide access to a portfolio of loans, typically to private corporations in the small- to mid-cap space, Ms. Crowe explains, noting that interest rates are typically higher than traditional bank loans.
“Private credit portfolios would be considered higher risk because, usually, the loans within these portfolios are made to companies that aren’t able to access loans from the bank for a variety of reasons,” she adds.
While private credit offers strong yields, the underlying loans are illiquid and have what Ms. Crowe calls “the opposite characteristics of high-interest savings accounts, in many aspects,” which clients can access at any time. In this case, private credit redemptions are typically available on a quarterly basis, sometimes longer, and often have a minimum initial hold period of up to a year.
“It’s important for clients to know that this is a long-term investment horizon,” she says. “It needs to be used specifically in those situations in which clients have no need to draw on those funds in the immediate term.”
Mr. Feindel expects to see more of these types of funds, especially as institutions add to their private equity exposure in pension plans.
“It will become democratized in the sense that it’s not just institutions anymore but individuals purchasing,” he says.
Opportunities in private real estate, preferred shares and bonds
Another trend Ms. Crowe has seen is more investment toward private real estate portfolios. She notes that multi-family residential real estate has been a strong performer and provides attractive yields and cash flow, while also having a limited correlation to equity markets.
“Given the strong rents we have seen in Canada, they have demonstrated solid net operating income growth over the past several years,” she says.
Rate-reset preferred shares are another asset class Ms. Crowe likes due to the attractive tax-efficient yield. She says high-quality companies have preferred share dividend yields ranging from 6 to 8 per cent.
“These preferred shares will typically reset their dividend payment every five years based on a spread above a government bond with a similar term,” she says.
“Looking ahead, many of these preferred shares are going to be resetting at yields significantly higher than at their previous reset date, when government bond yields were exceptionally low.”
That creates a great opportunity for strong yield, in addition to capital gains potential as dividends reset higher, she adds.
Meanwhile, Mr. Feindel sees a resurgence in short-term bonds occurring this year.
He says the average bond lost 14 per cent last year, which he notes was “not just their worst year on record,” but the worst year by far due to rising interest rates and other factors.
Now that interest rates may stabilize, there could be an opportunity for a closer look.
“A lot of them are paying 5.8 per cent right now, yield to maturity, and then they’ll likely do well when interest rates start going down,” he adds.
Investor Economics’ Mr. Cardone also says not to count out traditional fixed-income products.
“If we can continue to see this environment where inflation has been easing, and have stable interest rates, we’re going to start to see a massive comeback to fixed income,” he says.
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