CC&L Equity Income & Growth Plus

Investment Objective

• Construct a portfolio of primarily income-oriented equity instruments focused on maximizing the long-term total return while generating a portfolio yield in excess of that of the S&P/TSX Composite Index.
• Maintain total risk below that of the S&P/TSX Composite Index over long-term periods.

Highlights

• Core approach. Diversified and carefully risk managed.
• Fundamental, bottom-up security selection.
• Proprietary company database.
• Integrates US securities to increase diversification.
• ESG considerations integrated into the strategy.

Investment Philosophy

• Macroeconomic themes influence markets over longer term.
• Opportunities exist when fundamentals vary from consensus expectations.
• Price attractiveness and valuation are key.
• Risk management is an integral component of process.

Investment Process

• Disciplined, conservative process: Investment process that strives to deliver protection of capital in “down” markets, good participation in “up” markets, and stable cash flows.
• Fundamental ranking system: Universe focused on yield-oriented securities ranked on key factors including financial and management strength, profitability, growth and price attractiveness.
• Independent bottom-up research: Understanding companies’ business models and long-term operating strategies.
• Management interviews: Confidence gauged through management interviews, on-site visits and discussions with sell-side research analysts, customers and competitors.
• Strategic outlook: Each business evaluated in context of its industry and competitive environment.
• Target prices: Price targets established and reviewed weekly to ensure consistent application of buy and sell discipline.
• Top-down overlay: Historical and current valuations and macroeconomic factors shape sector overweight or underweight decisions.

Portfolio Construction & Risk Management

• The portfolio generally holds dividend paying equities, REITs, income trusts and preferred shares with positive total relative return prospects and the team’s highest target returns.
• Fundamental analysis assesses business risk, liquidity and valuation risk.
• Portfolio construction strikes a balance between securities with dividend growth and high and sustainable yield.
• Risk management is part of the investment process, not an afterthought.
• There are strict position limits on individual security weights.