AGF Management has launched AGFiQ Asset Management in the US market – a quantitative investment platform combining the strengths of investment professionals across AGF and its affiliates from Highstreet Asset Management and FFCM.
Back in November 2015, AGF announced that it acquired the majority stake in FFCM, a Boston-based ETF adviser and asset management firm whose expertise is delivered through a family of alternative and smart-beta ETFs and a number of ETF managed strategies.
Since that time much has happened to onboard FFCM into the AGF family.
"This strategic investment strengthened our core competency in developing and managing our quantitative products," says Blake C Goldring, chairman and chief executive officer, AGF Management. "The ability for us to bring together the investment management bench at both FFCM and Highstreet has reinforced AGF's commitment to offering innovative ideas that focus on risk mitigation, while offering active market participation."
"The addition of the team at FFCM has deepened AGF's platform from which to develop investment products, including ETFs, designed in an effort to manage volatility and deliver more consistent, repeatable results," adds Goldring.
Led by chief executive officer Bill Carey, FFCM creates, structures and manages ETFs. As ETF strategists, the investment team has a thorough understanding of the underlying instruments, which enables better asset allocation decisions and risk controls.
"Partnering with AGF has provided greater opportunity to grow our research, marketing and product development capabilities, while also bringing us operational scale and efficiencies," says Carey. "Early this year we were able to see this partnership flourish as we came together to form AGFiQ with the launch of seven QuantShares ETFs to the Canadian marketplace."
AGFiQ's QuantShares suite of US-listed factor-based market neutral and sector neutral ETFs make use of "long-short" strategies in efforts of potentially generating spread returns that may help insulate investors from the ups and downs of the market. The firm offers four factor-based market neutral funds which provide exposure to momentum (MOM), value (CHEP), size (SIZ), and anti-beta (BTAL), and rounds out its line-up with an income-focused ETF, its Hedged Dividend Income Fund (DIVA).
Factor-based investing can offer a rigorous, empirically supported method for disciplined asset allocation in a systematic, risk-controlled manner.
"Our suite of ETFs were developed with the intention of isolating factor performance as much as possible in the marketplace. Those strategies can be quite useful for investors looking for uncorrelated income streams, attempting to smooth out returns, or 'tilting' a given portfolio towards a desired factor," adds Carey.
On October 5 2016, FFCM reduced certain expense ratios across its entire line-up of funds. Certain expenses across the line-up of QuantShares ETFs powered by AGFiQ have been limited to 75 basis points from 99 basis points for DIVA and 149 basis point for all other funds.
"This across-the-board expense ratio reduction speaks to our broader commitment to ensuring that investors in our products can access our strategies cost effectively as well as to the operational efficiencies achieved with our integration into AGF," says Carey.