18 AM Announces New Equity Mandate
18 Asset Management is pleased to announce the inception of a new mandate and new fund. 18 AM seeded the 18 AM Canadian Equity mandate on December 31, 2013. This mandate is available for institutional clients on a separate account basis. Additionally, our distribution partner, Lysander Funds Limited, has chosen this mandate for a new mutual fund launched on December 31, 2014 (the Lysander - 18 Asset Management Canadian Equity Fund – Fundserve LYZ905A/F/O). The 18 AM Canadian Equity mandate invests solely in Canadian equities, selected from large and liquid companies in Canada. The mandate benefits from 18 AM’s experience in portfolio management, risk management, style allocation, systematic investment process construction and security selection.
The mandate’s investment objective is to outperform its benchmark, the TSX Total Return Index (TSX TRI), by 2% per year. The mandate is suitable for clients seeking enhanced return opportunity from their Canadian Equity allocation through a portfolio focused on being highly differentiated from the benchmark.
Highlights of the mandate include:
- A diversified 30 stock portfolio
- 100% fully invested at all times
- 50% style allocation to a conservative, income and quality oriented strategy (Defence)
- 50% style allocation to a growth and momentum oriented strategy (Offence)
Client Benefits include:
- Lower volatility opportunity due to exposure to two opposing styles
- Return potential of focused portfolio with little benchmark orientation
- High liquidity and low transaction costs given investment universe
- Understanding of how money is managed given our intuitive investment process
The mandate is designed to capture the benefits from two central portfolio management principles:
- focused portfolios and
- high conviction style betas.
By combining two 15 stock focused portfolios - a low volatility, high income portfolio (Defence) with a high growth and momentum (Offence) portfolio – the mandate allows clients the opportunity to participate in different market environments through a diversified exposure to beta complements.
Using a systematic stock selection process, 18 AM selects companies exhibiting the most attractive fundamental factors representing the two style betas. Companies within each focused style portfolio are equally weighted with periodic rebalancing across holdings and styles. Minimal benchmark orientation by sector and market capitalization leads to a diversified portfolio with potential to be highly differentiated from the benchmark.