Portfolio Construction

Further risk management occurs in the construction of the fund's portfolio.  There are definitive concentration limits in terms of the Fund’s investments in individual countries, industries and companies.

Within these limits the weighting of each security is calibrated according to the depth of discount to our long term valuation, and our level of conviction.

We aim to ensure that a majority portion of the portfolio is invested in ‘A’ list companies and we aim to have around 35 companies in the portfolio at any point in time.  We regard a core holding to be 3% and above.  Typically the top 10 holdings represent 45% of the portfolio.

As long-only investors, a critical factor in our performance has been our preparedness to hold cash and short term deposits (AGF's historical average has been 31%) when we cannot identify companies that meet our criteria or that are priced at a sufficient discount to our valuations.