AGF launches defensive fund class

AGF Investments has introduced its U.S. AlphaSector Class, which is designed for Canadian clients seeking to manage their portfolio risk in volatile markets.

The class aims to mitigate the impact of down markets because “market volatility leaves [investors] on the sidelines,” says Gordon Forrester, executive, head of retail at AGF Investments.

He adds, “This fund addresses a Canadian market need [and] considers risk from clients’ perspectives.” He finds Canadian investors are “conservative by nature.”

Boston-based F-Squared Investments will manage the class, which consists of a group of ETFs that reflect the 10 sectors of the S&P 500.

The company says investors who choose the new class will be able to participate in rising markets and preserve capital while minimizing their risk. This can be accomplished since the class has implemented an allocation strategy that identifies volatility at a sector level.

During times of market stress, for example, volatile sectors will be omitted from the portfolio and the assets will be reallocated. When three sectors or fewer are represented in the class, the portfolio will build a position in cash equivalents.

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