Guardian Capital LP has launched two new actively managed ETFs on CBOE Canada: the Guardian i3 International Quality Growth Fund (GIQI) and the Guardian Strategic Income Fund (GSIF). These ETFs are share classes designed to replicate the performance of existing mutual funds, offering investors a more accessible and cost-effective way to invest in these strategies
Here’s how these funds work and why they could be a good fit for your portfolio.
How the ETFs Work
The Guardian i3 International Quality Growth Fund (GIQI) is designed to help investors grow their wealth over the long term by focusing on stocks of companies based outside of North America.
The fund invests in mid- to large-sized companies that are well-established in their industries. It spreads its investments across different sectors, regions, and companies to reduce risk and provide a balanced approach. The main goal of GIQI is to generate returns through careful stock selection, focusing on finding high-quality companies with strong growth potential, rather than simply riding broader market trends.
As of the end of August 2024, the fund’s official page shows the highest sector allocations in tech (22.5%), financials (17.6%), healthcare (16%), industrials (14.5%), and consumer discretionary (14%). Country-wise, France holds the largest share (21.6%), followed by Germany (18%), the Netherlands (13%), the UK (9.4%), and Japan (8.7%).
The fund’s top 10 holdings account for 57% of its assets and include names like Novo Nordisk (7.4%), ASML Holdings (6.7%), Wolters Kluwer (6.5%), Schneider Electric (6.5%), and Atlas Copco (6%). Please note that holdings are subject to change.
On the other hand, the Guardian Strategic Income Fund (GSIF) is built to help investors grow or preserve their capital and receive steady monthly income. It tries to achieve this by investing in securities that may benefit from shifts in interest rates and credit spreads.
The fund aims for lower volatility and lower correlation with traditional equity and fixed income markets, making it an option for diversifying portfolios and reducing overall market risk while still generating returns.
As of the end of August 2024, the fund holds US 5YR Note (21%), Canadian Treasury Bill (11%), USDM futures adjustment (5%), and US 10YR Note (CBT) Dec 2024 (4.7%), among other diverse securities.
Why Investors Should Consider These ETFs
GIQI investors will gain exposure to a combination of quality and growth, targeting factors that have historically driven superior risk-adjusted returns over the past 30 years.
The fund utilizes big data and machine learning to predict sustainable earnings growth, offering strong alpha generation potential. Additionally, GIQI provides exposure to some of the most innovative and disruptive companies across various geographies and sectors, positioning the fund to capture long-term revenue growth and enhance diversification within a portfolio. The fund charges 0.65% as management fees.
GSIF offers high monthly income, potentially exceeding that of traditional investment-grade fixed-income securities. It also focuses on risk mitigation, aiming to preserve capital by hedging against systemic risks while maintaining low volatility and a low correlation to traditional bond and equity markets. Its active and flexible approach to security selection allows the fund to opportunistically adjust based on yield curve and credit spread dynamics, providing an adaptable strategy for income-seeking investors. The fund charges 0.85% as management fees.
About Guardian Capital LP
Guardian Capital LP is an asset management subsidiary of Guardian Capital Group Limited (Guardian). As of July 2, 2024, Guardian had approximately USD $118.8 billion in total assets under management. Founded in 1962, Guardian has built a reputation for steady growth, long-term relationships, and its core values of authenticity, integrity, stability, and trustworthiness. Guardian Capital Group’s common and Class A shares are listed on the Toronto Stock Exchange under the symbols GCG and GCG.A.
Guardian’s investment management activities are conducted through subsidiaries, including Guardian Capital LP (GCLP), GuardCap Asset Management Limited (GuardCap), Alta Capital Management LLC (Alta), Agincourt Capital Management LLC (Agincourt), and Sterling Capital Management LLC (Sterling), which joined the group in July 2024. This broad network of subsidiaries supports Guardian’s leadership in delivering diverse and innovative asset management solutions across global markets.
Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.