Canadian Core Equity

TD Asset Management Canadian Equity

At a glance

We seek out companies that have demonstrated superior earnings growth, positive business momentum, and sustainable profitability while ensuring we do not overpay for these growth characteristics.

Designed to Tilt Balance of Risk and Reward in Your Favour

Rigorous bottom-up equity research and sophisticated portfolio construction methodology that generates alpha though security selection.
Blending quantitative screening with qualitative analysis.
Consistency in income and high-impact growth characteristics – including superior earnings growth, positive business momentum and sustainable profitability.

Disciplined risk management with a large risk management team that is separated from investment functions to help safeguard client assets.
Active management by an investment team with an average of over 20 years of experience.
Client-centric focus. The size of our operations creates efficiencies, and those benefits are incorporated into client objectives.

Philosophy and approach

With over 30 years of experience managing equity investments, our competitive advantage is a time-tested investment framework underpinned by a quality-biased philosophy, a continuously evolving process, a disciplined risk management culture and a deep commitment to client services.

We believe that a company’s stock reacts positively to growth in earnings and cash flow, and that indicators of sustainable earnings growth appear at the company level before they are recognized in the stock price. We seek out companies that have demonstrated superior earnings growth, positive business momentum and sustainable profitability while ensuring we do not overpay for these growth characteristics.

Investment Process:

The focus is on finding leading companies that demonstrate solid business fundamentals, consistency in earnings and earnings-per-share growth, strong free-cash-flow generation and quality management. We also look for reasonable value and favorable potential for price to earnings (P/E) multiple expansion, taking into account current price characteristics in both absolute and relative terms

The buy and sell decisions are made based on company fundamentals and financials, portfolio risk-control constraints, absolute and relative valuations, and expected trading costs. Our investment process incorporates multiple trigger points for reviewing individual stocks, where we consider the current characteristics of a stock versus the original rationale for purchase.

The sell decision is based on the assessment of fundamental changes to a business. Some triggers that will prompt review or sale of a security include:

Realization of our target price.

Change in the company’s or industry’s fundamentals.

Change in senior management.

Corporate actions (such as merger and acquisition activity).

Identification of superior investment alternatives.

The focus of the portfolio construction process is to develop a well-balanced portfolio of attractive companies while incorporating the stock and market views distilled during the research process. The portfolio aims to hold securities in order to be :
Diversified: A diversified portfolio of at least 30 companies invested in no fewer than six of 10 S&P/ TSX industry sectors and no single security exposure will be greater than 10%.

Large-and Mid-Cap-Focused:A focus on large-and mid-cap companies, with select small-cap exposure for added growth opportunities.

Strategic: Material exposure to individual positions in order to seek to achieve impactful results. The portfolio is constructed within set guidelines to help ensure diversification and thorough risk control.

ESG

Environment, Social, and Governance (ESG) integration aligns with our philosophy of seeking investments in sustainable, long-term assets through a risk-managed process. We strive for a fully integrated ESG engagement process in our investment products.

Our Fundamental Equity Investment team integrates ESG factors directly into their investment analysis through a process involving the following central components:

Systemstic ESG Reviews: We look at a number of ESG indicators that we believe apply to all industry sectors and elevate any issues that could put a company’s expected earnings at risk. Each company research report incorporates an ESG assessment, ensuring concerns around risk exposures are reviewed, updated and evaluated by our sector analysts.

Thermatic ESG Research: We produce broad thematic ESG research on topics that have the potential to highly impact the companies in which invest. We have found this to be the best way to highlight the structural changes to various sectors and impacts to the companies themselves.

Active Ownership: Our in-depth research helps our commitment to active ownership. We strive to be active owners by engaging with the companies in which we invest and by taking advantage of our voting rights to help effect change. Our intent is to both improve corporate ESG disclosures as well as improve companies' ESG-related practices.

Learn more about TD Global Investment Solutions' focus on sustainable investing>