Our Investment Process
The Basics
- Focused on investment management that meets our Client’s objectives, while also providing strict accountability and a high level of personal service.
- Every client’s mandate is customized based upon risk and expected return both in terms of the overall asset mix and the choice of individual securities.
- Risk tolerance is used to help determine the accepted standard of quality within each account in terms of ratings of securities selected.
- All clients receive a customized Investment Policy Statement (IPS)
Investment Policy Statement
- History of contributing to our clients success to help achieve their goals.
- Focused on attaining optimal outcomes for our clients.
- The Investment Policy Statement will outline the agreed-upon risk and return objectives, and the constraints, including time horizon, income requirements, liquidity needs, etc.
- Specific preferences or constraints to particular securities or classes of securities are to be noted and also and potential trading restrictions should be advised.
Investment Strategy
The asset allocation will be determined from the account mandate and the underlying securities that are selected for the portfolio.
Treegrove will use a value based investment strategy to invest it client’s assets under management.
Treegrove will use a value based investment strategy to invest it client’s assets under management.
Our Value Process
Equity Security Selection Methodology
Our value process starts by screening companies in North America using a value screen. The companies that are derived from the screen are then analyzed using the following three three factors – it’s value, its management, and its current equity price.
Treegrove will invest outside of North America through the use of exchange traded funds.
Price Segmentation
Initially, we formulate a detailed analysis of a company’s cash flow, business value, competitive advantages, and future earnings potential. Our understanding of a company is enhanced through discussions with management, research analysts, and competitors.
Security Selection
Our target is an out of favour company selling at a significant discount to our targeted value. We seek to diversify our client’s portfolios over 20 to 30 positions, with each position ranging from 3-4% of the total invested funds.
Security Sale Process
Securities may be sold from the portfolio when any of the following factors occur
- Better opportunities
- Security reaches the target price
- Erosion of fundamentals
- Trim when holding exceeds our target weight
Fixed Income Security Selection Methodology
We review the markets and try to determine the direction of interest rates. We consider Canadian economic growth, inflation, client income needs and taxes to determine an appropriate duration for the portfolio.
We purchase high quality preferred shares and focus on corporate bonds issued by Canadian investors. Due to the lack of issues of corporate bonds, we typically invest in fixed income securities through the use of ETFs. Our investment policy mandate allows for quite a bit of latitude in terms of allocation to bonds. Currently, our allocation is as low as the mandate allows given the historically low interest rates.