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Morningstar has downgraded its People Rating on AGF Global Select to Average from Above Average. Lead manager Tony Genua will step off the fund and retire from the firm on Nov. 30, 2024. Genua has over 30 years of industry experience and has managed a variety of global and US equity strategies at AGF, including AGF Global Select since 2013. Our rating downgrade reflects the loss of a key investor who made an important contribution to the fund’s success.
Auritro Kundu, Mike Archibald, and Regina Chi will take over from Genua. They were appointed as managers in April 2024.
Kundu joined AGF in 2015 as an analyst, covering technology and consumer discretionary companies. He is new to portfolio management and was first promoted to co-manager on AGF’s American Growth Fund in January 2023, where he worked with Genua.
Archibald joined AGF as an associate manager in 2015 and has managed AGF Canadian Growth Equity since 2020. He provides quantitative expertise but lacks extensive fundamental experience.
Chi joined the firm in 2017 and runs AGF‘s Emerging Markets strategies. While she brings over 25 years of experience in international and emerging markets equities, her results haven’t stood out relative to her peers.
Kundu, Archibald, and Chi will work together to manage the portfolio, though Kundu has the final say in case of disagreements. This team-based approach is a notable shift for the firm, which has historically operated under a lead manager structure, and the new managers have more to prove.
A research team of 12 sector analysts continues to support the strategy. The team has roughly 15 years of industry experience on average, but only five members have been with the firm for five or more years.
The fund’s process is not intended to change. It starts by searching the global all-cap universe of 5,000-plus securities using a proprietary model. It looks for companies with market caps over USD 500 million, revenue and earnings growth, positive earnings revisions, and rising cash flows, narrowing it down to about 350 stocks. After several rounds of research and considering attractive valuations and relative strength, they end up with a concentrated portfolio of 25-40 stocks that they see as market leaders, innovators, and thematic winners.
Stock-picking drives country and sector weights, but the team usually limits individual positions to 8% and sector exposure to 20 percentage points over or under the fund’s benchmark. The strategy will hold securities from at least seven countries, but emerging markets exposure is capped at 30%.
Over Genua’s tenure, the fund has delivered great results. From March 2013 through October 2024, AGF Global Select Series F gained 17.0% annualized, beating the Morningstar Global Markets Index by 4.1 percentage points and ranking it in the top decile of its Global Equity category. As Genua exits, it’s fair to wonder if the strategy’s past success is as relevant and approach it with some healthy skepticism.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.
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