The AGFiQ Global Infrastructure ETF (GLIF) has become an exciting ETF to watch in recent months. ETF Trends spoke with Bill Carey, CEO at AGF Investments LLC, who explained how the focus on infrastructure fits around the theme of broader diversification with uncorrelated returns and serves as an essential risk management opportunity as well.
This falls into a category where larger institutions, or investors, have access to that type of exposure via private funds, etc. However, GLIF allows an allocation methodology with a single ticker solution. So, along the lines of diversifying in the alternative space, this is a unique way to stand out.
Expanding on that, AGFiQ says there are several different ways to differentiate the way portfolios are assembled based on its fund.
AGFiQ looks to its quantitative background for the fund, which is one of the most important levers available regarding what’s being looked for from a global standpoint. GLIF is a worldwide product, and the way AGFiQ has traditionally invested has been more global in nature, making it not necessarily specific to the U.S. market.
That in mind, given the bipartisan nature of infrastructure spending in the U.S. and how it could be positive depending on what takes place in Washington, D.C. in the coming months. More broadly, however, AGFiQ looks at things through a multi-factor lense. This is one of the key drivers.
With infrastructure, they are looking for areas with a quality bend, exhibiting lower volatility. Traditionally, a lot of infrastructure has been built around components of the Dow Jones. However, the ability to widen has allowed for enhanced diversification of the portfolio, which is a primary goal. Using the quantitative background enables AGFiQ to cast a wider net.
As Carey remarks, “If you look at the categories of infrastructure funds, there may be specific exposures to a category within infrastructure. So, you get broad diversification through the single solution; you get global exposure versus domestic; and the least common denominator element in what we offer is a belief in the underlying factors that are embedded in our model that determine specific allocations in different securities.”
This all continues to resonate through the lens of AGF’s investing. There’s a focus on the alternative space, but introducing something like global infrastructure enhances potential diversification and the risk mitigation that was addressed.
The yield component provides a tailwind for an infrastructure allocation within portfolios. It hits on many things making sense from a diversification standpoint within a broader allocation framework. So, having a bit of a yield push helps to generate income for clients.
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