Greystone’s primary international equity product is the EAFE Plus Fund. The EAFE Plus Fund is comprised of two sub-funds: the Greystone EAFE Growth Fund, sub-advised by Hansberger Global Investors (HGI) and the Greystone International Equity Fund.
These sub-funds both have investment philosophies that focus on high quality, sustainable long-term growth. However, despite a common investment philosophy, Greystone’s approach differs from Hansberger’s. While Hansberger is more of a classic absolute-growth manager, Greystone defines itself as a relative growth manager.
Greystone uses this diversity to enhance the overall risk/return characteristics of the combined EAFE Plus Fund. Clients also have the alternative to participate in the sub-funds on an individual basis.
EAFE Growth Fund
The principle role of the EAFE Growth Fund is to generate an extra value added return over the course of a market cycle. HGL is a focused bottom-up stock selection manager. The firm follows a disciplined process based on the principles of high quality, long-term sustainable growth. They use quantitative tools to screen a vast universe of international stocks to establish a narrow focus list that is then complimented with qualitative assessments of key fundamental factors. The process is disciplined and rigorous. Longer term results attest to its effectiveness.
Greystone International Equity Fund
The Fund uses a disciplined, three-step process in keeping with Greystone discipline of using quantitative and qualitative methods to manage a portfolio that focuses on relative growth.
Greystone’s International Equity Team seeks companies with the best earnings growth characteristics relative to their peers and the market at large. We select quantitative variables that best highlight those relative growth characteristics, and avoid the “hurdle rates” employed by absolute growth managers, which can result in a riskier portfolio.
Greystone’s stocks may over a market cycle because of this relative-growth factor (e.g. earnings growth of 5-10% may be relatively attractive at times). Greystone also looks at earnings surprise characteristics for changes “at the margin,” meaning companies with accelerating growth in earnings.
Lastly, Greystone uses valuation levels as a cross check, because we do not think that growth and valuation are polar opposites. This helps us not overpay for the earnings growth.
Greystone’s risk-conscious, relative-growth philosophy underpins the rationale for using our international strategy to off-set HGI as part of the EAFE Plus Fund.