Desjardins Alternative ETFs

Diversification by design | NEW liquid alternative ETFs

Enhance the risk-adjusted returns of your clients’ portfolios

Aim for stability in volatile markets

Desjardins' liquid alternative ETFs give your clients exclusive access to our sophisticated investment strategies, with low correlations to traditional asset classes to protect your clients from volatility.

  • Objective: Stable returns in all market cycles
  • Strategy: Equity long/short
  • Composition: Highly liquid asset class
  • Financial leverage: Low to medium use
  • No performance fees

Our alternative strategies target absolute positive returns regardless of whether markets are up or down.

They are made up of long and short positions in combinations that offer rigorous risk management through:

  • Potential for capital appreciation with low risk.
  • Potential loss mitigation in bear markets.
  • Significant reduction in systematic risk exposure.
  • Very low correlation to traditional asset classes.
    – A diversification effect for the investment portfolio.
    – Improved risk-adjusted return from a portfolio perspective.

What is a long position and short position?

A long or buying position is generally a position in which the fund benefits when the underlying security increases in value. This is the case when you are buying a stock and expect it to appreciate in value. A short or selling position benefits when the underlying security declines in value. In the case of stocks, for example, they involve selling securities that you don't currently own but hope to buy back later at a lower price.

Complementary strategies

Geography Canadian markets Global markets
Target Beta – Short Term 0 relative to the TSX Between -0.3 and + 0.3 compared to the MSCI World
Securities held Common shares and sector ETFs Index futures and Index ETFs
Long / short strategy Pairs Individual positions
Active management Discretionary Quantitative
Decision-making process Portfolio manager Systematic with portfolio manager oversight

Investment process

Our specialists analyze quantitative and trend data to find complementary pairs of companies that present a promising opportunity and showcase our ideas with stronger conviction.

Typically selected within the same industry, these business pairs, which make up our long and short mix, allow us to target:

  • A relative outperformance strategy based on fundamental analysis

    • Long and short positions in companies within the same industry
    • The long position meets our fundamental investment criteria, while the short portion seeks to isolate market and sector risk.
  • Mean reversion strategy

    • Relative valuation
    • Strongly correlated securities that exhibit reversion to the mean characteristics.
  • Arbitrage strategy

    • Use of observable price inefficiencies that may occur before or after a corporate event such as a merger, reorganization, recapitalization, acquisition, spin-off or other similar transaction

Each pair aims to be neutral in dollar, beta and industry.

Investment objective: Maximize returns under controlled volatility while maintaining a low beta with global equity markets.

The Fund seeks to exploit inefficiencies in global equity markets by applying a purely quantitative approach to its systematic long/short portfolio management strategy:

  • Indicators

    The model relies on multiple indicators that can be categorized into:

    • Fundamental
    • Technical
    • Sentiment

    These indicators are measurable and interpretable from both economic and financial market perspectives.

  • Insights

    These indicators have historically been consistent in explaining alpha and are expected to do so in the future. They were leveraging:

    • Backtested data and empirical analysis
    • Quantitative research
    • Portfolio manager experience
  • Optimization

    The exclusive suite of indicators are used to score equity market indices in the investment universe.

    With these scores, combined with a set of constraints on volatility and diversification among others, the model:

    • Recommends a well-diversified portfolio composed of liquid instruments (index ETFs and futures)
    • Optimizes for returns under controlled volatility

Our team 1

Desjardins Global Asset Management Inc. (DGAM) is one of the largest portfolio managers in Canada.

  • $77B+ in assets under management
  •  84 investment professionals
  •  20+ETFs

Want to speak to a regional sales director about our investment solutions?

  1. As at December 31, 2022.
  2. General and specific information
    Desjardins Exchange Traded Funds are not guaranteed, their value fluctuates frequently and their past performance is not indicative of their future returns. Commissions, management fees and expenses may all be associated with exchange traded fund investments. Please read the prospectus before investing. Desjardins Global Asset Management Inc. is the manager and portfolio manager of the Desjardins Exchange Traded Funds. These Funds are offered by registered dealers.
    The Desjardins Alt Long/Short Equity Market Neutral ETF and the Desjardins Alt Long/Short Global Equity Markets ETF are alternative mutual funds. They can invest in asset classes or use investment strategies that are not permitted for other types of mutual funds. The specific strategies that differentiate these ETFs from other types of mutual funds include the use of cash borrowings for investment purposes, short sales and derivatives. Leverage amplifies gains and losses. While the strategies will be used in accordance with the ETF’s investment objectives and investment strategies, during certain market conditions they may accelerate the pace at which your investment decreases in value.

    For advisor use only
    This information is confidential and intended only for representatives who are registered with a securities regulatory authority. At no time should this information be shared with investors or included in promotional materials.