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With a low correlation to traditional asset classes, a well-managed long/short strategy can further diversify your clients’ portfolios. Portfolio managers can take advantage of underperforming stocks by adding short positions, potentially providing meaningful downside protection. This gives a long/short strategy a unique benefit of generating returns from both rising and falling stock prices.

The RBC North American Equity Team

The team has a long track record of successfully managing equity portfolios. The touchstone of their process is a commitment to understanding a wide variety of outcomes for the stocks they follow.

26
portfolio managers and analysts
$60+ billion
in assets under management
300+ years
of combined experience

RBC Long/Short North American Equity Fund extends the team’s prior long-only scenario-based approach, adding short exposure where the range of outcomes are sufficiently less favourable than market expectations. They do this by:

  • Focusing on a range of outcomes for future financial stock performance
  • Avoiding attachment to any single forecast
  • Assessing probability-weighted outcomes of a range of scenarios
  • Initiating long and short positions reflective of the most favorable risk / reward
  • Continuously recalibrating views

Portfolio overview

investment process en

Long exposure may range from 0-200%.
Short exposure may range from 0-100%.
Sector allocation is focused on industries offering the most dispersion and stock-picking opportunity.
Geographic split between U.S. and Canadian equity is based on the bottom-up opportunity set.
Typical holding size is 3% for long positions and 1-2% for short positions.

Absolute returns

Aims to provide consistent equity returns with meaningful alpha during drawdowns.

Diversification

Seeks to provide a lower correlation to traditional asset classes, focusing on industries with the greatest stock-picking opportunity.

Expertise

Managed by the RBC North American Equity team. Their investment approach is collegial, systematic, iterative and repeatable and has been honed since 2002.

  • Portfolio engineering capabilities are embedded into the team, tasked with enhancing the portfolio managers’ understanding of the risks within their portfolio and continuously refining their investment process.
  • Proprietary software is employed to better understand and manage factor exposures. These tools were developed specifically for the mandates run by the RBC North American Equity team.
  • Risk limits on position sizing and leverage are embedded in the strategy. These are described in the mandate guidelines and overseen by RBC GAM’s Investment Risk Management team, which reports to the Chief Investment Officer.

To learn more about RBC Long/Short North American Equity Fund, speak to an advisor.

Disclosure

This information is not intended to be an offer or solicitation to buy or sell securities or to participate in or subscribe for any service. No securities are being offered, except pursuant and subject to the respective offering documents and subscription materials, which may be provided to qualified investors only, and not to any other category of investor. This document is for general information only and is not, nor does it purport to be, a complete description of an investment in any RBC investment fund. If there is an inconsistency between this document and the respective offering documents, the provisions of the respective offering documents shall prevail. Investments in alternative funds are speculative and involve significant risk of loss of all or a substantial amount of your investment. Alternative funds (i) may engage in leverage and other speculative investment practices that may increase the risk of investment loss; (ii) can be highly illiquid; (iii) are not required to provide periodic pricing or valuation information to investors; and (iv) are not subject to the same regulatory requirements as prospectus-offered mutual funds. In assessing the suitability of these investments, investors should carefully consider their personal circumstances, including time horizon, liquidity needs, portfolio size, income, investment knowledge and attitude toward price fluctuations. Investors should consult their professional advisors and consultants regarding any tax, accounting, legal or financial considerations before making a decision as to whether the funds mentioned in this material are a suitable investment for them. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the Fund’s offering documents before investing. The performance data provided assumes reinvestment of distributions only and does not take into account sales, redemption, distribution or optional charges or income taxes payable by any unitholder that would have reduced returns. Mutual funds are not covered by the Canada Deposit Insurance Corporation or by any other government deposit insurer. The unit values of mutual funds change frequently. The unit values of non-money market funds change frequently. Past performance may not be repeated.