POWER UP YOUR INCOME
Guardian i³ Global Dividend Premium Yield Fund
The Guardian i³ Global Dividend Premium Yield Fund (the “Fund”) gives investors access to our flagship Global Dividend Growth strategy, managed by our i³ Investments™ Team, with the addition of a covered-call options overlay, overseen by our Directed Outcomes team, which aims to increase the income yield of the portfolio.
Based on our flagship Global Dividend Growth strategy, which is a longstanding solution that incorporates artificial intelligence (AI) into its analytics model1 to help seek out companies providing strong total return potential.
Layering on a conservative covered call strategy allows us the potential to optimize for an attractive mix of long-term capital appreciation while delivering enhanced, tax-efficient2 monthly distributions.
Investment process – Phase one
Dividend portfolio construction
The Guardian i³ Global Dividend Premium Yield Fund provides exposure to a portfolio of global dividend-paying equities selected by our i³ Investments™ Team. Led by Sri Iyer, Managing Director and Head of i³ Investments™, this team of portfolio managers and data scientists are at the forefront of AI utilization in securities analysis, blending technology with human expertise to screen and select from over 3,000 global large-caps stocks that exhibit strong earnings and dividend growth, as well as cash flow sustainability.
The i³ Investments™ Team has a core belief that successful asset management is built upon three pillars of investing: Growth, Payout and Sustainability of cash flows (GPS).
GROWTH
This is the crucial focus on capital appreciation. Over the long term, we believe this is possible by investing in companies with strong and consistent revenue and growth in earnings.
PAYOUT
The amount of shareholder yield generated by a company is a key component of long-term return, consisting not just of dividend yield but also the level of share-buybacks that a company is engaged in. The Fund seeks out global companies offering attractive shareholder yield, which typically translates into strong total return potential.
SUSTAINABILITY OF CASH FLOWS
Earnings and yield need to be sustainable for a company to be a successful long-term investment. Capturing free cash flow growth is crucial for price discovery and growing payouts.
Investment process – Phase two
Creating enhanced income while protecting returns
Most of the historical returns of the Global Dividend Growth strategy have come from capital appreciation, and in the view of the i³ Investments™ Team, preserving the capital appreciation of stocks is a crucial component to long-term wealth creation.
For many investors, particularly retirees, generating tax-efficient income, while still being able to participate in meaningful growth opportunities can be challenging. A covered call strategy can be a powerful way to maintain an allocation to equities, while seeking to generate a higher level of tax efficient income than stocks alone, which is meant to help investors meet their income generation goals.
In the case of the Guardian i³ Global Dividend Premium Yield Fund, covered calls will be written on up to 50% of the Fund’s net asset value, aiming to provide enhanced and tax-efficient income, while still capturing market growth.
The dynamic, market volatility-adjusted, covered-call options overlay, overseen by Dino Bourdos, who has extensive derivatives experience, and our Directed Outcomes team, focus on taking advantage of market volatility and options pricing in order to generate covered call premiums, enhancing the existing dividend yield provided by the underlying stocks in the Fund’s portfolio. This options overlay is managed with a goal of generating a similar total return (that is the combination of capital gains and income) to our existing Global Dividend Growth strategy, while aiming to provide a higher proportion of that return from covered call premiums rather than capital appreciation.
The i³ Investments™ edge
AI PREDICTIONS, HUMAN DECISIONS
GEMX³, the i³ Investments™ Team’s proprietary AI analytics model1 has been trained over the last decade to analyze and forecast the likelihood of dividend growth as well as dividend cuts. The forecast model aims to unlock insights enabling the i³ Investments™ Team to quickly adapt to fast-moving market events and target better outcomes for investors.
MANAGING RETURNS AND RISK
Enabled by AI, the i³ Investments™ Team’s data-driven approach aims to identify which securities have the highest probability of cutting their dividend, effectively assessing the downside risks in real-time. Each stock in the portfolio is closely monitored. Since inception of our Global Dividend Growth strategy, there has not been a single company that has cut its dividend while being held in the strategy.
A FOCUS ON TOTAL RETURN
The i³ Investments™ Team believes dividend investing should be focused on total returns. For inclusion in the Fund’s portfolio, the team looks for equities that exhibit three elements of total return – growth, payout and sustainability of cash-flow.
The i³ Investments™ Team believes this can be achieved by prioritizing companies that exhibit a high probability of dividends and earnings growth over the ones with high dividend yield. In fact, over the past 50 years, the S&P 500 Dividend Aristocrats Index (proxy for dividend growers) has outperformed the S&P 500 High Dividend Index (proxy for high yield dividend payers)4.
Key reasons to invest
MONTHLY, TAX-EFFICIENT INCOME
The Fund pays monthly distributions, which are expected to be tax-efficient. The option premiums earned from the covered call strategy, which are taxed as capital gains, are utilized to help generate the Fund’s distribution yields. Furthermore, option premiums generally increase alongside market volatility, thus, we expect premiums from the options overlay should generally increase with volatility.
EXPOSURE TO HIGH-QUALITY GLOBAL STOCKS
By investing in a portfolio of high-quality, high conviction global dividend-paying equities, the Fund aims to provide investors with exposure to attractive upside growth potential with defensive characteristics (such as sustainable dividend payouts and low volatility) which is further bolstered by the income provided by the covered call option premiums.
TWO LAYERS OF ACTIVE MANAGEMENT
Both the investments in the underlying global equity stocks and the covered call strategy are actively managed, seeking to keep you well positioned through varying market conditions and to optimize the mix between persistent income and long-term growth potential.
Portfolio management teams
i³ INVESTMENTS™ TEAM - ACTIVE STOCK SELECTION
Sri Iyer MBA
Managing Director, Head of i3 InvestmentsTM
Fiona Wilson MBA, CFA
Sr. Portfolio Manager
Adam Cilio MMF, CFA, FRM
Sr. Portfolio Manager, Engineer
Yvonne Jin CFA, MMF, FRM
Portfolio Manager, Engineer
Saravanan Mani MScAC
Software Engineer
Joel Elford MSc
Data Scientist
Arushi Ahuja MSc
Data Scientist
GEMX³ A.I. System
Digital Analyst
DIRECTED OUTCOMES - ACTIVELY MANAGED OPTIONS
Dino Bourdos CFA, CIM
Head of Investment Solutions
David Onyett-Jeffries CFA, MA
Vice President, Economics & Multi-Asset Solutions
Candice Zhuang
Investment Analyst
Key product details
Name: Guardian i³ Global Dividend Premium Yield Fund
Frequency of Distribution: Monthly
Investment Objective: The primary objective of the Fund is to provide long-term capital appreciation and regular distributions by investing directly and indirectly primarily in global dividend-paying securities and employing a dynamic covered call option writing strategy.
| SERIES | A | F | ETF |
|---|---|---|---|
| Fund Code/Ticker | GCG 518 | GCG 618 | GIDY |
| Management Fee | 1.70% | 0.70% | 0.70% |
1 i3 InvestmentsTM Team is a portfolio management team with Guardian Capital LP, a registered portfolio manager. The i3 InvestmentsTM Team combines quantitative and fundamental analysis in managing investment portfolios. The quantitative component of the team’s investment process has evolved as new tools and datasets have become available and, over time, new quantitative models which incorporate aspects of artificial intelligence have been incorporated. The i3 InvestmentsTM Team provides a modern approach to portfolio construction, combining the advantages of quantitative analysis, big data, and artificial intelligence with the experience, perspective, and decision-making of our investment team. The application of quantitative investment analysis that incorporates artificial intelligence and machine learning in a forecast model is forward looking and the simulated results are subject to inherent limitations. Investment strategies which rely on predictive artificial intelligence and quantitative models may perform differently than expected, as a result of, among other things, the factors used in the models, the weight placed on each factor, changes from the factors’ historical trends and the limitations of technology in the construction and implementation of the models. There is no guarantee that the use of the quantitative model and artificial intelligence will result in effective investment decisions. There are no guarantees that dividend paying stocks will continue to pay dividends. All investments are subject to risk, including loss. There is no assurance that any investment strategy will be successful.
2 Distributions are expected to be primarily capital gains generated from option premiums and securities transactions or return of capital, which are taxed more favourably than income.
3 GEMX is the i3 InvestmentsTM Team’s proprietary analytics model, incorporating AI into a multi-factor algorithm programmed and trained by the i³ Investments™ Team.
4 Source: Ned Davis Research as of December 31, 2024
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