Every day, Dynamic’s portfolio managers aim to build high conviction portfolios that deliver differentiated performance beyond the benchmark.
While some Canadian fund managers claim to be active, the reality is that they are actually "closet indexers" – charging fees for active management while passively mirroring an index. Unlike closet indexers and passive fund managers, Dynamic's legitimately active portfolio managers have the flexibility to:
Build concentrated, high conviction portfolios that look nothing like the index;
Exclude certain sectors, geographies or companies to better manage risk and aim to enhance returns;
Utilize capital market tools – such as options, hedges, futures and short-selling – to better manage volatility and aim to enhance returns;
Vary holdings to take advantage of emerging opportunities beyond the benchmark; and
Adjust cash levels during periods of market volatility
Active management is a style that fundamentally rejects benchmark hugging and closet indexing. One key criteria of truly active management is active share: the percentage of stocks in a portfolio that are different from those in the benchmark.
When it comes to active share a higher number means more of the portfolio stand out from its index.
It tells us just how active a manager really is; rather than mirroring the benchmark, it measures how far the manager goes beyond it. The fees that you pay for active management should get you exactly that: high active share can help deliver benchmark-beating performance.
Many Dynamic equity fund overviews include the fund’s active share percentage to show how the portfolio manager is actively exploiting opportunities beyond the index.
Historically speaking, investment portfolios that have high industry concentrations typically outperformed their less concentrated benchmarks and peers.
The simplest way to measure a portfolio’s concentration is by the number of holdings it has. The lower the number of holdings, the higher the concentration. Portfolios with low concentration, in other words, a high number of holdings, are more likely to display muted portfolio performance.
Portfolio concentration by the numbers
Research shows that concentrated U.S. larger-cap equity portfolios outperformed their less concentrated counterparts by 115 bps, U.S. small-cap by 96 bps and EAFE 166 bps annually, after fees.
Source: Cambridge Associates LLC, eVestment Alliance, Frank Russell Company, MSCI
R2 is a precise measurement that shows the correlation between a fund’s performance and that of the benchmark. When it comes to analyzing R2, the lower the better.
For example, an R2 of 99% means that 99% of the mutual fund’s performance is tied to its benchmark. In this example, only 1% of the fund’s performance came from the manager’s active investment choices beyond the benchmark.
Source: Ahimud & Goyenko, 2012
The Equity team employ a Quality at a Reasonable Price (QUARP®) investment approach that focuses on investing in a diversified portfolio of securities that pay a dividend or distribution while incorporating a capital preservation philosophy. Strict due diligence measures include both top-down and bottom-up analysis in determining security selection. Companies included in the portfolio represent best-in-class businesses that are dominant in their industry, have strong balance sheets and a history of increasing cash flows. Securities are purchased at a reasonable price which is defined as having an attractive valuation.
The Quantamental team uses a proprietary fundamental-based quantitative (“quantamental”) approach. The process favours companies that rank high on quality, value and growth metrics. Fundamental analysis is undertaken on attractive candidates prioritizing companies within industries believed to represent favourable opportunities based on prevailing macro conditions. Both fundamental analysis and quantitative tools are used to determine an investible universe. Options are then analyzed on the investible universe taking into consideration the fundamental view and incremental risk of the investment. The investable universe effectively consists of the more attractive stocks in the S&P 500 Index from a fundamental and quantitative perspective.
The Core Global Equity Team’s investment process and philosophy takes an active, bottom-up approach to investing and seeks out the best investment opportunities around the world, based on the team’s thorough on-the-ground fundamental research. As bottom-up, fundamental investors, the Portfolio Managers do not seek to mirror the attributes of an index and instead build concentrated portfolios one company at a time based on their views of individual company attributes, sector/industry dynamics and attractive valuations.
The Core Global Equity team employ their Six Principles framework, a set of guiding principles that helps shape and guide how they think as investors:
Investing, Not Renting
Think Independently
Tempered Temperament
Pragmatic Patience
Blend the Art and the Science
Minimize Mistakes = Maximize Returns
The Power Growth Team maintains an unwavering commitment to a bottom-up investment process to deliver concentrated, high-conviction portfolios. The team employs a repeatable multi-step process to identify companies that have the potential to become significantly larger companies in the future. Key factors in the investment criteria include but are not limited to revenue and earnings growth, financial strength, and management assessment. A long-term focus and ongoing due diligence are integral aspects of the investment process across various strategies.
The Value Equity Team takes a conservative approach to investing in high-quality companies trading at a reasonable discount to their intrinsic value, with a clear focus on downside protection. To meet this objective, the team performs extensive fundamental research in order to assess a company's financial strength, competitive advantages, and management teams. Not afraid to deviate from the benchmark, the Value Equity Team are legitimately active managers aiming to deliver attractively valued portfolios that can help clients stay invested over the long-term.
Originally founded in 1955 as a research boutique, Jarislowsky Fraser now manages emerging market equities—portfolios that meet the needs of pension funds, foundations, endowments, corporations and high-net-worth individuals from around the world, gathering over CA$58 billion in assets under management. The team of over 60 investment professionals employ a fundamentally driven, long-term investment philosophy that focuses on high-quality, well-governed and sustainable businesses that aim to deliver long-term growth in a lower-risk manner. As a wholly-owned subsidiary of The Bank of Nova Scotia, Jarislowsky Fraser operates as a distinct business division – its investment approach and decision-making process are fully independent from the bank and its other asset management businesses.
An independent financial advisor can help determine your goals and develop a process that is specific to your individual needs.
At Dynamic, we believe in the power of professional advice. Regardless of your circumstances, a financial advisor can help you reach your financial goals and work toward building enough wealth to sustain a comfortable retirement.
Here are some useful websites that may help you find or research an advisor that is in your area.
Find a list of organizations that are registered as a CIRO Dealer Member.
Get Started
Find a list of organizations that are registered as an CIRO Dealer Member.
Learn more
Learn more about investment management firms that are part of PMAC.
Learn more
Dynamic Active ETFs and Series F Mutual Funds are available during regular trading hours through your self-directed investing account.
Time is money. The earlier you can start saving and investing, the better.
You can buy Dynamic Active ETFs and Series F mutual funds during regular trading hours through your self-directed investing account and create a custom portfolio that best suits your investment needs.
If you are new to investing, below are links to some of the self-directed brokerage firms available in Canada. By clicking any of the links below, you will be leaving dynamic.ca.
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Commissions, management fees and expenses all may be associated with mutual fund investments, including ETFs. Please read the prospectus before investing. Mutual funds and ETFs are not guaranteed, their values change frequently, and past performance may not be repeated.
Views expressed regarding a particular investment, economy, industry or market sector should not be considered an indication of trading intent of any of the mutual funds managed by 1832 Asset Management LP. These views are not to be relied upon as investment advice nor should they be considered a recommendation to buy or sell. These views are subject to change at any time based upon markets and other conditions, and we disclaim any responsibility to update such views.
Dynamic®, Legitimately Active Management®, and QUARP® are registered trademarks of The Bank of Nova Scotia, used under license by, and is a division of, 1832 Asset Management L.P.
© Copyright 2026 The Bank of Nova Scotia. All rights reserved.
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