AGF Management Limited

Thank you for standing by, and welcome to the Q1 2025 AGF Management Limited Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star 11 on your telephone. As a reminder, this call is being recorded. I would now like to introduce your host for today's conference, Mr. Tseng. You may begin.

Thank you, Operator, and good morning, everyone. I'm Ken Tseng, Chief Financial Officer of AGF Management Limited. Today, we will be discussing the financial results of the first quarter of fiscal 2025. Slides supporting today's call and webcast can be found in the Investor Relations section of AGF.com. Also speaking on the call today will be Kevin McCready, Chief Executive Officer and Chief Investment Officer. For the Q&A, period following the presentation, Judy Goldring, President and Head of Global Distribution, and Ash Lawrence, Head of AGF Capital Partners, will also be available to address questions. Slide 4 provides the agenda for today's call. After the prepared remarks, we will be happy to take questions. With that, I will now turn the call over to Kevin.

Thank you, Ken, and thank you everyone for joining us today. The first quarter of 2025 saw increased volatility as global markets grappled with the potential implications of trade wars and the highly uncertain macro backdrop. Despite the rise in market volatility, Q1 was a strong quarter for AJF. I'll begin with some highlights. AUM and fee earning assets were $53.8 billion at the end of Q1, up 20% from a year ago. Our retail and mutual fund business reported net sales of $342 million in the quarter. which is a significant improvement from Q4 and Q1 of last year and outpaces the growth of the Canadian mutual fund industry. Three of AGF investment funds, the AGF Global Select Fund, AGF American Growth Fund, and the AGF Fixed Income Plus Fund earned fund grade A plus awards, which are given annually to investment funds that have delivered consistent, outstanding, risk-adjusted performance throughout the year. Earlier in the year, we launched two new alternative products in the Canadian market. One with our AGF Capital Partners business, the AGF NHC Tactical Alpha Fund. This fund is an absolute return-oriented strategy that aims to generate attractive, risk-adjusted returns across market regimes while maintaining low beta to traditional asset classes. The second one with our AGF Investment business is the AGF Enhanced U.S. Income Plus Fund. This fund aims to provide long-term capital appreciation and generate a high level of consistent income by employing dynamic option strategies. Both products seek to provide lower volatility, which bodes well for the current market environment. We reported adjusted diluted EPS of 48 cents in the quarter. In addition, we have $403 million in short and long-term investments on our balance sheet, net debt of $52 million, with $161 million available on our credit facility. We have capital available and flexibility in our capital allocation strategy. Finally, the Board declared a 12.5 cent per share dividend for Q1 of 2025, representing a 9% dividend increase. This is the fifth consecutive year where we have increased our dividend. Starting on slide six, we'll provide updates on our business performance. On this slide, we break down our total AUM and fee-earning assets in the categories disclosed in our MD&A, and show comparisons to the prior year. Our mutual fund AUM was 31 billion, up 19% year over year, outpacing the industry increase of 15%. Our ETF and SMA AUM increased 74% year over year to $2.9 billion. I'll provide more color on our mutual fund business and ETFs and SMA AUM in a moment. Segregated accounts and sub-advisory AUM decreased by 9% compared to the prior year. As previously disclosed, The decline was driven mainly by a redemption fund of our institutional clients who shifted to passive management early in 2024. Our private wealth AUM increased by 10% compared to the prior year to $8.6 billion. And our AGF Capital Partners AUM and fee-earning assets were $4.6 billion at the end of the quarter, up $2.5 billion from the prior year due to the closing of the Kensington transaction. As a reminder, New Holland Capital AUM of $9 billion is not consolidated into AGF's total AUM and fee-earning assets at this time. Turning to slide 7, I'll provide some details on the fund business. Despite choppy equity markets and the expectation of further volatility ahead, the Canadian mutual fund industry experienced net positive sales in the quarter of $11 billion, or half of 1% of AUM. AGF's retail mutual fund business outpaced the industry and achieved 342 million of net sales in a quarter, or 1.1% of our AUM. This was driven by our gross sales, which increased 67% year-over-year compared to a 31% increase for the industry. AGF was able to capitalize on the return of net flows into equities, allowing us to grow at a faster rate than the industry. While our fixed income net flows also increased at a healthy rate. And now I want to give a quick update on our investment performance. AJF measures mutual fund performance by comparing gross returns before fees relative to peers within the same category, with the first percentile being the best possible performance. Our one-year performance improved to the 39th percentile, and our three-year performance was in the 44th percentile, and approximately two-thirds of our strategies are outperforming our peers on a three- and five-year basis. Turning now to slide eight. Slide eight shows our ETF and SMA AUM. The AUM in this category has grown 45% on a compounded basis over the last two years. Included in this number are Canadian and U.S. listed ETFs and SMA platforms globally. In the current volatile market environment, our liquid alternative products offer a hedge to the equity markets by providing protection during drawdowns while maintaining upside participation. For example, in the recent market downturn since mid-February, While the S&P 500 was down 12%, our U.S. listed market neutral anti-beta ETF produced positive returns of 20%. The AUM across the Canadian and U.S. ETF on this strategy reached almost $900 million. Further, we have seen consistent growth and momentum in the SMA business across the U.S., Canada, and Asia, where many of our strategies are available on leading SMA and wealth management platforms. I will now pass it over to Ken to discuss our financial results.