ETF Issuer: Bristol Gate Capital Partners Inc.

VaselineMay 19, 2024

0 3 minutes read

Bristol Gate Capital Partners Inc. is an independent, employee-owned investment manager that uses data science in combination with fundamental analysis to manage focused high dividend growth portfolios.

In this ETF Issuer article, we’ll look at Bristol Gate Capital Partners Inc.’s existing ETF offerings, highlighting their unique investment process and the benefits investors can get from their solutions.

History and Purpose of Bristol Gate Capital Partners Inc

Bristol Gate Capital Partners Inc. was founded in 2006 by Richard Hamm and Peter Simmie and is owned by the company’s senior management. The firm uses predictive machine learning in combination with fundamental analysis to identify high-quality companies that have the ability and desire to significantly increase their dividends in the coming year.

Bristol Gate Capital Partners currently manages $2.8 billion in assets under management/Asset under management as of January 2024 through a US equity strategy and a Canadian equity strategy, with ETFs tracking each strategy.

The company’s stated goal is to provide client portfolios with more revenue than they received in the previous year. To actualize this goal, the firm constructs portfolios by predicting the best dividend producers for the next 12 months. Over time, these portfolios will aim to outperform the market with less downside risk.

The investment process of Bristol Gate Capital Partners Inc

Bristol Gate Capital Partners Inc. uses a four-pillar process to construct portfolios of the highest estimated dividend producers. The process uses a combination of data science with fundamental analysis to help improve efficiency, return profiles and minimize human bias. Detailed below is what each pillar entails:

First pillar:

The initial step begins with the evaluation of the companies to be considered for the portfolio. Bristol Gate Capital Partners Inc.’s machine learning model. must predict that a company will be among the highest expected dividend producers in the next 12 months.

The second pillar:

The second step is to evaluate the business quality of the firms identified through a proprietary framework called Productive Capital Analysis™. Productive Capital Analysis is the trademarked fundamental analysis process followed by Bristol Gate. Assesses whether the model’s projected dividend growth is achievable and sustainable through a careful examination of a company’s source and use of cash.

Among other things, market structure, competitive dynamics, growth opportunities, pricing power, margins and the company’s history of successful capital allocation are evaluated. This rigorous analysis provides comfort about the risks being taken and whether the company can deliver the forecasted level of dividend growth.

The third pillar:

Bristol Gate Capital Partners Inc. aims to pay a reasonable price for quality and dividend growth, so the firm seeks to determine fair value for each company considered for portfolio inclusion.

The fourth pillar:

In the final stages of portfolio construction, correlation and principal component analysis together are used to assess whether the portfolio is properly diversified with an appropriate amount of risk exposure.

Bristol Gate Capital Partners Inc. ETF Offerings

Currently, Bristol Gate Capital Partners Inc.has two ETF offerings, each with a distinct geographic focus. The objective of each ETF is detailed below:

Bristol Gate Concentrated US Equity (Ticker: BGU/BGU.U) seeks to generate long-term income and capital growth by investing primarily in a concentrated portfolio of publicly traded equity securities of US dividend-paying companies. The ETF invests in dividend-paying equity securities selected primarily from the S&P500® Total Return Index, with the number of portfolio holdings typically ranging from 20 to 30 different securities.

The ETF typically invests in securities of companies in six or more industry sectors. Approximately once every three months, subject to market conditions and the Manager’s discretion as to specific timing, the Portfolio is rebalanced so that all securities in the Portfolio are approximately equally weighted at that time.

As of April 22, AUM for BGU was $253.55 million, while BGU.U was $107.51 million.

Bristol Gate Concentrated Canadian Equity ETF (Ticker: BGC) seeks to generate long-term income and capital growth by investing primarily in a concentrated portfolio of publicly traded equity securities of dividend-paying Canadian companies. The ETF invests in dividend-paying equity securities selected primarily from the S&P/TSX Composite Total Return Index, the number of portfolio holdings typically ranges from 20 to 30 different securities.

The ETF typically invests in securities of companies in six or more industry sectors. Approximately once every three months, subject to market conditions and the Manager’s discretion as to specific timing, the Portfolio is rebalanced so that all securities in the Portfolio are approximately equally weighted at that time.

As of April 22, AUM for BGC was $18.31 million.

Conclusion

For investors looking for equity income oriented solutions, Bristol Gate Capital Partners Inc offers. worth considering. Given the concentrated and unique structure of their portfolios, they can be complementary holdings in a balanced portfolio.

Furthermore, given the active nature of these mandates, investors benefit from ongoing tactical changes implemented by the manager, which result in either increased returns, reduced risk, or sometimes both.

Please note that this article is for informational purposes only and does not constitute investment advice in any way. It is essential that you seek the advice of a registered financial professional before making any investment decision.