Founders Fund

June 30, 2024

Fund Overview

• The Founders Fund is a balanced fund with a target asset mix of 60% stocks and 40% fixed income. It gains this exposure from investing in Steadyhand’s other funds.
  
• Tom Bradley (Steadyhand Chair and co-founder) manages the fund along with Chief Investment Officer Salman Ahmed. They have considerable scope to adjust the portfolio although without extremes in valuation and investor sentiment, their bias is to stay near the target mix.
  

Portfolio Specifics

• The fund finished the second quarter unchanged (+0.1%), after absorbing some market weakness in April. The best contributor was the Savings Fund while small-cap stocks gave back some of their first quarter gains.
  
• The portfolio’s asset mix was also largely unchanged from previous quarters. It mirrors the fund’s long-term target. Stocks are just slightly below the 60% level and the bond weighting, which has edged higher, is now close to a full allocation. Cash holdings in the underlying funds and Savings Fund were unchanged.
  
• We continue to be positive about the fixed income holdings, which come mostly through the Income Fund. Bonds provide Founders with above-inflation income and will be good diversifiers the next time we have a period of weak stock prices.
  
• We’re maintaining a meaningful position in the Savings Fund (6%) for similar reasons — income and downside protection. It doesn’t have the same return potential as the Income Fund but adds to Founders’ diversification. The Savings Fund tracks a steadier path than the Income Fund and when needed, is a ready source of liquidity.
  
• As a reminder, we don’t make big or sudden moves to the fund’s asset mix, but rather gradual, deliberate changes based on bond and stock valuations, market sentiment (a contrarian indicator of value), and our fund managers’ views of the economic and market fundamentals. It’s important to keep in mind, however, that while Founders’ asset mix is important, returns are primarily driven by the performance of the underlying funds. It’s through these 6 funds that Founders owns a mix of bonds and stocks across a wide range of industries, geographies, and currencies.
  
• The largest transactions in the underlying funds during the quarter included new holdings in Andlauer Healthcare Group (Canada), Greenbrier Companies (U.S.), Embraer (Brazil), and Ventia Services Group (Australia); and the sale of KDDI (Japan), Park Lawn (Canada), Vail Resorts (U.S.) and Integral Ad Science (U.S.).
  

Positioning

• The fund is not venturing far from its strategic asset mix (SAM). There are currently no extremes in the indicators we look at that would prompt us to deviate meaningfully.
  

Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Important information about the Steadyhand funds is contained in our Simplified Prospectus. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated.